“Do you have a car or a small van? Do you like driving? Would you like to be your own boss. Would you like to earn £ 300 a day delivering small packages around the country. If yes, then why not become a self employed courier driver.”
You probably have seen these adds, promising fantastic way to earn vast income on a daily basis and you probably thinking now how to become a self employed courier driver.
So lets have a look how to get started in courier industry, what is required, how to set up and run your business, how the courier business works and how hard or easy it really is to be successful in courier industry working as a self employed courier owner driver.
How to Become a Self Employed Courier Driver
Parcels, packages and letters are constantly being delivered all over the UK. Most of these are being transported by couriers that ensure those items reach their destination. There are many courier companies that deliver items around the UK, as well as many self employed couriers also know as freelance couriers or courier owner drivers. As with any industry, people leave and new people join, so there is always demand for new courier owner drivers.
When it comes to courier work, distinctions must be made between same day delivery and next day delivery.
Next day deliveries are collected and then filed or grouped together for later delivery, usually the next day. Next day delivery is usually charged less than a same day delivery. Next day deliveries are best for large courier companies as they require a warehouse to hold the items and support staff to help group and sort the goods.
Same day deliveries are more urgent consignments where an item needs to be collected and then delivered on the same day. Same day deliveries carry a more premium rate. The majority of work for self employed courier drivers is from same day deliveries so that is what we will cover during this post. There are many businesses looking for local couriers to deliver urgent same day parcels. Same day delivery consignments may consist of a single item or they may consist of multiple items. Items requiring delivery may include letters, documents, parcels, sample products, computer components, machinery, machinery parts, printing materials, construction materials, and so much more. Bookings for same day deliveries are usually made on the day that the need to be delivered and often on short notice.
Type of Vehicle Required
Should You Use A Car, A Small Van Or A Large Van?
When first starting out, many self employed couriers use their own car. There are a number of things to consider though when choosing the right type of vehicle for your courier job. Your own car may be fine to start out with if you are delivering smaller items, however at some point you should consider purchasing a van. If you have a van for your deliveries you will look more professional and you will also be able to handle bigger jobs than you could with a Ford Fiesta for example.
If you decide to purchase a van you need to choose whether to buy a van outright, or whether to get a van on long term hire. You can lease a van, however most leasing companies will have a restricted mileage allowing of around 10k a year. As a busy courier you will most likely cover that 10k in a few months, so leasing may not be the best option. It may be worthwhile hiring a commercial vehicle for the first few months of your business, rather than purchase a vehicle right away. If you hire a vehicle then you can decide whether it is the right vehicle for your business before buying one. When you hire a commercial vehicle, the vehicle company will often include all maintenance work and may supply a replacement vehicle should your vehicle be off road at any time.
The next thing you need to consider is the size of van to start out with. The bigger the van, the more items you can fit in it and so you may be able to get bigger jobs and earn more money. However, big vans also have some disadvantages.
With a big van you can deliver much bigger and bulkier items that you would with a car or small van. You may even be able to take on some removal jobs with a big van and the bigger the job the more you will get paid. So if there is a lot of demand for bigger jobs in your area then it would definitely be worth considering getting a big van. You should study the local market to see what type of work, big or small, would be in more demand.
If you don’t know what type of deliveries you will get then it may be best to have a small to medium size van to start off with. A big van will cost more to run and maintain, while a smaller van will have lower running costs. It may turn out that you will have to turn down some bigger jobs, but if you aren’t sure that you will get bigger jobs then you will be saving yourself a lot of expenses by having a smaller van. If you get a big van and end up delivering few documents and envelopes, you will still charge the same amount as if you had a small van, but your expenses will be higher.
The other thing you need to consider with bigger van and bigger jobs is that there may be more physical work involved. If you are delivering bigger and heavier items you may also be required to move those items from your van to where they need to go. So you may need to carry large and heavy items from your van to the top floor of a alrge office building for example. Or you may need to cart 20 heavy kegs into a pub cellar for a brewery. When you are loading and unloading bigger items then your loading times will be longer as you may need to wait for a forklift in big distribution centres to become available or just loading heavy items by hand will take longer.
When talking about big vans then it is a van that is up to 3.5 tonnes Gross Vehicle Weight as vans up to 3.5 tonnes GVW can be driven with your normal car licence. Anything above 3.5 ton must have tachograph fitted and you also will have to comply with European Union driver’s hours regulations and will have different insurance requirements so that will already go under the light haulage business rather then courier business.
Hire And Reward Policy
As with any business, you will need insurance for your courier business to cover your vehicle and also the goods you delivering. Normal comprehensive or third party car insurance will not be enough; you will need specialised courier insurance – ‘Hire and Reward’ policy which will cost quite a bit more than your ‘normal’ insurance.
Goods In Transit Insurance
You must have a ‘Goods in Transit’ insurance that covers your customer’s parcels that you are carrying to a set value. You should have a minimum of £20,000 cover for Goods in Transit. It is not a legal requirement to have this insurance, however, if you do not have Goods in Transit insurance you will be liable for replacement of any items that are damaged or lost while in your care. No matter how careful you are at driving and securing your van, you can never guarantee and accident won’t happen that could damage items. Imagine if you have to break suddenly which causes 10 boxes of Luxury Cognac to fall and the bottles to break, Goods in Transit insurance would cover this type of breakage. Also, some clients or other courier companies may not hire you if you don’t have Goods in Transit insurance at the level mentioned above.
Public Liability Insurance
Public Liability insurance is another that you will need for your courier business. Once again, it isn’t a legal requirement to have public liability insurance, but it is highly recommended. Public liability insurance will cover you for accidents in which someone may get injured. If you have lifted a couple of boxes out of your van and have put one on the footpath while you get the next one, and someone trips over that box, then they may sue you for the cost of their injuries. Public liability insurance will cover you for injuries such as this one.
You should expect to pay anything around £3,000 per year for full comprehensive hire and reward policy and around £250 per year for Goods in Transit and Public Liability insurance. You can purchase the insurance together or separately and although Goods in Transit and Public Liability insurance are not legally required, you must at least have vehicle cover with Hire and Reward policy to legally operate your business. Not all insurance companies will offer courier insurance so you will have to look around at specialist insurance companies.
Now that we’ve covered the type of vehicle and insurance that you will need, let’s take a look at some other things you will need for your courier business.
Equipment Required For A Courier Business
Maps And Satellite Navigation
You will constantly be moving from one address to another so you will need a good map and/or satellite navigation to get around. Yes, many couriers still use maps, but many are now using satellite navigation systems but it is advisable to have both. Satellite navigation systems like TomTom or Garmin are convenient, easy to use and follow and can also assist in changing your route if your route has been blocked for any reason. Satellite navigation systems also have the advantage of being able to tell you the distance to your destination and how much time it will take to get there. They are also helpful for calculating distances between jobs to quote customers for new work.
Hands Free System
When working as a self employed courier you will need a good communication system as you will receive many calls from clients booking jobs. As you will spend a lot of your time driving, you need to be able to communicate while on the road. You may need to contact clients if you are running late or if there is a problem with the consignment. If you are sub-contracting for a courier company then you will need to communicate with them also. Good communication is essential to running a good delivery business and as it is illegal to use a mobile phone whilst driving anyway, therefore a good hands free system is a must.
You don’t want packages to be thrown around all over the back of your van so you will need some good ratchet straps to secure your loads. Securing items will reduce the chance of damage to goods and your van. Ratchet straps are great for securing items and allow you to secure your load fast.
High Visibility Vest
High visibility vest is also one of the must have items, yes it can be useful when changing a flat tyre on the road side but the main reason for have high visibility vest is that most big companies have big warehouses and regulations that do no allow anybody to their premises without wearing a high visibility vest. So you may be require to wear it to collect the items or when you drop parcel off at the destination.
Paperwork And Forms
POD – Proof Of Delivery
You will need to have proof of delivery documents (POD) to show that you have completed the consignment and delivered the goods. Your proof of delivery needs to include the job details, date and time, and the recipient’s name clearly printed and signed. You will need to show proof of delivery for some companies to pay you.
Some companies may require that you phone through the delivery details once you have made the deliver. You should give the customer a copy of the POD, along with an invoice, and keep a copy for yourself. Most office supply stores will stock POD booklets.
Terms And Conditions
You should have terms and conditions that lay out the terms under which you will deliver goods. Even though many companies won’t read the terms and conditions, it is important that you show them and have the company sign them to state that they agree to your terms and conditions. You can include your terms and conditions on the back of your proof of delivery dockets or you can have them separate. Have your customer sign the terms and conditions when you collect the consignment for delivery.
You can hire a lawyer to put together Terms and Conditions document for you but it is cheaper to search online and download generic terms and conditions for courier drivers for free and modify it according to your own needs.
Advertising Your Courier Business
The first thing you will need for a successful courier business is customers. It would be beneficial to run an ad in your local newspaper and also put an ad in your local business directory pages or you can even use Google AdWords to start your advertising campaign. You will find that many other courier companies in your area will also be advertising using these methods, so study their adverts, look at what they say and how they say it, and this can give you an idea of how to design your own ad.
Another recommended advertising method is to have some sign writing on your van. You can get a professional magnetic sign for around £50 and magnetic signs are a good idea, particularly if you are hiring a van. Make your sign eye catching but still professional. Again, searching online for ‘magnetic sign’ will give you many providers so look around for the best deals.
Handing out leaflets or business cards to local businesses can also bring you new customers and is a reasonably inexpensive advertising method. You can also phone some businesses a few days after delivering leaflets to ask if they may be interested in your courier service.
Having a website for your business is also a great way to gain new customers. A website will make your business look professional and is also a way for potential customers to locate you. Your website doesn’t have to be fancy, just a small website with your business details is all you need. Your website should outlay your business services and prices, terms and conditions and of course, your contact information. Add your website URL to your business cards, leaflets and letters or any ads that you are running.
You will want to target customers that are in your local area and set yourself a distance limit. If you are making same day deliveries then you will only have a short time to drive to your customers address to collect a consignment and deliver it the same day.
Working As A Courier Driver
Once you have your van, insurance cover, equipment and paperwork organized, you can start work as a self-employed courier driver. You can choose to work alone and find your own jobs using some of these advertising methods mentioned above or you can do sub-contract work for an established courier company. There are advantages and disadvantages to both options.
Working On Your Own
If you decide to work on your own you will need to do advertising in your local paper, drop leaflets to businesses around your local area and have a website promoting your business as mentioned already.
Working alone also means you have to juggle jobs a lot more. If you are delivering a package for one customer and someone else calls and needs a package delivered to the other end of town and need it done immediately, then you may need to turn that second job down. Customers are not likely to call you again if you turn them down jobs too often. You may need to negotiate somewhat to do the job once your current job is completed if your customer agrees to that, but there will be times when you will have to turn people down because you simply can’t be in two places at once.
If you get a call while on a current job, rather than turn them down you could write down the customer’s details and let them know you will call them back with a price and an estimated time of collection. Then contact another courier company or owner-driver and offer them the job. When another courier does a job for you they may do it at a trade rate which may be 10 to 30% cheaper than your own retail rate. You can call the company back with the price and estimated time (that you would have got from the courier doing the job) and if the customer accepts then you organize the courier to do the job for you. If you have another courier doing a job for you, you will need to request that they give you proof of delivery call when the job has been completed. The courier will send you an invoice and a printed POD and the customer will be happy and then they may use you again in future. You then retain that customer for future business rather than losing their business because you didn’t have time to take on that job. If you plan on using other couriers from time to time then you need to have it stated within your Terms and Conditions that you may use other courier companies if required.
Working As A Sub-Contractor
When working as a sub-contractor you basically work for another courier company. The company will call you when they have a job available for you to do. There are quite a lot of courier companies that employ couriers on a sub-contract basis.
Large courier companies have lots of established, ongoing clients and they have many sub-contract drivers to do the deliveries for them. To get a job as a sub-contract courier you can call courier companies direct and introduce yourself and let them know that you are available for work. You could also send an email or letter to companies introducing yourself and giving them your contact details. You can often find courier companies looking for self-employed drivers advertising online on sites like Gumtree.
You may find that some companies may offer you enough work to keep you going full-time, while others will call you now and again when they don’t have enough drivers available to cover the current workload. Some companies will ask you to come in for an interview and check your van before giving you work and they may also want to make sure that you have all the relevant insurance to work.
The disadvantage to working as a sub-contractor is that you will earn less per job than you would if you were working on your own. The courier company needs to make some profit from each job so their contractors will usually be paid around 60 to 70% of the job fee, while the company keeps the rest. The courier company is finding the work for the contractors and doing all the paperwork, so it is only reasonable that they earn some of the income from each job.
The advantage to working as a sub-contractor is that you don’t need to worry about constantly finding new customers or about the invoicing. Also, you do not have to wait for months for payment to come through from the customers as that is all handled by the courier company and you will get paid on regular basis, weekly or monthly as agreed with the courier company.
Quite often when making a delivery, you will return from the delivery with an empty van. When you are running empty you are not getting paid for that mileage, this is often referred to as ‘dead mileage’. When possible, try to combine jobs within the same areas so when you deliver one job, you can then pick up the next job and return to deliver that job, reducing your dead mileage.
There are other options for reducing dead mileage, such as using online services. There are services on the internet where couriers can post jobs or bid on jobs. Here you may find jobs that you can fit into your schedule to work around your current jobs. These online job sites work in a similar way to working as a sub-contractor, where you are picking up work on behalf of larger courier companies.
There are hundreds of members on these online sites and jobs are posted regularly. You will need to pay a membership subscription to one of these websites which is usually around £25 -£35 per month but you will make that money back in a day or two.
You do need to have a legitimate business to join these websites and may need to provide documentary evidence of your business, such as:
Vehicle insurance policies showing that you are covered for the purpose of your business
Goods in Transit policy
Public liability insurance policy
Operators License (if required)
Vat Certificate (if required)
Once you have registered with a website, you will receive text alerts when jobs become available that would suit your requirements. You can also post for return journeys by posting which area you are delivering to, and then you will receive text alerts for jobs that are available for pickup in that area.
You can also use these websites for posting jobs that you are unable to do because the job is too big or you just don’t have time to do it. You can post the job details for another courier to do the job for you. Courier Exchange, uShip and MTV are the most popular courier exchange websites.
What should you charge for your deliveries? The answer may depend on the distance you will travel for the job and the size of the vehicle you have. When starting out, it can be a good idea to call a few of your local courier companies to get quotes for a job or look at local courier websites for example delivery prices. Plan a route for the parcel to be picked up from and delivered to and get quotes from a few different companies and compare their pricing.
With those quotes, you can then divide the quote by the distance of the route and this will give you some idea of what other couriers are charging per loaded mile. Keep in mind that if you are sub-contracting then the rate will be a little lower as mentioned before than if you are working on your own. Your rate will also be a little lower if you are bidding for jobs on a return load websites. So the rate that you charge per mile may vary a little depending on the job in question, but generally for a small van you would charge between £1- £1.5 per loaded mile and between £1.5 – £2 per loaded mile for a large van.
There are some other conditions that you should agree on before completing any jobs, such as:
Any additional costs for drops en-route
A minimum charge per job
Waiting time – allow the first 10 to 15 minutes free and then charge in slots of 15 minutes or so thereafter
Additional costs such as parking, congestion charge, tolls or ferries. You need to learn where you will incur such charges and advice the customer up front
To receive payment for jobs as soon as possible you will want to send out your invoice as soon after the completion of the job as you can. You should also attach your Proof of Delivery with the invoice. If you send invoices out three weeks after the job then don’t expect to get paid immediately.
Don’t collect a consignment for delivery until you have agreed on payment terms for the job. Generally, you would and you should get paid on a 30-day basis, which means that a customer will pay you at the end of the month following your invoice date. So if your invoice is dating 16th May then payment would be made by the 30th June. Always check what the payment terms and methods are before taking on a job.
If you do a lot of continuing work for a company you will get to know their payment terms and won’t need to agree for each job. If you are doing new jobs or one-off jobs for small businesses or private individuals, then you may want to ask for payment by cheque or cash on the day. You should have a receipt book that you can get from any office supply shop or print some receipts so you can give the customer a receipt for payment on the day.
When you take on a job with a new customer you can offer them an account with your courier company for future jobs. Many customers will use your service again if they have an account with you.
It is very important to let HMRC know that you are now self-employed courier driver. You must tell HMRC as soon as you start working for yourself. If you do nor registering on time, you may have to pay a penalty. When you are self-employed you need to be responsible for your own taxes. You will do a self-assessment tax return, national insurance contributions and when you start earning a lot of money you may need to register for VAT. Newly Self-Employed Helpline
Courier Industry Talk
If you are going to work as a self-employed courier then you will need to learn the courier jargon. Here are some terms you may come across:
Dead Mileage: the distance you may travel without a load and unpaid
ETA: estimated time of arrival
ETC: estimated time of collection
Backload: often used on return load networks. The term describes a GTM job with flexible times, quite often overnight delivery
Hotshot: often used on return load networks. The term describes a GTM job that is urgent and needs collected and delivered within a specific time
Multi-drop: multiple deliveries within a small area
POD: proof of delivery
PLM: per loaded mile. The amount charged per mile of carrying a consignment
Owner Driver: term used to describe a sole trader or self-employed courier
Return Journey: the journey returning from the delivery point back to your base, and often empty loaded journey.
Are you interested in becoming a freelance courier driver or do you already work in the courier industry, please post your questions, comments, tips and advice below. You can also visit our career forum where you can find many courier work-related discussions under the Driving And Transport Category.