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Your Guide to Starting a Delivery Business with Contract Drivers

How to start a delivery business with contract drivers written on blue background

Starting a delivery business with contract drivers can be a daunting task, primarily because of the competition you’re up against.

According to a report by IBISWorld, as of 2022, there are 256,633 couriers and local delivery businesses in the US. That’s a 5.1% increase from 2021. So it can be challenging to break into the industry.

Plus, you have to manage many things simultaneously without fail. And you have to make deliveries on time, every time.

Learning how to start your own delivery business can seem overwhelming, so we put together all the nitty-gritty details you need to know in this article.

It includes identifying your niche, setting up your back-end process, hiring and training your drivers, and more! Below is a quick outline of what you would learn in this article.

Identify Your Niche to Start a Deliver Business with Contract Drivers

The first step to starting a delivery business is to identify the niche you will be focusing on. When you figure out your role in the delivery industry, you can determine the demands for drivers. Additionally, you can figure out the costs involved, such as:

  • How much it will cost to hire contract drives
  • Costs of supplies you’ll need to deliver items
  • Insurance fees
  • Fuel costs

When you know your niche, you can draft a delivery service business plan that will help you find a gap in the market that you could potentially fill.

The benefit of starting a new delivery service business is that you can offer personalized delivery to customers. What’s more, you can find out what your competitors are lacking in their services so you can offer a better customer experience.

Examples of Delivery Business with Contract Drivers

There are already a wide variety of delivery companies in the industry. However, there are unconventional services you can offer your clients. Here are examples of how you can provide different services that other delivery companies don’t usually offer.

Unique Courier Services

You can start an affordable courier service using contract drivers in selected zip code areas. You can develop a unique service to deliver items that are highly valuable, such as:

  • Gold or silver coins
  • Jewelry
  • Diamonds
  • Expensive electronics
  • Pricey perfumes

Pre-Made Meal Delivery

Companies that make pre-made meals for residents in the area will need reliable services to deliver their meals on time. You may offer specialized packaging to either keep food frozen or warm. Companies may also need assistance in delivering pre-made meals to schools or homeless shelters.

All Hour Food Delivery Business

You can partner with thousands of local restaurants to deliver meals to customers round the clock. You can offer competitive delivery prices to stay ahead of significant delivery services like DoorDash or UberEats.

Liquor Delivery

Offer liquor delivery for events. Partner with breweries or liquor stores and handle all their delivery tasks. You can deliver crates of alcohol for events or one or two liquor bottles to residents for personal use.

Grocery Delivery

Customers don’t always have the time to rush to the shops and buy groceries. So they’ll order their items online. You can rope in local grocery stores to deliver groceries to residents in the area.

Medicine Delivery

There may be locals who are too ill to travel to a pharmacy to collect medicine. Or they may not have transport or time to travel to a pharmacy. You can start a delivery business that focuses on delivering prescription drugs to make it easier for people to receive their medicine.

Learn how to start a medical courier service.

Delivery Services After Business Hours

You could also start offering deliveries after work hours. Residents that work from home find it distracting to receive goods during the day, so they prefer night-time deliveries. What’s more, you can offer convenient services to locals who need emergency items after delivery hours.

After hour delivery services work well for:

  • Food delivery
  • Medicine delivery
  • Liquor delivery

What’s more, you can also attract contract drivers using their own vehicles for after-hour deliveries. Some drivers prefer working at night because it gives them a chance to earn extra money if they have day jobs.

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Create a Back end Process to Start a Delivery Business with Contract Drivers

Once you figure out the type of delivery business with contract drivers you’ll start, the next step you should consider is how you’ll receive orders.

The way you process orders will depend on your niche. For example, managing orders for a restaurant will be different from managing orders for a courier service.

The convenience and design of the back-end process will rely on whether your company manufactures and delivers products or you have your contractors picking up items from a warehouse.

On the other hand, if you’re working with major organizations to deliver their goods, you may need to sync with their processes to manage orders from their customers. But if you’re working independently, you can use tools such as QuickBooks or even a basic Excel spreadsheet.

Here are the top seven apps for delivery drivers.

Hire and Provide Comprehensive Training to the Contract Drivers

Now it’s time to hire quality drivers so you can start accepting orders. By quality drivers, we mean candidates with experience in the industry and no criminal records. Here’s a step-by-step process for hiring and training contract drivers.

Hiring Contract Drivers

Post your requirements on job sites such as Indeed to attract the type of contractor you want. You should include the following in the job description:

  • Whether you want contract drivers using their own vehicle
  • If you’re looking for drivers with a commercial driver’s license
  • How long the contract is valid for
  • Number of hours you require them to work
  • The expected wage you’re willing to pay

You’ll most likely receive many applications. Determine how many contract drivers you’ll need to run your business, and then choose the applicants that best suit your requirements. You can then interview shortlisted candidates to see if they’re the right fit.

Here is a detailed guide to hiring delivery drivers.

Training Your Contract Drivers

You may get highly experienced candidates, but you still need to provide them with extensive training, so they know exactly what your organization’s processes are. Here is what you should include in your training program.

Customer Care

The customer care process for your delivery business with contract drivers should be different compared to other organizations. You want to provide your customers with an excellent experience. Train your contract drivers on how to communicate with customers. It includes:

  • Communicating with customers if drivers are running late
  • Ability to answer questions from customers
  • Techniques to be presentable and polite when delivering packages

Software

You may have drivers that don’t know how to use your specific software or delivery tools. Organize a workshop that teaches your drivers how to operate the tools. Also, train your drivers immediately whenever a new tool or software is introduced.

Safety

Make it known that your contractors’ lives are more important than the packages. They must never put themselves in any position where they could be harmed. Your drivers must take regular breaks and should not engage in reckless driving.

Here are four delivery driver training tips to improve their skills and performance.

Use a Route Planner to Make Your Contract Drivers Efficient

Hiring and training aren’t enough. You must also ensure they can efficiently do the job, and a route planner can help here.

A multi-stop route planner helps plan well-optimized routes with accurate turn-by-turn directions within a minute. The software considers weather, traffic, avoidance zones, roadblocks, left turns, and many constraints that could delay the deliveries.

Plus, a map route planner comes with a GPS tracking feature that helps monitor vehicles on the road in real-time on a map in the software. Therefore, if a driver engages in aggressive driving, deviates from the route, or gets stuck on the road due to a sudden breakdown, you would know immediately and take necessary actions promptly.

The best route planners like Route4Me route planner come with many other powerful features, too, such as:

  • Customer alerting and notifications feature that helps you inform your customers through email or SMS  as soon as their order is out for delivery or near to their location.

  • A customer portal that enables your customers to monitor their package status independently.
  • eSignature to allow drivers to collect customer signatures on their mobile devices as a proof of delivery instead of using paper logs
  • Reporting and analytics to track driver performance, fuel consumption, and more
  • Driver breaks to insert adjustable stops into the already planned routes to ensure drivers get sufficient breaks during the journey

All these and many other features translate into the following benefits:

  • Reduced costs per delivery
  • Improved profitability
  • Reduced planning times
  • Drivers can cover more stops
  • Minimized customer service calls
  • Reduced driver fatigue

Here are six reasons why you need delivery management software.

Conclusion: Starting a Delivery Business with Contract Drivers

To be successful in the delivery industry, you must use the right tools, training, and hiring methods and fill in any gaps in the market. Use this guide as a checklist to start a delivery business with contract drivers. Do not forget to use a route planner to make your delivery operations efficient and keep your customers happy.

Route4Me

Want To See For Yourself How Route4Me Can Boost Your Profits?

Whether you want to slash the time it takes you to plan routes for your drivers, increase the number of stops they can make, or keep your customers satisfied knowing that your drivers show up on time… Route4Me helps you achieve that!

Start Free 7 Day Trial

Route4Me

About Route4Me

Route4Me has over 35,000 customers globally. Route4Me's Android and iPhone mobile apps have been downloaded over 2 million times since 2009. Extremely easy-to-use, Route4Me's apps create optimized routes, synchronize routes to mobile devices, enable communication with drivers and customers, offer turn-by-turn directions, delivery confirmation, and more. Behind the scenes, Route4Me's operational optimization platform combines high-performance algorithms with data science, machine learning, and big data to plan, optimize, and analyze routes of almost any size in real-time.