DAT Broker Benchmark Report

Freight broker margins recover in August

Freight broker gross margins recovered to 14.6% in August, as truckload rates stabilized and made the brokers' cost of purchased transportation more predictable. 

Revenues rose faster than costs, so the brokers retained 4.5% in net operating profit, after labor, overhead and taxes. 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 75% in the first eight months of 2018, year over year.

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Net operating profit rises to 31%

Operating profit hit a new high at 31% of net revenue in August, as average costs remained stable. Net revenue is the amount that's left after the broker pays the carrier. Brokers held labor expenses to 50% of net revenue, while overhead stayed under 16%, and another 2.7% went to interest, taxes, depreciation and amortization. 

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Freight Brokerage Monthly Division of Net Revenue August 2017-18

Revenue per employee edges down 3%

While revenue per employee declined 3% month over month, profit per employee rose 34% from July to August. Year over year, profit was more than 7 times higher (up 610%) on a 24% increase in revenue per employee, even though headcount rose 18% since August 2017.

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

Profit per load reaches $76

Brokers averaged more than $76 in profit per load in August, for the best result in more than two years. The monthly load count slipped 2% from July's record, however, and revenue per load edged up only 1% compared to July. 

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

Gross margins recover to14.6%

Gross margins hit an average of 14.6% in August, the best result since September 2017. August margins improved on July's 13.0% rate, as well as the 13.9% mark achieved in August 2017. Spot market rates edged up 1% in August, month over month, and 9% compared to August 2017. The increase was more moderate than in previous months, when rates were rising in double digits on a year-over-year basis. As rates became more predictable, it was easier for brokers to recover a more typical profit level.

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

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