Buying a logistics company in Florida

Logistics companies arrange and handle freight more than they haul it. They include freight brokers that match shippers with trucking companies, freight forwarders and customs brokers that move international shipments through Florida's ports and airports, courier and delivery services, and warehouses that store, pick and pack goods for other companies. Many are in South Florida, moving goods to and from Latin America and the Caribbean.

Brokers and forwarders earn the difference between what the customer pays and what the carrier charges, plus fees for customs paperwork, documentation and insurance. Warehouses charge for storage by the pallet or square foot, plus handling fees. Couriers charge per stop, route or delivery, often under contracts with a few large shippers.

Brokers and forwarders own few physical assets. What you'd buy is customer relationships, carrier networks, licenses, systems and the people who run them. Warehouses and couriers add leases, equipment and vehicles. Brokers often pay carriers before customers pay them, so the business needs cash to cover the gap.

• Many long-standing customers, not one dominant account.
• A margin per shipment that holds up when freight rates rise or fall.
• Customers who buy more than one service, such as customs clearance, trucking and storage, and are harder to lure away.
• Trusted carriers and agents, and a routine for checking their authority and insurance on every load.
• Experienced staff, not only the owner, who know the customers.
• Software that tracks every shipment and invoice.
• For warehouses, customer contracts that run several years and a lease that outlasts them.
• A clean record with the Federal Motor Carrier Safety Administration (FMCSA), Customs and other agencies.

Most logistics licenses are federal, and several need approval or notice when ownership changes:

• Freight brokers need broker authority (federal permission to operate) from FMCSA and a $75,000 surety bond or trust fund (49 CFR 387.307). Freight forwarders need forwarder authority. Authority moves to a buyer only through FMCSA's transfer process (49 CFR 365.405T).
• Customs brokers need a license from U.S. Customs and Border Protection (CBP). A corporation must have at least one officer who holds an individual broker license. Ownership changes must be reported in writing immediately, and CBP may investigate any new owner of 5 percent or more (19 CFR 111.11 and 111.28).
• Ocean forwarders and NVOCCs (companies that sell ocean shipping under their own bills of lading) need a Federal Maritime Commission (FMC) license. Transferring a corporate license or changing the qualifying individual needs prior FMC approval, and ownership changes of 5 percent or more must be reported within 30 days (46 CFR 515.20).
• Warehouses that hold food need a state food permit, which doesn't transfer. Those that handle prescription drugs need a permit from the Florida Department of Business and Professional Regulation.

We found no Florida license for freight brokers or general warehouses beyond a local business tax receipt. Confirm the transfer steps with each agency.

• Revenue and margin by customer and service (truckload, ocean, air, warehousing).
• How fast the company pays carriers, and any unpaid carrier claims.
• Past cargo claims and insurance, including coverage for loads the company arranges but doesn't haul.
• Customer and warehouse contracts: length, whether they can be transferred to you, and limits on liability for lost or damaged goods.
• Who holds the customs broker license or FMC qualification, and whether they'll stay after the sale.
• Software and data: who owns the systems and customer data, and what they cost.
• What customers owe and how overdue it is. A broker that gives shippers long payment terms is lending them money.

• Who are your top ten customers, and who looks after each one?
• How do you check carriers before you give them a load?
• Who holds the customs or FMC licenses, and will they stay?
• What happened to your margins when freight rates fell?
• Have you had any cargo claims or payment disputes with carriers?
• How much revenue comes from customers you brought in personally?
• What software runs the business, and do you own it or rent it?