Starting a Logistics Company in the UK: Step-by-Step Guide (2026)
How to start a logistics company in the UK. Licences, costs, vehicle requirements, insurance, and step-by-step setup guide. From courier to freight.
By SupplySift Team
Key Takeaways
Starting a logistics company in the UK costs £5,000–£15,000 for a courier or delivery business (van, insurance, marketing), £30,000–£100,000+ for a freight or haulage operation (HGV, operator’s licence, fuel deposits), or £50,000–£250,000+ for a fulfilment warehouse (lease, racking, WMS, staff). You need a standard operator’s licence from the Traffic Commissioner for goods vehicles over 3.5 tonnes, CPC qualification for transport managers, and goods-in-transit insurance as a minimum. SupplySift’s directory lists 1,116 freight companies and 287 fulfilment providers already operating in the UK — this is the market you would be entering.
The UK logistics industry contributes over £130 billion to the economy annually and employs 2.7 million people. Demand is growing, driven by ecommerce volumes that show no sign of slowing. But the sector is competitive — from sole-trader couriers running a single van to global operators like DHL and GXO with thousands of employees.
This guide covers the four main types of logistics business you can start, what each costs, the licences and legal requirements you need, and how to find your first customers. Whether you are considering a courier business with one van or a fulfilment warehouse serving ecommerce brands, every step is covered. For context on who you would be competing with, browse SupplySift’s directory of UK freight and logistics companies.
What Type of Logistics Company Should You Start?
The logistics sector is broad. Before investing, decide which model fits your capital, skills, and target market. Each type has different startup costs, licensing requirements, and revenue potential.
Courier and delivery service
The lowest barrier to entry. You need a van, insurance, a smartphone, and customers. Courier businesses handle same-day and next-day deliveries for local businesses, ecommerce sellers, and individuals. Many couriers start by subcontracting for established networks like Amazon Flex, DPD, or Evri before building their own client base.
Startup cost: £5,000–£15,000. No operator’s licence required for vehicles under 3.5 tonnes. Revenue potential: £30,000–£60,000 in year one as a sole trader, scaling with additional drivers and vehicles.
Freight and haulage company
Moving goods in bulk over longer distances using HGVs (Heavy Goods Vehicles). This requires significantly more capital, a standard operator’s licence from the Traffic Commissioner, and a qualified transport manager with CPC (Certificate of Professional Competence). Haulage companies serve manufacturers, wholesalers, retailers, and importers.
Startup cost: £30,000–£100,000+. Revenue potential: £100,000–£500,000+ depending on fleet size and contracts. Higher margins on specialist routes (temperature-controlled, hazmat, oversized loads).
Fulfilment and 3PL warehouse
Storing inventory for ecommerce sellers and shipping their orders. This is a warehouse-based, technology-heavy business requiring a lease, racking, a warehouse management system (WMS), packing stations, and staff. The growth of ecommerce has made fulfilment one of the fastest-expanding segments in UK logistics.
Startup cost: £50,000–£250,000+. Revenue potential: £200,000–£1,000,000+ at scale. Recurring revenue from storage fees and per-order charges makes this model attractive for long-term growth. See what existing UK fulfilment providers offer to understand the competitive landscape.
Freight brokerage
The asset-light model. Freight brokers match shippers with carriers, taking a commission on each load without owning vehicles or warehouses. You need industry knowledge, a phone, a computer, and a network of carriers and shippers. No operator’s licence required.
Startup cost: £2,000–£10,000. Revenue potential: £40,000–£150,000+ depending on volumes and margins. Lower risk but requires strong sales skills and industry relationships.
| Business Type | Startup Cost | Licence Required | Typical Year 1 Revenue | Time to Profitability |
|---|---|---|---|---|
| Courier / delivery | £5,000–£15,000 | No (under 3.5t) | £30,000–£60,000 | 3–6 months |
| Freight / haulage | £30,000–£100,000+ | Yes (operator’s licence) | £100,000–£500,000+ | 6–18 months |
| Fulfilment / 3PL | £50,000–£250,000+ | No | £200,000–£1,000,000+ | 12–24 months |
| Freight brokerage | £2,000–£10,000 | No | £40,000–£150,000+ | 3–12 months |
How Much Does It Cost to Start a Logistics Company?
Courier and delivery startup costs
| Item | Cost Range |
|---|---|
| Van (used, reliable) | £3,000–£10,000 |
| Van insurance (commercial) | £1,200–£3,000/year |
| Goods-in-transit insurance | £300–£800/year |
| Public liability insurance | £150–£400/year |
| Fuel (monthly) | £400–£800 |
| Smartphone and route planning app | £50–£200 |
| Marketing (website, leaflets, Google Ads) | £500–£2,000 |
| Total to launch | £5,000–£15,000 |
Freight and haulage startup costs
| Item | Cost Range |
|---|---|
| HGV (used 7.5t–18t) | £15,000–£50,000 |
| Operator’s licence application | £401 (standard) |
| Transport manager CPC qualification | £2,000–£3,500 |
| HGV insurance | £3,000–£8,000/year |
| Goods-in-transit insurance | £500–£2,000/year |
| Fuel deposit and running costs | £2,000–£5,000/month |
| Tachograph and compliance equipment | £500–£1,500 |
| Operating centre (yard/parking) | £500–£2,000/month |
| Total to launch | £30,000–£100,000+ |
Fulfilment warehouse startup costs
| Item | Cost Range |
|---|---|
| Warehouse lease (5,000–10,000 sq ft) | £3,000–£8,000/month |
| Racking and shelving | £5,000–£15,000 |
| Warehouse management system (WMS) | £200–£1,000/month |
| Packing stations and equipment | £2,000–£5,000 |
| Initial staff (2–4 people) | £4,000–£10,000/month |
| Carrier accounts (DPD, Royal Mail, Evri) | £500–£2,000 setup |
| IT infrastructure | £2,000–£5,000 |
| Total to launch | £50,000–£250,000+ |
Funding options
- Start Up Loans — government-backed personal loans of £500–£25,000 at 6% fixed interest (gov.uk/start-up-loans)
- Asset finance — spread the cost of vehicles over 3–5 years; most HGV and van dealers offer finance
- Commercial loans — high street banks and specialist lenders offer business loans from £25,000+
- Invoice factoring — release cash tied up in unpaid invoices, useful for haulage businesses with 30–60 day payment terms
What Licences and Legal Requirements Do You Need?
Company registration
Register as a sole trader or limited company with Companies House. A limited company offers personal liability protection — important in logistics where goods damage, vehicle accidents, and contract disputes are real risks. Registration costs £12 online at Companies House.
Operator’s licence
Required for goods vehicles over 3.5 tonnes gross vehicle weight. You apply through the Traffic Commissioner for your region. The process takes 7–9 weeks and includes:
- Demonstrating financial standing (typically £3,100 for the first vehicle, £1,700 for each additional)
- Nominating a qualified transport manager (CPC holder)
- Having a suitable operating centre (where vehicles are parked and maintained)
- Passing a good repute check
The application fee is £401 for a standard national licence. Restricted licences (own goods only) cost £401 and do not require a CPC-qualified transport manager.
You do not need an operator’s licence for vehicles under 3.5 tonnes — this covers most vans used for courier and delivery work.
Certificate of Professional Competence (CPC)
Transport managers for operator’s licence holders must hold a CPC. This requires passing two examinations set by the Chartered Institute of Logistics and Transport (CILT) or OCR. Courses typically cost £2,000–£3,500 and take 1–2 weeks of study.
Driver CPC is separate — all professional HGV drivers must complete 35 hours of periodic training every 5 years to maintain their licence.
Insurance requirements
- Goods-in-transit insurance — covers damage or loss to goods you are transporting. Essential for any logistics business. Costs £300–£2,000/year depending on coverage limits.
- Public liability insurance — covers injury or property damage to third parties. Typically £1–£5 million cover. Costs £150–£500/year.
- Employers’ liability insurance — legally required if you have employees. Minimum £5 million cover. Costs £400–£1,500/year.
- Motor insurance — commercial vehicle insurance for business use. Costs £1,200–£8,000/year depending on vehicle type.
- Professional indemnity insurance — advisable for freight brokers providing advice and arranging transport.
HMRC registration
Register for VAT if your turnover exceeds £90,000 (2024/25 threshold). Register for Self Assessment if operating as a sole trader. PAYE registration is required before hiring employees.
GDPR compliance
If you handle customer data — names, addresses, delivery preferences — you must register with the Information Commissioner’s Office (ICO). Registration costs £40–£2,900/year depending on business size.
What Vehicles and Equipment Do You Need?
Vans for courier work
| Van Type | Payload | Best For | Typical Cost (Used) |
|---|---|---|---|
| Small van (Vauxhall Combo, Ford Transit Connect) | 600–800 kg | Parcels, documents, small items | £3,000–£8,000 |
| Medium van (Ford Transit Custom, VW Transporter) | 1,000–1,200 kg | General courier, multi-drop | £5,000–£12,000 |
| Large van (Ford Transit LWB, Mercedes Sprinter) | 1,200–1,500 kg | Bulky items, furniture, pallets | £7,000–£15,000 |
| Luton van (with tail lift) | 1,500–2,000 kg | House removals, large deliveries | £8,000–£18,000 |
Electric vans are increasingly viable for urban deliveries. The government Plug-in Van Grant offers up to £2,500 off new electric vans, and Clean Air Zone charges in cities like Birmingham, Bristol, and London make electric the cheaper option for city-centre work. Established providers like Diamond Logistics Birmingham already use mixed fleets to serve urban clients efficiently.
HGVs for haulage
HGV categories range from 7.5-tonne rigids (Category C1 licence) to 44-tonne articulated lorries (Category C+E licence). A used 7.5t rigid costs £15,000–£30,000; a used articulated unit costs £25,000–£60,000. Leasing is common — typical HGV lease costs run £800–£2,500/month depending on age and specification.
Vehicle leasing vs buying
Buying outright gives you an asset but ties up capital. Leasing preserves cash flow and typically includes maintenance packages, but costs more over time. For a first vehicle, leasing often makes sense — it reduces upfront risk and lets you prove the business model before committing capital.
How Do You Find Your First Customers?
Subcontracting for established networks
The fastest route to revenue. Amazon Flex, DPD, Evri, and Royal Mail all use subcontracted drivers. Pay is typically £12–£18 per hour or per-route. This provides immediate income while you build your own client base — but margins are thin and you are competing on price.
Direct B2B sales
Approach local businesses that ship products: ecommerce sellers, manufacturers, wholesalers, florists, bakeries, medical suppliers. Offer reliability, flexibility, and personal service that the large carriers cannot match. A single contract with a mid-size ecommerce business shipping 100+ parcels per day can anchor your revenue. Study how successful operators like Charles Kendall Freight (80+ years in Southampton) have built long-term client relationships.
Online presence and directories
A professional website, Google Business Profile listing, and directory listings generate inbound leads. List your business on logistics directories — SupplySift lists over 1,116 freight and logistics companies and is free to search. Being visible where businesses look for providers is more cost-effective than cold calling.
Load boards and freight exchanges
For haulage businesses, platforms like Haulage Exchange, Freight Trader, and TransRush connect you with available loads. Commission rates typically run 5–15% per load. These platforms fill gaps in your schedule and help new operators build a track record.
What Technology and Systems Do You Need?
Route optimisation
Route planning software like Routific, OptimoRoute, or Circuit reduces fuel costs by 15–25% and increases deliveries per day. At even 20 deliveries per day, optimised routing saves 30–60 minutes — time that translates directly into capacity and revenue.
Transport management systems (TMS)
For freight and haulage, a TMS handles job booking, driver allocation, tracking, proof of delivery, and invoicing. Options range from basic (£50–£200/month) to enterprise (£500+/month). Popular UK options include Mandata, Stream, and Trimble.
Warehouse management systems (WMS)
For fulfilment businesses, a WMS is non-negotiable. It manages inventory, processes orders, generates pick lists, and integrates with ecommerce platforms like Shopify, Amazon, and WooCommerce. Popular options include Mintsoft, Peoplevox, and ShipHero — costs typically run £200–£1,000/month depending on order volume. To see what technology established 3PLs offer their clients, compare providers like Huboo Fulfilment (35+ integrations) and Flow Fulfilment in Yorkshire.
Proof of delivery (POD)
Electronic POD systems capture signatures, photos, and GPS timestamps on delivery. Customers expect real-time tracking updates. Most route planning and TMS platforms include POD functionality, or standalone apps like PODfather and Scurri provide dedicated solutions.
How Do You Scale a Logistics Business?
When to hire
Your first hire should be a driver or warehouse operative — the role that directly generates revenue. Hire when you are consistently turning away work or when delivery windows are slipping because you cannot handle the volume alone. Administrative tasks (invoicing, customer service, compliance) can be managed with software longer than most new operators expect.
Adding services
Once established in one area, expand into adjacent services. A courier business can add warehousing. A haulage company can add storage and container devanning. A fulfilment provider can add returns handling and reverse logistics. Each additional service increases revenue per customer and makes your business harder to replace.
Industry associations
Join relevant industry bodies to build credibility and access resources:
- Logistics UK (formerly Freight Transport Association) — the largest UK logistics trade body, offering compliance guidance, legal support, and industry lobbying
- RHA (Road Haulage Association) — focused on road transport operators, providing business support and regulatory advice
- BIFA (British International Freight Association) — for freight forwarders, offering training, standard trading conditions, and industry representation
- UKWA (United Kingdom Warehousing Association) — for warehouse and fulfilment operators
Membership signals professionalism to potential clients and provides access to training, insurance schemes, and industry networking.
Common mistakes to avoid
Underpricing to win contracts. New operators often set rates too low to compete with established providers. This wins volume but destroys margins — and once a client expects a price, raising it risks losing them. Price based on your actual costs plus margin, not on what you think competitors charge.
Ignoring compliance. DVSA (Driver and Vehicle Standards Agency) conducts roadside checks and operator audits. Non-compliance with operator licensing, tachograph rules, or vehicle maintenance standards leads to fines, prohibition notices, and licence revocation. The Traffic Commissioner publishes enforcement decisions publicly — your reputation is at stake.
Growing too fast. Adding vehicles and staff before securing contracts creates fixed costs without guaranteed revenue. Grow in step with demand, not ahead of it.
Frequently Asked Questions
How much does it cost to start a logistics company in the UK?
A courier or delivery business costs £5,000–£15,000 to start (van, insurance, marketing). A freight or haulage company costs £30,000–£100,000+ (HGV, operator’s licence, operating centre). A fulfilment warehouse costs £50,000–£250,000+ (lease, racking, WMS, staff). A freight brokerage is the cheapest at £2,000–£10,000 with no vehicle or warehouse costs.
Do I need an operator’s licence for a van delivery business?
No. An operator’s licence is only required for goods vehicles over 3.5 tonnes gross vehicle weight. Most delivery vans — including Ford Transit, Mercedes Sprinter, and Vauxhall Vivaro models — are under 3.5 tonnes and do not require one. You still need commercial vehicle insurance, goods-in-transit insurance, and a standard driving licence.
How profitable is a logistics company in the UK?
A sole-trader courier typically earns £25,000–£45,000 net profit in the first year. A small haulage operation with 2–3 HGVs can generate £50,000–£150,000 profit. Fulfilment warehouses with established client bases earn 15–25% net margins on revenue. Profitability depends heavily on utilisation rates — empty vans and empty warehouse shelves generate zero revenue at full cost.
What insurance do I need for a logistics startup?
At minimum: goods-in-transit insurance (£300–£2,000/year), commercial motor insurance (£1,200–£8,000/year), and public liability insurance (£150–£500/year). If you have employees, employers’ liability insurance is legally required (minimum £5 million cover, typically £400–£1,500/year). Freight brokers should add professional indemnity insurance.
Can I start a logistics company as a sole trader?
Yes, but a limited company is recommended. Sole traders have unlimited personal liability — if a driver damages £50,000 of goods or a vehicle causes an accident, your personal assets are at risk. Forming a limited company costs £12 at Companies House and separates personal and business liability. Most haulage and fulfilment operators trade as limited companies.
See Who You Would Be Competing With
SupplySift lists over 1,116 freight and logistics companies and 287 fulfilment providers already operating across the UK. Browse by region — including logistics companies in the North West and freight forwarders in the South East — to understand your local competitive landscape, or read our guide to the top logistics companies in the UK for an overview of the biggest players. Ready to see how your services compare? Get quotes from existing providers to benchmark pricing in your target market.