Freight brokers boost profits off the chart, with strong revenue growth

Even with a 35% increase in headcount, freight brokers enjoyed a 20X spike in profit per employee, 25% higher revenue per employee, and a 75% increase in total revenue, against last year's Q2.

Gross margins averaged a disappointing 12.8%, and continuing high freight rates mean that margin compression could continue to be an issue through the second half of the year, especially on longer-term contracts.

DAT Keypoint, the TMS created exclusively for freight brokers, keeps track of all your business-critical data.

This benchmark report draws data from an aggregate of more than 100 freight brokerage companies, whose 2017 average annual revenue of $19.5 million rose 70% in the first half of 2018, compared to the same period last year.

Brokers achieved a net operating profit above 23% in Q2, due to a healthy balance between revenue and expenses. Labor expenses were held to 55% of net revenue, 19% went to non-labor expense, and 2.9% to interest, taxes, depreciation and amortization.

Get the full monthly report, delivered to your inbox. Subscribe to the DAT Broker Benchmark Report.

Profit per employee rose 20X higher in Q2 on 25% more revenue, compared to the same period in 2017. All per-employee metrics showed dramatic improvement, even though average headcount rose 35%, year over year. Compared to Q1, profit per employee quadrupled, and revenue rose 8%, on a per-employee basis.

Brokers in the group moved an average of 38% more loads in Q2, compared to the same period last year, to set another new record. Load volume rose 18% compared to Q1.

A record $47.08 in profit per load rose more than 19X against last year's Q2 average of $2.43. Revenue per load jumped 27% for the quarter. Compared to Q1, profit tripled while revenue slipped 1% on a per-load basis.

The only disappointment in Q2 was an uninspiring 12.8% average gross margin, a slight improvement over 12.0% in Q1, but not quite up to Q2 2017 at 13.2%. Spot market rates have risen steeply, boosting the cost of purchased transportation by 37% for dry van freight since Q2 2017. Rates are expected to remain elevated through the second half of the year, so margin compression may continue to be a factor.

Get the full monthly report, delivered to your inbox. Subscribe to the DAT Broker Benchmark Report.

Categories: Best Practices and Benchmarks



Comments

About DAT

DAT operates the largest truckload freight marketplace in North America. Transportation brokers, carriers, news organizations and industry analysts rely on DAT for market trends and data insights derived from 256 million freight matches and a database of $60 billion of market transactions.

The Original Load Board - Trusted Since 1978

The company was established in 1978 as the Dial-A-Truck (DAT) load finder service at Jubitz® truck stop in Portland, OR.

TIA
OOIDA
CSCMP
MATS