How to Get Independent Courier Contracts? + Contract Value

Updated on June 25, 2024 by Alisa Cvilij

independent courier contracts

If you’re thinking of joining the courier industry, it’s the best time to do so.

Why’s that? Recently, a report was disclosed that predicted the market trend of last-mile delivery. It is predicted that by 2033, this sector will be worth $402 billion

This stage of delivery often costs the most. That's why it's crucial to focus on it if you're interested in securing independent courier contracts.

Nowadays, most people prefer shopping online. This trend was set during the pandemic when people were stuck at home. But even now, people prefer receiving items on their doorstep. This shows how important courier service companies have become.

So, if you’re looking to build a courier company and get independent courier contracts, keep reading. 

Table of content

  1. Who is the independent courier
  2. How do independent couriers work?
  3. How to get independent courier contracts?
  4. Calculating the value of the independent courier contract
  5. How to manage courier operations?

Who is the independent courier?

An independent courier runs their own delivery business. They carry packages, documents, and other items for clients. Unlike employees of big courier companies, they work on their own. They usually operate as freelancers or contractors. 

They use their own transportation, such as cars, bikes, or vans. This setup lets them choose their work hours and the jobs they want. This independence makes it a popular choice for people who want to work on their terms in the delivery industry.

who is independent courier

How do independent couriers work?

Independent couriers manage their own delivery services on a freelance or contract basis. They typically handle the entire process from accepting delivery jobs, either directly from clients or through platforms that connect couriers with delivery opportunities, to transporting and delivering packages. 

Independent couriers manage their own schedules and routes. They usually provide their own transportation, such as vehicles or bikes. They have the flexibility to select which jobs they take, which lets them control their workload and earnings based on their preferences.

How to get independent courier contracts?

Getting independent courier contracts involves a combination of understanding market needs, leveraging technology, and ensuring operational efficiency and security. Here’s a detailed guide on how to secure these contracts:

how to get independent courier contracts

Understand Your Market and Services

First things first. You need to clearly understand what you’re offering and what your potential clients really need. For this purpose, you should research the local market and find out which businesses need regular deliveries. These could be retail stores, pharmacies, law offices, and medical facilities. 

Now, you need to see which delivery type is most in demand. This could be same-day delivery, overnight shipping, or even specialized services.

  • Market Research Tips

Reach out to potential clients using surveys or interviews to understand their delivery needs and the challenges they face. Analyze your competitors to identify any services they lack. Read industry magazines and join online forums in your industry to stay informed of what’s in trend. 

Tender Bids and Proposals

If you want to win large contracts, you need to participate in the tender process. This is where many businesses submit their bids whenever a company is in need of couriers. If you really want to succeed in this competitive environment, your proposal should clearly outline your service capabilities, pricing, and the added value you bring. You can add faster delivery times or superior customer service to win the tender.

  • Crafting a Winning Proposal

Talk about how reliable you are and how you always deliver on time. Make sure your prices are good, but also cover your costs and let you make some profit. Show off reviews or stories from people you've worked with to prove you're trustworthy and experienced.

Leverage Technology for Enhanced Service Delivery

In the courier industry, technology can significantly enhance operational efficiency and customer satisfaction. You should definitely invest in route optimization software and real-time tracking systems like Track-POD to give yourself a competitive edge. 

These technologies assist in creating the most efficient delivery routes, which helps reduce fuel costs and ensure timely deliveries. Additionally, features such as electronic proof of delivery (ePOD) offer a secure method to confirm deliveries, providing a verifiable way to ensure delivery accuracy.

  • Technology Integration

Use GPS tracking so your clients can see where their delivery is in real-time. Use tools that help you find the quickest routes to save time and money. Give your clients electronic proof when their package is delivered to show them you're reliable and build trust.

independent courier software

Highlight Data Security

Keeping data safe is very important for businesses, especially when they handle important information. When you talk to potential clients, make sure to tell them how your technology keeps their data secure.

You should highlight how committed you are to protecting their sensitive data. To win the spotlight, you need to use encrypted communication and ensure compliance with data protection laws like GDPR. Tools like Track-POD can help you do both. You can also use this as your unique selling point. 

  • Data Security Measures

Use secure communication methods to keep data safe during delivery. Store data according to local privacy laws. Keep updating your security measures to protect against new dangers.

Network and Build Relationships

You must have a strong professional network. It will help you gain access to potential contracts. Always be proactive and attend industry conferences, participate in local business events, and engage with relevant online communities. By doing so, you can build relationships with potential clients and stay informed about new opportunities.

  • Effective Networking Strategies

Join local business groups and chambers of commerce to get noticed more. You can also talk at events or write articles for magazines related to your work to show you know a lot. Use websites like Facebook or Twitter to meet new customers and people who might want to work with you.

Market Your Courier Services

Lastly, to gain more clients, you need an effective marketing strategy. It can help increase your visibility and get you new clients. You should develop a detailed marketing strategy that includes an online presence, direct marketing, and traditional advertising. 

In your marketing campaigns, highlight what sets your courier service apart from others. You can provide faster delivery times, lower prices, or specialized services.

  • Marketing Tips

Make a nice website to show what you do, the tech you use, and what people say about you. Use marketing tricks to help more people find your website easily. Also, talk to people on websites like Facebook and Instagram and answer their questions quickly.

Calculating the value of the independent courier contract 

To calculate it, you need both potential expenses and potential gains. Here’s how you can deal with it:

Potential Expenses

To calculate the contract's value accurately, you'll need to account for various expenses. These might include:

  • Fuel Costs: Calculate your fuel expenses. They should be based on your vehicle's average mileage and fuel efficiency.
  • Salaries and Wages: Include payments for drivers and administrative staff.
  • Insurance: Add the insurance costs for all the vehicles and cargo.
  • Licenses and Permits: Add the fees you paid for licenses to operate legally.
  • Office Expenses: Also, add the rent for your office, utilities, and supplies.
  • Technology Costs: Investment in software for route optimization, tracking, and customer management.
  • Marketing and Advertising: Expenses aimed at acquiring new contracts and retaining customers.
  • Miscellaneous: Account for unexpected costs and contingencies.

Potential Gains

The gains from the contract will generally include:

  • Contract Value: The total payment agreed upon in the contract for the delivery services.
  • Potential Bonuses: Incentives for performance metrics like timely deliveries or customer satisfaction.

Calculating Total Contract Value (TCV)

To calculate it, consider the following: 

  • Recurring payments
  • Contract length
  • One-time fees

Formula:

TCV = (Monthly Recurring Revenue × Contract Term Length) + One-time Fees

For instance, if you have a contract where you charge $2000 per month for a year, and there’s a one-time setup fee of $500, the TCV would be:

TCV = (2000 × 12) + 500 = 24500.

Practical Example

Consider setting up a scenario in Excel where you input your monthly charges, the length of the contract, and any additional fees. 

Tips for Maximizing Contract Value

  • Efficiency in Operations: Utilize route planning and management software to reduce costs and improve service reliability.
  • Upselling Services: Offer additional value-added services that can increase the overall contract price.
  • Negotiate Longer Contracts: Longer terms can secure revenue for an extended period and provide stability.

For more detailed instructions and examples, you might find the explanation of the Total Contract Value (TCV) calculation from Wall Street Prep helpful

Measuring profits

IMPORTANT! When calculating profits out of the contract always remember to measure and include your expenses!

To do so, from the Total Contract Value extract your potential expenses. 

This will help you to both understand if the contract is valuable and estimate what remaining profits you will have if the contract is valuable.

How to manage courier operations?

Effective management of day-to-day operations is vital for a courier service. Follow these points for the best results.

  • Scheduling System: Use a system that can help you manage delivery schedules and prevent overbooking.
  • Route Optimization Software: You must have route optimization software to find the most efficient routes. This will save you time and fuel.
  • Contingency Plans: You should always be prepared for some common issues. Such as vehicle breakdowns or traffic delays.
  • Customer Communication: To make sure your customers are best served, regularly update them about the status of their deliveries to manage expectations and improve satisfaction.

Essential equipment and technology needed

To start a courier service efficiently, new couriers need the right tools and technology. Essential equipment includes a reliable vehicle—either a car, van, or bike—depending on the types of deliveries you plan to make. 

For technology, a smartphone equipped with GPS is crucial for navigation and managing delivery schedules. Additionally, investing in delivery management software can optimize routes and track parcels in real time, enhancing efficiency.

independent courier software

Build a competitive pricing model

You’ll need a competitive pricing model to attract and retain customers. You can start by searching the local market rates. This way, you will know what your competitors are asking for, and then you can set up a lower price while considering your expenses. These expenses include fuel, maintenance, insurance, and labor. 

You can also offer a pricing tier. It can be set according to delivery speed, distance, and package size. If you want to go one step further, consider providing promotions or discounts for regular customers. This will build loyalty and encourage them to come back again.

Summing Up

Most people's main question before this article was how to get independent courier contracts. We have now clearly stated every aspect of it. To sum up, remember to first identify the specific delivery needs of your potential clients. 

Also, engage in tender processes with compelling proposals and leverage technology to significantly enhance your operational efficiency. Tools like Track-POD can make things easier for you. These have amazing features like route optimization, real-time tracking, and ePOD, which can be a game changer for your business.

Businesses that have used Track-POD have greatly enhanced their ability to manage and secure independent courier contracts effectively. This tool helps you prepare for success in the competitive courier market. If you’re interested, try our software on a 7-day free trial today.