DAT Broker Benchmark Report

Freight brokers Q2 profits soar "off the chart"

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. 

Data in this report derived from more than 100 freight brokerage companies with average annual revenue of $19.5 million in 2017. Revenues for the group are up 70% in the first half of 2018, compared to the same period last year.

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Cost control adds to net operating profit

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.

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Freight Brokerage Quarterly Division of Net Revenue Q1 2016 - Q2 2018

Profit per employee skyrockets

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.

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Freight Brokerage Quarterly Revenue and Profit Per Employee - Q1 2016 - Q2 2018

Record load volume grows another 38%

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

Freight Brokerage Loads Per Quarter - Q1 2016 - Q2 2018

Profit per load spikes 19X higher

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. 

Freight Brokerage Quarterly Revenue and Profit Per Employee - Q1 2016 - Q2 2018

Gross margins stall at 12.8%

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.

Average Spot Market Van Rates and Freight Brokerage Gross Margins by Month - Jan 2016 - Jun 2018

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