So you’re thinking of starting a freight forwarding business in Canada? That’s great! As with any business, pre-planning is essential to your success. Part of that will likely involve writing a business plan to get funding and acting as a guidepost as you conduct your operations.
Within that business plan, you’ll need to outline many things, including the details of your operations and how you plan to start and grow your business.
In this guide, learn a few essential business planning decisions you’ll need to make and actions you need to take to start your freight forwarding business in Canada.
Decide your niche or speciality
While you can be a “generalist” freight forwarder in Canada, you’ll likely find increased success and a better ability to streamline operations and costs by specializing in specific types of freight. This helps you to make the right business connections and relationships to get the best deals from carriers and partners.
Here are some examples of freight types of categories you can choose to specialize in:
- Consumer goods
- Medical equipment and supplies (Pharmaceutical)
- Food and beverage (including perishable foods)
- Hazardous materials
It’s usually best to pick a specialty you have particular experience in already, through the logistics industry or by working directly in those industries in other roles. This will give you the insights to understand your target customers better.
Decide your freight company structure
Again, if you choose to specialize, here are a few types of freight forwarding companies you can become:
- Air Forwarding: Air shipments move goods with the fastest delivery times. Great for transporting small dimension cargo, high-value shipments, or perishable and other time-sensitive items. You could become a direct flight forwarder (you purchase scheduled, direct flights) or deferred flights (where your cargo may go through several planes, airports, and warehouse consolidation centers before it reaches its final destination.
- Sea freight forwarding: This is shipping via shipping containers on cargo ships. It’s a more economical option for larger, less time-sensitive shipments. As a freight forwarder, you can purchase shipping containers in three ways depending on your clients and needs:
- Full Container Load (FCL): Your full container is packed by the supplier
- Less than Container Load (LCL): You share a container with other forwarders or clients with different final destinations/recipients
- Full Consolidation: Shipments from multiple forwarders or customers are combined into one container to be sent to one final destination/recipient.
- Road Freight Forwarding: Freight forwarders ship the package via cargo trucks and are responsible for the transportation, route planning, tracking and delivery to the final destination.
- Rail Freight Forwarding: This method is a cost-effective alternative to shipping large bulky shipments over land.
- Multi-mode shipping: Sometimes, one form of freight forwarding doesn’t work, especially when global clients want to ship through or to Canada. This is when you may need support of multiple modes of transport, which as the freight forwarder, you must coordinate. To start this kind of freight forwarding business in Canada, you should know the industry and the entire supply chain well.
Get necessary business license and certifications
There are no specific licensing requirements to open a freight forwarding business in Canada, so the barrier to entry is low. If you’re new to the industry (or the industry in Canada), you can take courses through the Canadian International Freight Forwarders Association, including courses in:
- International Freight Forwarding
- Dangerous Goods
- Air Cargo Security
- Virtual Workshops on a variety of other topics.
All businesses in Canada are still required to register. The registrations and licenses you need will differ depending on your region, the type of business you’re running, and how many employees you have. These registrations may include:
- A local business license
- Incorporating your business (speak to a lawyer or accountant to see if this is beneficial for you)
- Employee programs and benefits
In Canada, you can get additional support for your business by joining the Canadian International Freight Forwarders Association (CIFFA). They provide member companies with support, advocacy and stature of their brand.
Understand required regulations
If shipping goods into, through, or outside of Canada, you may be bound by regulations set forth by the Canadian Border Services Agency (CBSA). These are regarding the importation and transportation of goods and the pre-arrival and reporting requirements for shipments.
You may also need to apply for a carrier code for freight forwarders. It is a four-character unique identifier code assigned by the CBSA to your legal business entity. You can learn more and apply for your code on the CBSA website.
- Air: within 4 hours of arrival
- Marine/Sea: within 24 hours of arrival
- Highway: within 1 hour of arrival
- Rail: within 2 hours of arrival
Network to grow your connections and partnerships
The best thing you can do to grow your business is to network with others in the freight forwarding and shipping industries and business owners in your target niches. To find local (general) business networking opportunities, talk to your local chamber of commerce or ask local employment and business resource associations for recommendations.
To network with others in the shipping and logistics industry, join a network especially made for businesses like you. RW Solutions business networks have over 1000+ independent freight forwarders from over 100 companies, including Canada. Members receive professional and business development opportunities, conferences (currently over ten annual conferences), and many networking opportunities to meet other potential business partners, acquaintances, and friends.