SHAN FRIEGHT

SERVICES PVT. LTD.

IU
Submitted to: Sir Ghazanfar Yar Khan

Syeda Tooba Saleem 34319

(Group Leader)

Muhammad Rizwan Bashir

34251

Muhammad Shahrukh Khan

32647

Sheikh Furqan Ali 21946

Ehsan Muhammad Hashmi

30719
Distribution has been done according to the contribution in
the report which is in percentage out of 100%:

Syeda Tooba Saleem (Group Leader): _________

Ehsan Muhammed Hashmi: __________
Sheikh Furqan Ali: _________
Muhammed Rizwan Bashir: __________
M. Shahrukh Khan: __________

1
 ACKNOWLEDGMENT

First of all we would like to thank Almighty Allah forgiving us the

wisdom to work on such a purposeful report which enhances our
knowledge as well as the practicality. Making an idea actually work is
not possible without the grace of Allah and our respected teacher who
directed us throughout the business plan. We are truly thankful to our
course facilitator Sir Ghazanfar Yar Khan. He has been very
cooperative and supportive throughout the semester and in preparing the
business plan report.

2
1EXECUTIVE SUMMARY:
Shan Logistics Private Limited is a freight forwarding company provides services of
freight forwarding to its clients. Shan Freight Services Pvt. Ltd. is scheduled to begin operations
from year 2018. Shan Freight Services Pvt. Ltd. will be a partnership, owned and operated by 5
partners investing equally.
Shan Freight Services Pvt. Ltd. has one of the best sales team and will provide services
regarding custom clearance, container management, slot management in a cost effective way.
Shan Freight Services Pvt. Ltd. operated in Pakistan, Middle East & south East Asia with the
assistance of strategic alliances with Allied Container Lines USA Inc. (NVOCC) as well as
Active Freight Forwarding Company (FF).
The initial startup expense for Shan Freight Services Pvt. Ltd. will include capital
investment of Rs.100,00,000/- each partner invest equally, having Main Office in Karachi at
Shahrah-e-Faisal and a strong agent network in countries where Shan Freight Services Pvt. Ltd.
operated. The Capital Investment will be used for Necessary license Fees, Sales and Marketing
as well as for office fixtures and rent.
Shan Freight Services Pvt. Ltd. initial strategy focuses on obtaining clients/customers and
developing credibility within Freight Forwarding Industry as well as among our targeted
customers plus risk minimization via making and implementing strategic alliances with NVOCC
& Freight Forwarder. And other strategy includes promotion and positioning strategies thru
which we will not only be attracting our customers but also making our brand image positive in
the mind of our customers as well as other freight forwarders, NVOCC, VOCC and slot
operators. Moreover, we will provide best cost with what we commit to our consumers along
with transparency in charges related to damages in containers.
After 3 years, Shan Freight Services Pvt. Ltd. Will have plan to start purchasing own
containers as well as selling of containers and once we will have expertise in freight forward
services, we will become the broker of commodities outside of the Pakistan.

2VISION:
“To provide a safe, speedy as well as satisfying shipping experience for our customers
and become the best in the industry.”

3MISSION:
“To provide the customer with secure, anxiety free as well as the most satisfying shipping
experience that they would ever have experienced by using the knowledge as well as experience
we would have and become the best among competitors thru the best business practices.”

4COMPANY DESCRIPTION:
We are forming a new business with the name of “Shan Freight Services Pvt. Ltd.”. It
will be basically a freight forwarder company. The head office of the company will be located in
Karachi, Pakistan. Shan Freight Services should contribute the fast business not only to the
global economy development, but also to the excellent management. The company will be
involved in sea freight forwarding and road freight services initially but later it will put its hands
in air freight forwarding as well. The company will be having some departments i.e. Sales

3
Support Department, Finance Department & Accounts Department. These departments works
together, step by step, to forward the consignment to get on board on time thru our strategic
alliance partners as we will be committed to provide excellent experience to our customers and
attract the new ones by good word of mouth regarding our company. Moreover, the strength of
this company will be the knowledge and experience (that we will have after few years of
establishment of this company) regarding the freight forwarding service, the commitments that
we will fulfill as well as the value added services that we will provide to our customers, plus the
strong relationship with our sales team and agents.

4.1Business in which we are:

We are in the freight forwarder business. More specifically, work as mediator between
importer & exporters via doing strategic alliance with NVOCC and freight forwarder.

4.2Industry:
The Shan Freight Services Pvt. Ltd. lies in the logistic industry. Precisely, in the freight
forwarding service which is going towards the boost now days.

4.3Target Market:
Our target markets are the importer, exporters, traders as well as freight forwarder
companies that trade in the regular cargo. Mainly, our focus is on telesales and direct sales
customers (SMEs).

4.4Business Model:
The Shan Freight Services Pvt. Ltd. will generate the revenue by providing customers to
the Freight Forwarder Company as well as NVOCC. We will take all types of commodities’
order that can be containerized on the basis of LCL/FCL from consumers except the heavy or
complex ones on the initial basis and provide those orders as LCL/FCL to the Freight forwarder
company and FCL to NVOCC, with whom we have strategic alliance, that will further book
these orders with the VOCC.

4.5Legal Form of Ownership:

Our company is Private Limited Corporation. The agreement has made among 5
shareholders and all the directors/shareholders have equally invested that is Rs. 2,000,000/- each
in this business and have equal profit sharing as well.

4.6Product scope:
We will be providing the best rates options that we will take from various NVOCC,
Freight Forwarders, VOCC, or shipping lines for our customers. Plus, the best transit time
according to the urgency and convenience of our customers.

4.7Service Scope:
 Custom clearance
 Inland transportation

4
  One window solution.
 Warehousing and distribution services only pertaining to import and export.

4.8Benefits to Consumers:
 Best cost.
 12 hours plus everyday customer service
 Service reach
 Door to door deliveries.
 Custom clearance service and documentation

5MARKET ANALYSIS:
5.1INDUSTRY:
Freight forwarding industry particularly in Pakistan relies on general shipments which
can generate larger revenues in terms of their complexities, it may be in documentation etc.
going an extra mile for the customer and give customer an ease should be the core value for a
freight forwarder. Freight forwarding opportunities are expected to increase due to increasing
trade activities through Karachi and Port Qasim. Trade reforms expected to increase volume of
trade with increase in inter and intra-regional trade. Development of new port at Gwadar
generates demand for warehousing, special economic zone, road and railway infrastructure
network. As the connectivity and linkage improves, this port will emerge as one of the major
transshipment hub in the region for transshipment goods to China and to Central Asian countries.
Freight forwarding industry is on boom in Pakistan as with the news of CPEC, freight forwarders
have announced to open a branch in Gwadar and have started booking office spaces. Gwadar will
behave as a transit port on which imports will come to move towards china and in land Pakistan
further some of the imports will be re-exported via Gwadar as equal to no duty on import will be
charged at Gwadar.

5.2Economic Analysis:
Pakistan economy is emerging by the time; it has immense potential throughout the year
which is being threatened by political instability otherwise it would have gone to highlighted
places in world growing economies. With the commence of Gwadar port operations Pakistan
economy will take a boom as majority of the manufacturing units will be established near
Gwadar and multinational firms will began to operate from Gwadar. As trade picks up, naturally
import and export activities will increase that will positively impact on freight forwarders
business.

5.3Regulations:
Regulations pertaining to the freight forwarding business in the Pakistan are to carry
business activities and be complied with the rules as well as regulations stated by the State Bank
of Pakistan, Federal Board of Revenue, and Trade Development Authority of Pakistan. We shall
not be involved in the trade of any commodity which is prohibited or banned by the government
of Pakistan.

5
5.4Competition Analysis:
There is a massive competition in the market as plenty of freight forwarders offers lowest
rates to the customers but there is a gap of “commitment with best prices” and retaining the
customer by keeping low margins and earn on long terms basis, because more and more
customers will be on board if given good services with commitment and ease to them. So
competition will always be there it depends how you analyze gaps in between and play your role
in fulfilling those gaps.
6STRATEGY & PLANS:
Our long term plan is that after taking our first step and starting with the sea freight
sector, we will penetrate in the air freight sector as well and expand our business, just after we
will be stable. Probably, we will capture the market of airport sector in the mid or end of fifth
year or after the fifth year.
The resources that we will need in order to effectively run and in expanding of our business
are as follows:
 We will need more skillful labors in our organization.
 We will need a larger amount of cash in hand.
 We will need to maintain the strong as well as good relationship with our targeted
shipping lines, NVOCCs & slot operators and companies (our customers)as it will help us
in long run of the company.
 We will need to maintain good and strong relationship with our sales team, as well as
overseas agents is essential for the betterment of our company.

6.1Overall Strategy:
Following are the elements which include in overall strategy of our company:

6.2Goals & objectives:

Our main objective is to fulfill the unsatisfied needs of our customers and provide them
the best shipping experience by giving them many options regarding rates thru which they can do
shipments easily and conveniently.

6.3Value Proposition:
Our company is majorly focusing on delivering the best cost with what we commit to our
targeted customers with providing transparency in terms of charges.

6.4Competitive Edge:
We will be providing lower rates to our customers as compare to our competitors and
taking care of their business by owning it.

6.5Marketing Strategies:
Marketing plays a very fundamental role in successful business projects. The key
elements of the successful marketing plan are to analyzing and evaluating the customer’s
preferences, needs, buying behavior, expectation from the services, likes and dislikes etc. And

6
for identifying this, we define & consider the following factors which will create our market
strategy that will fulfill the needs & demands of our targeted market.

6.5.1Price strategy:
We will provide the best price to our consumers as compare to our competitors that will
usually be low as we will be getting the containers in lower margins from NVOCC and lower
rates for FCL/LCL booking from freight forwarder , both are the ones with whom we will be
doing strategic alliance. This not only will create value but also creates competitive advantage in
order to compete with our direct as well as indirect competitors.

6.5.2Product/commodity strategy:
Initially, we will be focusing on having all the commodities as we would not be in a state
to be selective in orders of goods and its nature. Therefore, any order related to containerized
commodities that are not heavy neither hard to handle nor complex will be taken. Afterwards,
when we would have established our name in the market as well as able to handle heavy
commodities, we will take all kind of orders inclusive of heavy as well as complex or hard to
handle commodities/cargos. At the start, the commodities could be like scrap, second hand
clothing, cars, and the list go on. Moreover, our focus will also be on those commodities which
are trendy as well as having high demand in the market.

6.5.3Positioning strategy:
Our purpose is to position a positive image in the mind of our target market/customers in
order to make good name in the market. So for this purpose, we will use the positive word of
mouth (WOM) tactic by doing careful handling of our first orders taken from our initial
customers and satisfying them as well. Plus, for direct sales, we will do promotional activities on
social media especially on Linked In. Moreover, we will try to make more strong reference and
try to get more PR in order to get more revenue and sales which ultimately will help in the
increment of profit line.

6.5.4Sales strategy:
In order to get success for a freight forwarder, entering as new in the market is to offer
low rates to the customers to attract business initially. Strategy which Shan freight service has is
to attain number of shipments while having moderate profit margin, means to earn on a long
term basis on quantity of consignments.
Ensuring our sales strategy to be implemented down the chain, we ensure that our sales
person work more on quantity of shipments rather quality of shipments in terms of revenue to
have more and more customers on the board.

6.5.5Strategic Alliance:
Initially, we are doing two strategic alliances in order to start our business as well as to
establish our name in the market. The first alliance partner of our company will be the NVOCC
namely, Allied Container Line USA Inc. and the second alliance partner will be the Freight
Forwarder namely, Active Freight Services Pvt. Ltd. We will be using their capabilities as well
as their existing personal relations domestically and internationally. In return, we will give them

7
revenue via the number of consignments. So in this way we will both get mutual benefits. Plus,
we will be having 70:30 percent of profit sharing that would be agreed between us.

7OPERATIONAL PLAN SUMMARY:

7.1Order & Customer Management:

7.1.1For Tele Sales:

Calls to the customers > Asking for customer’s email to send company introduction > In
case of customer feedback asking freight rates > forwarding required rates to customers by
getting them from FF/NVOCC > Freight rate negotiation on email > In case of confirmation of
shipment from customer > forwarding the shipment details to FF/NVOCC > getting and
forwarding of shipment information from customer to FF/NVOCC > sharing of documents and
details with the customer finally.

7.1.2For Direct Sales:

In case of customer asking freight rates through email/phone > forwarding required rates
to customers by getting them from FF/NVOCC > Freight rate negotiation on email > In case of
confirmation of shipment from customer > forwarding the shipment details to FF/NVOCC >
getting and forwarding of shipment information from customer to FF/NVOCC > sharing of
documents and details with the customer finally.

7.2Credit Policies:
We are giving credit terms to our customer for 30 days so that they can do business
conveniently with us and also to maintain good & strong relationship with them at the same time
we’re getting 45 days of credit from our strategic FF/NVOCC partner so that payment/receipts
life cycle can easily be maintained. Plus, we will also provide some space to our clients to
purchase more inventories by freeing up some cash flow.

7.3Legal Requirements:
Legal Requirements to operate in a freight forwarder business is to take license of
Pakistan International Freight Forwarder Association (PIFFA), and Customs .Also general
requirement to register business in SECP, Karachi Chamber Of Commerce Industry (KCCI),
National Tax Number (NTN) and Sale Tax Department.
Charges to register in all these Government Bodies are:

 PIFFA = 25000 RUPEES (Initial Fee)

 CUSTOMS LICENSE = Rs. 300000
 SECP = Rs. 30000
 KCCI = Rs. 2600
 NTN = Rs. 2000
 SALES TAX = Rs. 10000 to 15000

And yearly Rs. 150000 is required for renewal of all these government bodies Charges.

8
7.4Location of Office and Agent Networks:
Initially, we will have only one office that will be located at Shahrah-e-Faisal in Karachi
and rest of the places will be operated via the agent networks. The locations from where we will
operate are divided into international and domestic places. For the international place, we will
operate thru UAE, India, Malaysia, Saudi Arabia, Iran, Qatar, Vietnam, Indonesia and China for
the initial three years and after it we will expand further. In UAE, our main target is Dubai &
Sharjah and if we go more specifically then Jebel Ali is the port that is our main target as it’s the
main port of Dubai. We choose Dubai as it’s the hub for shipping the cargo from one place to
another especially for the Middle-East countries and UAE. In china, we will be operating from
different ports, mainly from the hot ports of it. For domestic place, we will be having a head
office in Karachi. Other cities from where our strategic partner’s agent network will operate for
the initial three years are Faisalabad.

8MANAGEMENT PLAN SUMMARY:

8.1Organizational Structure:

MD

Manager Sea Manager Sea Manager Manager

Export Import Accounts Finance

Sales Sales
Executives(4) Executives(4)

Sales Support Sales Support

Officer Officer

8.2Professional Advisory Support:

There will be three departments in Shan Freight Services Pvt. Ltd. which
comprises of qualified staff members. The company will hire the staff on the basis of their
qualification and talent. The staff should understand the new marketing leads very well and

9
believes in the modern day’s idea generations. The personnel would also be trained to work in
tough competition, so they will be productive enough in the tough situations.
We will have one MD and four managers. The managers includes: sea export manager,
sea import manager, accounts managers and finance manager. There will be eight sales
executives, four under each sea export and sea import managers respectively. And under those
sales executives, there will be two sales support officer means one under each sea import and sea
export sales executives.
The duties of sales executives will be:
 To secure business from SMEs (Small & Medium Enterprises) as well as to
owned them to show greater responsibility.
 To give twelve hours stand by service to customers in case of any emergencies
and in return, sales executive will get fuel as well as food allowances.
 Sales executives will have the option to work from home if they have any issue
coming to office. This will give them not only flexibility but also motivations.

8.3Website and its maintenance:

The website of this organization will be www.ShanLogistics.com.pk which will provides
the major updates to or clients as well as help in online transactions and queries. The
maintenance of this website will be done time to time via external IT team which will be hired
for that particular task at that time.

8.4Departments and Resources:

There will be three departments in the start of our business that will be Marketing &
Sales Support Department, Finance Department and Accounts Departments. However, other
departments and fixed resources as well as expertise will be used of our strategic partners.

9RISK AND MITIGATION PLAN:

Entering in a new market:
As we start our new business, so the most difficult thing is How to penetrate into
a new market and how to capture the market.
Mitigation:
We are entering into an entirely new market, with limited core assets to leverage;
we should consider a joint venture/partnership. This option require target identification,
prioritization, deal negotiation. Prior findings can be leveraged to identify the appropriate
mix of market entry options that is linked to the business's core competencies, assets, and
overall strategy.

Lack of knowledge and Experience about Market:

We did not know about the market competition, market behavior, and operational
difficulties when we begin to enter in the market and start our business.
Mitigation:

10
 To mitigate this risk we will have to conduct in depth research of market and hire
well experienced employees who had a vast knowledge about market ups and downs as
well as we will visit different freight forwarder companies, sales persons and account
persons to gather the information and knowledge regarding this business.

Lack of Credibility:
In the Service industry the most difficult thing is to develop trust and credibility in
the market as well as in front of our consumers.
Mitigation:
To mitigate this risk we start with small projects and only give those services, in
which we have capability to deliver 100% also, will make strategic alliances with already
establish business.

Government Laws and Regulations:

For start a new business first you have to overview the government policies and
trend of changing in laws and regulation if it’s changing every year then it’s difficult to
compete and establish business.
Mitigation:
To mitigate this risk we to understand completely the laws and regulations of
government and also the licensing and tax policies ,also joint ventures and partnerships is
best option to mitigate this risk.

10GROWTH PLAN/MILESTONES:
After serving the industry with the best freight services, having the known name in the
market and expertise, Shan freight services will enter into container trading business as well as
commodity broker business in alliance with its strategic partners to help our new businesses to
grow we would be at the stage where we have freight expertise as well as commodity knowledge
globally that will be leveraged to gain growth in newly entered area of businesses.

11PROJECTIONS:
11.1Profit & Loss Statement:

2018 2019 2020 2021 2022

Sales - Cost of sales 16,080,000.00 19,296,000.00 23,155,200.00 34,732,800.00 52,099,200.00

less : Expenses

Salary Expenses 7,080,000.00 7,788,000.00 8,566,800.00 11,136,840.00 14,477,892.00

Utillity Bills 240,000.00 252,000.00 264,600.00 277,830.00 291,721.50

Rent Expenses 480,000.00 480,000.00 480,000.00 480,000.00 480,000.00

11
Office Fixtures 750,000.00 200,000.00
Administrative
Expenses 240,000.00 240,000.00 240,000.00 400,000.00 400,000.00

Total 8,790,000.00 8,760,000.00 9,551,400.00 12,494,670.00 15,649,613.50

Gross Profit 7,290,000.00 10,536,000.00 13,603,800.00 22,238,130.00 36,449,586.50

less Tax 17% 1,239,300.00 1,791,120.00 2,312,646.00 3,780,482.10 6,196,429.71

Net profit 6,050,700.00 8,744,880.00 11,291,154.00 18,457,647.90 30,253,156.80

11.2INVESTMENT:

Partners: 1 20,00000
2 20,00000
3 20,00000
4 20,00000
5 20,00000

Total 10000000

Thank You!!!

12