6th Annual Broker Benchmark Survey DAT 2013

Transcription

1 DAT Special report 6th Annual Broker Benchmark Survey DAT 2013

2 DAT special report 2 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 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 On a per-load basis, brokers received $1,219 in average revenue, up 1.8% from $1,197 in 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 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 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

3 DAT Special report 3 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.

4 DAT special report 4 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 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 by the Numbers 5.6 to 1 ratio of spot market loads to available trucks in 2012, down 11% from 6.3 in % 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 As in previous years, most brokerage firms paid all or part of their employees health insurance coverage in 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 * rates are a weighted average of broker buy rates for

5 DAT Special report 5 Context: Slow Growth in 2012 Spot market freight availability rose 7.6% in 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 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.

6 DAT special report 6 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 This report is based on the responses of nonasset-based brokers, unless otherwise noted. To learn more about DAT, Call or visit DAT.com 2012 TransCore DAT. All rights reserved. All trademarks are the property of their respective owners