Cost of Starting Transportation Business in Nigeria

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Introduction to Transportation Business in Nigeria

There was a time when traveling to the Eastern Nigeria used to be a journey to
remember. Those days of Brand New, high speeding Marcopolo Luxury Buses!
Sitting in those buses while cruising the Ore-Benin Road used to be like a
dream come true to many travelers, it used to be almost the same thing as
taking a flight. The sheer beauty, the comfort and luxury is considered as
second to none.



In those days, traveling with luxurious buses was like Christmas – you’d have
so much fun traveling that you wish to travel again and again. Whenever the
coach made a stopover at filling stations, you see well-dressed passengers
coming out of the buses crunching bottles of Eva water, looking as if they just
alighted from Emirates A360 jetliner.

With the pleasure and comfort it offers, you don’t care how much you pay. Everyone else
in every other parts of the country had no choice but to either respect the Igbo travelers or envy them because of their mode of transportation and the plenty ‘Swagger’ it carries. Gradually, the buses began to die off and what used to be “The Pride of the East” now turn to “The Disgrace of the East”.

What Really Happened to Those Beautiful Buses?


Is it that the transport business is no longer profitable? Some, especially the
operators would want to blame it on bad roads and high cost of fuel and diesel.
They would want you to believe that the cost of running the business far
outweigh the profit. That the buses costs a lot of money to acquire. These are
valid reasons, but in business sense, no reason is valid enough to get a viable
business grounded.


 

Granted, the Marcopolo bus cost about N80-90 Million which is quite a lot of money to buy a bus considering the condition of Nigerian roads. Prices of some classes and chassis of Marcopolo even go as high as a hundred and twenty million. Prices of the bus and the general road condition may probably be one of the reasons for its dead but the truth is that the transport business is still very profitable, far more profitable than the average businesses in Nigeria. So, I don’t believe that the price is what killed the fleets.

What killed those luxury buses is the same thing that kills everything in Nigeria – bad managements, poor maintenance culture, and greed. At a point in time, these transporters began to exploit their passengers. Instead of rendering consistent, good and quality services that guarantees sustained patronage, they resorted to taking advantage of their passengers.

First, they would adjust the seats and add extra line of seats, making it
highly uncomfortable for the average legs let alone the tall ones. They would
have you pay for a comfort ride only to over load the coach with traders consignment of goods just to make more and more money while their passengers are left to suffer for it without qualm nor care about the complains.

Traveling with the Marcopolo buses becomes sources of disappointment and regrets. You take the bus only if you wants to sleep on the road or get to your destination too late at dead night. Breaking down on the roads became their major identity. Some even catch fire on the road or loose control and fall into the rivers and ditches because of very poor maintenance.

They starts discriminating against their own people – brand new buses will be
put to Abuja while the old rickety ones goes to the East.

Steadily, passengers starts deserting the once loved luxury buses, preferring the smaller better maintained Toyota 14 seater buses. And the small buses simply took over and doesn’t seem ready to give up the lead anytime soon. It’s convenient, fast, and offers better customer services in some cases.

Who Have Excelled in Marcopolo Transportation Business?


Transport business is still one of the most consistent business in Nigeria anytime. If
you really want to make money in bulk and make it fast, one sector you must seriously consider investing into is transport sector. If well managed, this business has what it takes to make anyone a millionaire starting from almost nothing.

 

Some have been able to make it big in this business. Though, most of them are politicians who have access to government funds. Nevertheless, following their footsteps in transport business management certainly will help you excel in the business.

ABC Transport -Probably the only transport company in Nigeria that have
gone public. ABC Transport PLC has taken transport management to the next level
and is widely regarded as the best transport company in Nigeria, raking millions of naira on daily bases from their operation throughout Nigeria and West Africa.

ABC Transport is said to provide friendly and reliable services to the Eastern,
Western, and Northern parts of Nigeria, as well as to the West African sub-region, from Lagos (Nigeria) to Accra (Ghana) through Benin Republic, and Togo. Though, many people may not quite agree with that but judging by the standard of other transport companies, we can say that ABC really standout.

CHISCO Transport – This is one transport company that has maintained some level of sanity is a sector that is marred with low reputation and miscreants. They ensure that touts are kept away from their parks and their vehicles are well maintained. CHISCO has been in business for years and is reputed to be one of the biggest transport companies in Africa, making millions of naira daily.

According to one of the customer’s review – “Traveling with Chisco is not just traveling but traveling in comfort. The vehicles are always serviced before leaving the park, the drivers are always cautious. But their vehicle is slow and their park looks so unkept.”

G. Agofure Motors – I traveled to Warri Delta state through public transport sometimes ago. The bus I entered belongs to G.U.O Agofure Motor. At their head office in Warri, I notice how profitable a transport business could be if properly managed. The bus station there is the best I have ever seen anywhere in Nigeria. Well-arranged passengers departure hall equipped with large screen TVs with DSTV for all round customers entertainment.

So comfortable that some passengers who want to travel very early used to move in
and sleep there.

Everything is done in order and according to plan and the result is influx of customers. It is probably the busiest transport station anywhere in Nigeria despite that they charges higher than other buses. Good management is no doubt the lifeblood of any business and that is demonstrated with the Agofure motors.

You can see that transportation business in Nigeria is viable and cannot be saturated no matter the number of vehicle on the road. There will always be huge demand for means of movement in every city and villages in the country.

The only thing that is capable of taking you out of business sooner than you
started is lack of proper management. G. Agofure Motors is believed to make
about N10 Million naira daily.

Why Transportation Business is Profitable and Hot in Demand

 

  • There Is a Market for You-: As I mentioned above, there has always been need for transportation of passengers and goods from one place to another. This shows that there is market for your transport business; so it is not a new business niche you are to open.
  • It Is Easier To Break Even In the Transport Industry: As I mentioned above, there is a ready market for your services in the transport market. Also, it is easier to enter the market and break even.
    As much as there is competition in the market, there is enough demand to allow you break even in a short while.
  • Few Risks-: There is this general assumption people have that the transport business is risky because of accidents, deaths and all that. The truth is that there are very few risks involved in the transport business and as long as you take an insurance that covers every party in the occurrence of an accident, then your business is covered.

#Starting the Transportation Business with Commercial buses

1 human transport business Africa_6

Like you’ve seen clearly, the transportation business is a very lucrative business. In terms of volume, commercial buses move more people around in Africa every year than any other means of transport. Without doubt, they are the most basic and normal form of mass transportation on the continent and move people and goods within a city (intra city transport) and between cities (inter city transport).

Furthermore, in the absence of rail-ray transport system or networks on the continent capable of offering quality and consistent services worth recommendable, buses have taken over the role of moving people and edible/non edible goods over long distances.

Commercial buses are the only option for Africans who travel long distances but afford to travel by air. This makes them a very lucrative venture in Africa’s present and future.

Practically, most commercial buses on the continent are operated by self-employed drivers. These buses operate within the cities or embark on long haul trips between several cities, towns and villages.

However, based on research and experience there  are also private companies that own bus fleets dedicated to transporting people and goods between urban and rural areas.

The initial capital required to start up a bus service business is normally higher than any of the other options explored above.

Statistically, starting a transport business with commercial buses demands a lot of cash. Starting can be worrisome when the expected cash is not available, but it is not  impossible. With regards to the brand and condition of the bus (new or second hand), a suitable bus for this  transport business can cost between 4.5m and 15m.

#Tricycle (Auto Rickshaw or Tuk Tuk) Taxis

Image result for keke business in nigeria

Known by several names in Africa, the tricycle (Auto Rickshaw or Tuk Tuk) has grown to become the giant in Africa transportation system. Its  popularity across Africa (especially with the poor and lower middle class) is second to none .

Its many names on the continent include: Tuk-tuk (Eastern Africa – Kenya, Ethiopia, Tanzania), Pousse-pousse (Madagascar), Keke (Nigeria) and Raksha (Sudan).

Tricycles have become a neater and less accident-prone alternative to motorcycles which have been banned from major roads in big cities like Lagos (Nigeria).

Similar to  motorcycles, tricycles are preferred by people who want to travel short distances within cities and towns.  However, they can carry up to 4 – 5 passengers during one single trip depending on the condition of the Keke or trycle, tricycles are also flexible, cheap for commuters and can navigate narrow and congested parts of town.

Practically, a typical (4-seater) brand new tricycle can cost anything between 450,000 – 950,000 depending on the brand and country of purchase.

More so,tricycles are simple and easy  to operate and anyone who can ride a motorbike can easily ride a tuk-tuk. Depending on the location and volume of demand, tricycles can earn up to $50 in a single day.

Mostly compared to motorcycle taxis, interested  entrepreneurs can purchase tricycles and give them out to riders who pay a daily rent for using them or on a condition of hire purchase where the rider pays twice the purchase value over a given period of 1 or 2 years.

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