DAT Broker Benchmark Report

Freight broker revenues keep pace with costs in October

Revenues and costs rose by about the same amount for freight brokers in October, indicating that high rates paid by shippers were passed along to carriers. As a result, the brokers' gross margins stalled at 12.5%. October's load counts were similar to September's, but brokers made more money per load, month over month.

This report is derived from the monthly financial results of more than 100 freight brokerage companies. Their 2017 average annual revenue of $19.5 million has risen 65% in the first ten months of 2018, year over year, putting them on track to exceed $30 million for the year. 

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Net operating profit rises 30%

Operating profit rose 30% month over month, because net revenue rose faster than expenses. Compared to October 2017, however, operating profit declined 19%, due mostly to an increase in labor expense. As a percentage of net revenue, labor expense came to 65%, non-labor expense was just under 19%, and 2.8% went to interest, taxes, depreciation and amortization, leaving 12.7% net operating profit. 

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Top-line revenue rises with freight rates

Total revenues averaged almost $2.8 million for the month, up 11% month over month, and 34% higher than last October. For the year to-date, revenues are up 65% compared to the same period in 2017. High truckload freight rates contributed to the revenue increase.

Freight Broker Total Monthly Revenue vs Prior Year - October 2017 -2018

Gross margins stall at 12.5%

Gross margins averaged 12.5% in October, an improvement over September's 12.1% but lackluster when compared to 14.1% margins in October 2017. Elevated rates ate away at the margin as a percentage, but yielded strong results in dollar terms. Brokers averaged almost $200,000 in net revenue, which is what's left after paying carriers. 

Average Spot Market Van Rates and Freight Brokerage Gross Margins by Month - October 2017 - 2018

Revenue per employee adds 11%

Revenue per employee added 11% in October month over month, with no change in the average headcount. The increased revenue had more to do with rates than productivity, however. Compared to October 2017, revenue per employee dropped 6%, and profit per employee tumbled 43%, due mostly to a 43% increase in headcount,  year over year. 

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Freight Brokerage Monthly Revenue and Profit Per Employee - October 2017-18

Load volume holds steady as revenue rises

Brokers moved 2% fewer loads in October, month over month, but revenue per load rose 14% and profit per load added 33%, compared to September. Load counts were 31%  higher and revenue per load added only 2% compared to October 2017, while a $26 average profit per load was 38% lower than last year's result.

Freight Brokerage Monthly Revenue and Profit Per Load - October 2017-18

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