Starting your trucking business from the ground up can be quite a challenge. We at GoBear Philippines realize that you will need all the help you can get, so we’re giving you a rundown of the basics.
We sat down with Marvin Gaerlan, General Manager of EUG Freight Services, to learn more about the inner workings of the trucking industry and how personal loans helped his business grow to what it is today.
EUG Freight Services was established in 1989 by Marvin’s father, with Marvin taking over as General Manager of the company in 2007. As a trucking and hauling company, its main business is moving both raw materials and end products. The company has also worked with a wide range of clients from the food and beverage industry, including Coca-Cola, Zesto, and San Miguel.
“When my father started the company, he bought one truck. Then, pinasok niya sa Coke,” Marvin adds. “Business was good back then, walang truck ban. After four years, one [truck] became seven. Now we have 43. Basically, that’s a small trucking company, relatively.”
He is thankful that his dad got a loan early in the business. He considers this a good move on his part. Then there’s also the network of contacts that their family has built prior to developing the business.
So, while he acknowledges the use of personal loans to get a trucking business in place, he advises trucking entrepreneurs to consider how much money they have to borrow from financial institutions and banks. In the case of EUG Freight Services, they initially had to raise 6 million pesos.
This amount could be just enough to buy an actual truck, together with a working office and a small amount of manpower. Currently, Japanese-branded trucks cost around 4 million, while Chinese-manufactured trucks are around 3 million, excluding trailers. “Trailers, around 700,000. So, kung truck at trailer, China, 4 or 5 million pesos,” adds Marvin.
Better Than Franchising
We compared a trucking business with a generic franchising business that demands as much as 4 million pesos as a franchise fee for a fully operational store. Marvin made good comparisons between his freight business and a convenience store. The ROI (return on investment) for a store will depend on its location; in the trucking business, the ROI could take around three years maximum. That, of course, will depend on how often your truck works for you. Three years is the average time if your truck can do one trip a day for six days a week.
Another factor to consider when starting a trucking business is how much load a truck can carry in a single trip. You stand to earn more if your truck can carry bigger, heavier loads. According to Marvin, the rate for a single trip of a fully loaded container truck ranges from PHP 9,000 to PHP 12,500. If you have a small truck, the average rate is PHP 5,000 to PHP 6,000. This means that the more trips you make per day, the more you will earn.
The difference in rates for places within and outside Metro Manila should also be considered. The rate for fully loaded container trucks operating in Manila can be pegged at PHP 9,000 to PHP 12,000, while a trip outside Manila can cost up to PHP 23,000.
If you want to get started with your own trucking or logistics business, it would be a big step forward if you start comparing rates for personal loans from different banks as early as now. Fortunately, Gobear.com/ph/personal-loan lets you compare monthly rates and loan amounts from every major bank in the country. Try it out today!
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