Our network at a glance:
235 million load posts in 2018
More than 930,000 load posts per business day
More than 1.2 million load searches per business day
181 million are posted first on DAT or nowhere else
256 million load and truck posts
More than 570 million searches per year
$60 billion in annualized freight payments
Strong December revenues capped off a banner year for freight brokers, who enjoyed 56% top-line growth compared to 2017. The brokers ended up with subpar gross margins and a net operating loss, however, because they moved as many expenses as possible into December as part of a year-end tax strategy.
This report is derived from the monthly financial results of more than 100 freight brokerage companies. Their 2018 average annual revenue increased to $30.5 million from $19.5 million in 2017.
Labor expense ate up more than 100% of net revenues in December. Net revenue, also called gross margin, is the money that's left after the broker pays the carriers. Non-labor expense absorbed another 32%, and 3% went to interest, taxes, depreciation, and amortization, leaving the brokers with a net operating loss of 36%. The group has recorded a net operating loss in December for at least the past three years.
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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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Gross margins fell to 11% in December from 12.8% in November, in what appears to be an intentional tax strategy of paying as many expenses as possible in December. In the same month last year, gross margins were a more respectable 14% but yielded a lower dollar amount than in 2018.
Revenue per employee edged up 2% in December month over month, on a 4% increase in the average headcount. Compared to December 2017, revenue per employee dropped 12%. The brokers incurred a net loss per employee, which is a recurring feature of December results. That loss was more than twice as steep this year than it was in December 2017 on a per-employee basis.
Year over year, load counts were up 9% and revenue per load added 19%. Compared to November, load counts were off by 7% and revenue per load rose 17%. Brokers sustained a net loss per load in December of the past three years, which appears to be an intentional strategy.
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