DAT ® Special report
6th Annual Broker Benchmark Survey
DAT 2013
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Survey Highlights
Broker profits rise 2.8% in 2012,
due to modest increases in rates and margins
Average profit margins for non-asset-based freight brokers edged up from 14.1%
to 14.3% in 2012, compared to 2011. The increased margin, combined with a 1.4%
increase in annual revenues, yielded a 2.8% boost in total gross profit for the year.
The incremental revenue was due largely to a 0.9% increase in spot market
rates, compared to 2011.
On a per-load basis, brokers received $1,219 in average revenue, up 1.8% from
$1,197 in 2011. This yielded a gross profit of $175 per load, a 3.3% increase from
$169 in the previous year.
14.3%
Average gross margin for non-asset-based freight brokers in 2012
392
loads per month, down 0.4%
from 394 in 2011
$175
from $169 in 2011
Business volume remains constant
The number of loads handled per month was almost unchanged at 392, down
0.4% from 394 loads per month in 2011. Length of haul also remained constant
at 812 miles (up a tenth of a percent from 811 miles in the previous year.)
$5.74 million
Average annual revenue per
company, up 1.4% from
$5.66 million in 2011
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Mid-sized firms achieve highest revenue per employee
Employees were most productive at mid-sized companies with 11 to 50 employees,
but average revenue per employee was in the $700,000 to $750,000 for survey
respondents in all groups.
Analysis: Some small firms deploy agents to bolster sales without adding to employment rolls; revenues per employee are calculated without considering agents.
Other companies use technology to supplement a lean back office staff.
78% could have handled more loads
Although they moved 13% more loads in 2012 than in 2011, more than three out of
four brokers (78%) reported that they could have handled even more freight than
they were offered last year. Only 10% of respondents turned down loads throughout the year, while 10% did so only during their busiest seasons. The remaining
2% said that they were able to handle all the loads they were offered, but not more.
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Strategic Use of Load Boards Yields 15% Margin
Brokers who relied on commercial load boards to find more than 75% of their truck
capacity achieved the highest profit margins in both 2011 and 2012. This strategic
use of load boards corresponded to a 15% average margin or higher in both years,
while profitability ranged from 13.3% to 14.5% for other groups among the survey
respondents.
2012 by the Numbers
5.6 to 1
ratio of spot market loads to
available trucks in 2012, down
11% from 6.3 in 2011
7.6%
Year-over-year increase in
spot market loads
Larger Role for Independent Agents, Carrier Relations and IT Staff
A 61% increase in average compensation for independent agents indicated a larger
role for those individuals among non-asset brokers surveyed. Brokerage firms often add agents rather than employees, as a way to accelerate growth. The agents,
who are independent business owners, typically have their own customers and
some also have multiple employees.
Within the brokerage firms, compensation jumped by 30% for carrier relations
staffers and by 54% for information technology employees, indicating that those
functions received greater attention and resources in 2012.
As in previous years, most brokerage firms paid all or part of their employees’
health insurance coverage in 2012. More than half contributed to dental insurance
and pension or 401(k) plans, as well. Life insurance, vision insurance and profit
sharing were also popular benefit choices.
2.7%
Year-over-year increase in ATA
for-hire truck freight tonnage
index, not seasonally adjusted.
$1.90*
Average spot market rate
per mile, including fuel, up
0.9% from $1.89 in 2011
$2.10*
Average contract rates per mile,
including fuel, up 3.8% from
$2.03 in 2011.
* rates are a weighted average of “broker buy”rates for
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Context: Slow Growth in 2012
Spot market freight availability rose 7.6% in 2012. This growth appears robust
in the context of the larger trucking freight market and the economy in general.
Capacity shortages did not materialize in 2012, due to the pattern of modest
economic growth. Indeed, 78% of freight brokers reported that they were able
to handle all the freight they were offered by shippers in 2012, a clear indication that capacity was sufficient. Likewise, the load-to-truck ratio declined
11% on the spot market in 2012, as more trucks were available to handle loads
offered on commercial load boards.
For-hire freight tonnage grew 2.7% in 2012, which barely exceeded GDP
growth of 2.2%. In 2011, by contrast, spot market loads expanded by 36%,
tonnage increased 5.7% and GDP rose 1.8% compared to the previous year.
Rates also remained stable on the spot market, rising only 0.9% including the
fuel surcharge. A 3.8% increase in 2012 contract rates appears to be a delayed
response to factors that drove spot market rates up in the previous year.
Carriers’ costs rose faster than rates. Fuel prices rose a modest 3.1% in 2012,
compared to 2011, and compliance costs for the FMCSA’s CSA safety program
were not as dramatic as feared. New government regulations, including the
MAP-21 Highway Bill and CARB environmental rules in California, were not
fully implemented in 2012. The main impact on cost during the year was limited
to California-based carriers with older-model reefer units. Nevertheless, rates
were even slower to increase, and they did not keep pace with costs or inflation.
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Survey respondents, by company type
logistics provider
(3pl)
8%
Broker agent
4%
Freight forwarder
2%
Non- asset broker
66%
Asset- based broker
20%
How we surveyed
The Sixth Annual DAT Broker Benchmark Survey drew 270 responses from
DAT freight intermediary customers. They filled out an online questionnaire,
anonymously providing detailed information about their company operations
and financial performance in 2012. This report is based on the responses of nonasset-based brokers, unless otherwise noted.
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Call 800.547.5417 or visit DAT.com
©2012 TransCore DAT. All rights reserved. All trademarks are the property of their respective owners. 06172012