How to Start a Delivery Service Business in Alberta 

Written by Evelyn Mytka, Contributing Writer

From online orders and important documents to construction materials and time-sensitive parts, businesses and customers rely on delivery services every day. 

Starting a courier or delivery business can offer a relatively flexible path into entrepreneurship. You may be able to start with a vehicle you already own, serve a small local area and grow as you build relationships with customers. But there is more to consider than having a reliable vehicle and knowing the fastest route across town. 

Insurance, vehicle requirements, pricing, operating costs and transportation regulations can all affect how you set up your business. 

If you’re thinking about starting a delivery service in Alberta, here’s what you need to know before you hit the road. 

1. Decide what kind of delivery service you want to offer 

“Delivery service” can mean many different things. Before you start buying equipment or looking for customers, decide what you want to deliver, who you want to serve, and how far you’re willing to travel. 

Some common delivery business models include: 

• Local courier services: Documents, parcels, and small packages delivered within a city or community. 

• Last-mile delivery: Moving products from a retailer, warehouse, or distribution point to the final customer. 

• Business-to-business delivery: Regular or on-demand deliveries between offices, retailers, manufacturers, or other businesses. 

• Specialized delivery: Furniture, equipment, temperature-sensitive products or other goods that may require additional equipment or handling. 

• Hotshot delivery: Time-sensitive loads, often for industries such as construction, agriculture, manufacturing, or oil and gas. 

• Contract delivery: Providing delivery services for another company on a regular or contracted basis. 

Think about the type and size of vehicle you’ll need, how far you’ll travel and whether you want scheduled routes, on-demand deliveries or a combination of both. 

Your choice matters. A local courier delivering small parcels in a car will have different costs and regulatory requirements than someone hauling equipment between Alberta communities in a truck and trailer. 

If you hire drivers, also review payroll deductions, employment standards, occupational health and safety, driver screening, and WCB coverage. Calling a worker an independent contractor does not automatically determine their status for tax, employment or WCB purposes. You can find more information on Revenue Canada’s website Employee or self-employed worker? 

2. Research your market 

Before you start driving, find out whether there is enough demand for your service. 

Start by identifying your potential customers. Depending on your business model, these might include: 

• retailers and ecommerce businesses 

• construction and trades businesses 

• manufacturers and wholesalers 

• professional offices 

• agricultural businesses 

• pharmacies and health-related businesses 

• restaurants and food businesses 

• individuals who need local pickup and delivery 

Look at the delivery companies already operating in your area. What do they deliver? How large is their service area? Do they specialize in a particular industry? How quickly can they make deliveries? 

You don’t necessarily need to compete by being the cheapest. You may find an opportunity by offering faster service, serving an underserved community, specializing in a particular type of delivery or building relationships with businesses that need dependable, recurring service. 

Business Link Alberta’s free market research services can help you better understand your industry, competitors, and potential customers before you launch. 

3. Understand your startup and operating costs 

A delivery business can have relatively low overhead compared with a business that requires a storefront, but vehicle expenses can add up quickly. 

Your startup budget might include: 

• purchasing, financing or leasing a vehicle 

• commercial vehicle insurance 

• business liability insurance 

• vehicle registration 

• fuel 

• maintenance and repairs 

• tires 

• cargo storage and securement equipment 

• dollies, carts or other loading equipment 

• a phone and data plan 

• route planning, dispatching or delivery software 

• accounting and invoicing software 

• business registration and licensing 

• website and marketing costs 

Don’t only calculate what it costs to make one delivery. Think about the full day. 

For example, a 100-kilometre delivery may involve another 100 kilometres of driving to return home, plus fuel, vehicle wear, insurance and several hours of your time. 

Building these costs into your financial projections can help you set prices that are sustainable rather than simply matching what another delivery company charges. 

4. Choose a business structure and register your business 

You’ll need to decide how your delivery business will be structured. 

Common options include operating as a sole proprietorship, partnership or corporation. Each has different considerations for taxes, liability, costs and administration. 

If you operate under a business name rather than your own personal name, you’ll generally need to register the trade name in Alberta. Remember that registering a business name isn’t the same as incorporating a business, and registering a trade name doesn’t give you ownership of that name. 

You’ll also need to check whether your municipality requires a business licence. Requirements can vary depending on where your business is based and where you operate. 

If your taxable revenues exceed the Canada Revenue Agency’s small supplier threshold of $30,000 in a single calendar quarter or over four calendar quarters, you’ll also need to register for and collect GST. You can voluntarily register before reaching the threshold.  

5. Check the rules for your vehicle and operating area 

Transportation requirements are one of the most important things to understand before launching a delivery business. 

The requirements depend on factors including: 

• the type of vehicle you’re using 

• its registered weight 

• whether you use a trailer 

• what you’re transporting 

• whether you operate only in Alberta or cross provincial or international borders 

In Alberta, certain commercial carriers must have a Safety Fitness Certificate (SFC). 

An SFC is required if you operate a truck, trailer or combination with a registered weight of 11,794 kg or more solely within Alberta. It is also required for a truck, trailer or combination registered for more than 4,500 kg when transporting goods outside Alberta. 

New carriers that require an SFC must complete Alberta’s Pre-Entry Program, which includes a compliance course and knowledge test, before applying for the certificate. 

If you’re starting with a car, SUV or smaller delivery van and operating locally, these particular SFC requirements may not apply to you. However, not requiring an SFC does not mean that no commercial vehicle rules apply. Vehicle registration, insurance, mechanical condition, cargo securement and other requirements may still apply. However, Don’t assume that all delivery businesses follow the same rules. Check the requirements for your specific vehicle, weight, cargo and operating area before you begin. 

Crossing into another province, territory or the United States can also change which transportation requirements apply. 

Confirm that each driver holds the appropriate class of driver’s licence for the vehicle or vehicle-and-trailer combination being used. Vehicle configuration, number of axles, air brakes and other factors can affect licensing requirements. 

6. Get the right insurance 

A personal auto insurance policy may not provide the coverage you need when you’re using your vehicle for business deliveries. 

Talk to an insurance provider about how you plan to use your vehicle and what you’ll be transporting. Depending on your business, you may need to consider: 

• commercial auto insurance 

• commercial general liability insurance 

• cargo or goods-in-transit coverage 

• coverage for equipment stored in your vehicle 

• additional coverage required by a customer or contract 

Be clear about the types of goods you plan to carry, the vehicle you’re using and where you’ll operate. Your coverage needs may change as your business grows, adds vehicles or begins transporting different products. 

Important: A courier or delivery business cannot transport passengers for payment without the appropriate driver’s licence and insurance. In Alberta, carrying passengers “for hire” generally requires a Class 4 licence, even when transportation is only an additional service offered by another business. 

7. Know what you’re allowed to transport 

Before accepting a delivery, understand what you’re carrying. 

Some products have additional rules for transportation, handling, storage or delivery. These can include dangerous goods, alcohol, cannabis, certain food products and other regulated items. 

For example, people who handle, offer for transport or transport dangerous goods generally need appropriate training and certification or must work under the direct supervision of someone who is appropriately trained. 

If you plan to specialize in a particular type of cargo, research the requirements for that product before offering the service. 

This is also an important reason to define your services clearly. A simple list of what you will and won’t transport can help you avoid accepting jobs your vehicle, insurance or training isn’t equipped to handle. 

Cargo must also be properly contained, immobilized or secured so that it cannot shift, leak, spill, blow off or fall from the vehicle. These responsibilities can apply even when the goods are not dangerous or otherwise specially regulated. 

8. Set your prices 

There are several ways to price delivery services. You might charge: 

• a flat rate per delivery 

• by distance 

• by hour 

• by delivery zone 

• based on the size or weight of the load 

• a regular rate for scheduled routes 

• a negotiated rate for ongoing business contracts 

You may also need additional charges for rush deliveries, long-distance trips, waiting time, additional stops, after-hours service or unusually large or difficult-to-handle items. 

When setting your rates, calculate your actual cost of completing the job. Include fuel, maintenance, insurance, vehicle depreciation, administration and your time. 

For longer-distance deliveries, remember to account for the return trip, especially if you’re unlikely to have another paid delivery bringing you back. 

Your goal isn’t simply to keep your vehicle moving. Each delivery needs to contribute enough to cover your expenses and support a profitable business. 

9. Create a system for managing deliveries 

Reliability is a big part of what you’re selling. 

Think through what happens from the moment a customer requests a delivery until the job is complete. 

Written service terms can help clarify prohibited goods, packaging responsibilities, delivery timelines, unsuccessful delivery attempts, payment terms, proof of delivery and how loss, damage or customer complaints will be handled. 

You’ll need a system for: 

• accepting and scheduling jobs 

• collecting pickup and delivery information 

• planning routes 

• communicating with customers 

• tracking deliveries 

• collecting signatures or other proof of delivery 

• managing invoices and payments 

• recording mileage and expenses 

• keeping vehicle maintenance records 

• responding to delays, damaged goods or missed deliveries 

You may be able to manage a small number of deliveries with simple tools at first. As your volume grows, dispatching, route optimization and customer management software can help you stay organized. 

Because delivery businesses collect names, addresses, phone numbers, signatures and sometimes building-access information, develop reasonable procedures for collecting, using, protecting and disposing of customer information in accordance with applicable privacy requirements. 

10. Find your first customers 

You don’t have to wait for customers to find you. 

Create a list of businesses in your service area that regularly need goods moved from one place to another. Introduce your business, explain the area you cover and be specific about the type of delivery you provide. 

For a local courier, that could mean reaching out to retailers, professional offices or ecommerce businesses. A hotshot operator might focus on construction companies, farms, industrial businesses or equipment suppliers. 

Recurring business customers can be particularly valuable because they can provide more predictable work than relying entirely on one-time deliveries. 

As you build your business, keep track of which customers, routes and types of deliveries are most profitable. That information can help you decide where to focus your time as you grow. 

Ready to start your delivery business? 

A delivery business can start small, but taking the time to understand your market, costs and responsibilities can help you build a stronger foundation. 

Business Link Alberta offers free one-to-one support, market research, business planning tools, webinars and other resources for Alberta entrepreneurs. 

Whether you’re still exploring your idea or you’re ready to start taking deliveries, connect with Business Link Alberta to explore your next steps.