ENTREPRENEURSHIP SERIES (XIII): ENCORE HAULAGE BUSINESS

“Update the thread now! How much will the one in your post cost?”
– Okereke Ukachi on Nairaland in response to ENTREPRENEURSHIP SERIES (XII): HAULAGE BUSINESS | madukovich’s cogitations https://madukovich.wordpress.com/2016/01/04/entrepreneurship-series-xii-haulage-business/

The “One in your post” he was referring to is the picture of the haulage van I put up in my earlier post on the Haulage Business. This therefore is the update he seeks on that picture as regards an important step you need to take in birthing your Haulage Business, in Nigeria’s Road Transport Sector, once you have the conviction within you, based on information available that it is a business path worth careering and investing in.

Since Okereke raised the issue of a haulage van, I will limit myself for now to just that, to discuss the options available in procuring one and how the Hire Purchase option also works therein. I had stated earlier, that one could procure a new van but for the niche I cover, and in the case of a starter testing the waters, a fairly used van isn’t a bad option. In this category therefore, there are two options, one of getting a fairly used vehicle used in Nigeria for a while but still in motorable condition, or a fairly used van just imported from Europe, the United States or Asia.

The imported haulage vans are usually more expensive than the Nigerian used ones, though more often than not, you may have to spend more in putting the Nigerian used back into shape. This is not to say that you won’t also need to repair the imported ones, in fact if you have to factor in the changes you will have to make on the imported one before you put them onto Nigerian roads, considering the capital you have to play around with, you might just settle for the Nigerian used type, where all of the cost involved in turning it around pales to the cost of acquiring a “Tokunbo” (imported vehicles, in the local parlance), and turning same around to make them motorable for Nigeria roads and conditions.

Let me just raise an instance of what you may find with buying a “Tokunbo” haulage van. Most of them have electric engines controlled from the brain box of the van. Now, if there is an electrical problem, the van simply shuts down and though you can find mechanics with scanners to restore the van to function, it will be difficult to find mechanics with scanners everywhere in a place like Nigeria, especially when the van is for haulage nationwide and it can breakdown just about anywhere in Nigeria. Hence, once you have procured your “Tokunbo” haulage van, most mechanics will advice you to change to the manual and the cost of doing that, including of changing the electric fuel pump to the manual amongst others, will contribute to pushing the cost of acquiring such over the top, that you may begin to wonder whether you shouldn’t have bought a new van here in Nigeria in the first place (there are many times however, when one can be fortunate to get a Tokunbo haulage van that requires little to no touching up). Also, some of the Nigerian used vans may also have been used as factory fitted in the electrical mode, and it becomes pertinent that you change all to manual, as many a mechanic you will find will also advice you to do, especially for the reason I have afore stated, but the deal is that added cost will still be less than buying the imported vans and their associated cost, but that isn’t to say that you cannot buy that or even a new one, when your haulage business begins to stand on firmer ground.

OLD ENGINE REMOVED AND REPLACED WITH ANOTHER.
OLD ENGINE REMOVED AND REPLACED WITH ANOTHER.

Currently, an imported haulage van of medium size and capacity costs between =N=900,000 and =N=1,000,000 to buy. In fact during a survey a few days back, of Ladipo Auto Market in Lagos, as well as along the road leading to Badagry (also in Lagos), where many of these Haulage Vans (and trucks) are packed for sale, it was found that the prices rose steeply to about =N=1.3 million, even as buyers were busy carting away the lot of them meant for cities such as Port Harcourt and Onitsha. That cost is devoid of the cost of effecting changes and repairs where needed in the vehicle.

OLD ENGINE FROM THE HAULAGE VAN, THAT MAY SERVE AS NIDUS FOR SPARE PARTS IN FUTURE OR CAN BE SOLD IN SCRAPS
OLD ENGINE FROM THE HAULAGE VAN, THAT MAY SERVE AS NIDUS FOR SPARE PARTS IN FUTURE OR CAN BE SOLD IN SCRAPS

You may however find a good haulage van of medium size and capacity, with a good body, most likely without the engine, which you may have to change for as little as =N=585,400, with the break down as follows:

ITEM =N=
Haulage Van 420, 000
Engine 130, 000
Pedal 2, 000
Springs 15, 000
Engine Oil & Filter 5, 400
Hand Pump Filter 3, 500
Gear oil 2, 500
Transport Fare 7, 000

TOTAL: =N=585, 400

NEW IGNITION AND KEY FOR REFURBISHED HAULAGE VAN
NEW IGNITION AND KEY FOR REFURBISHED HAULAGE VAN

Besides the amount quoted above, what you may need to replace in the vehicle, as well as repairs of a mechanical and electrical type, may include some, all or even more of the underlisted sundry expenses with their cost implications clearly stated, as follows:

ITEM =N=
Brake Pads 5, 500
Brake Pipes 3, 000
Brake Lining 2, 000
Brake Calipers 2, 500
2 Cans Of Brake Oil 900
Reconstruction & Fixing 2, 300
Of Exhaust Pipe
100 Amps Battery 17, 000
10 Ton Pumping Jack 3, 500
24′ Socket 500
Wheel Spanner 1, 000
C Caution Sign 1, 000
4 Tyres 38, 000
Fire Extinguisher 1, 700
Rewiring 7, 000
Throttle Cable & Housing 2, 000
2 Head Lamp Socket 600
Ignition 5, 500
4 16′ Bolts & Nuts 400
Fuel Pipe 450
Radiator Pipe Clips 200
Fuel Pipe Clips 100
White Gum 150
Mechanics’ “Workmanship” 30, 000
Cutting Of Two Door Keys 1, 400

TOTAL: =N= 126, 700

HAULAGE VAN, GOOD TO GO
HAULAGE VAN, GOOD TO GO

Such that by the end of the day you would have spent roughly =N=712, 000 (still less than the cost of just procuring a “Tokunbo” without the necessary works and repairs), which is besides the cost of putting the haulage van’s papers and licences in order. I will address that in the next, and hopefully final instalment of this foray into the nitty-gritty of starting Haulage Business, as well as the conditions under which it will run on higher purchase, so you can still keep your nine to five while running this by the side. Mazel to the “Tov” y’all!

‘kovich

NB: The Naira exchanges to the Dollar officially at =N=199 to $1.

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