Freight brokers’ margins shrink in ’08: Survey

SAN ANTONIO, Tex. — Freight brokers haven’t had any easier of a time navigating rough economic waters than their over-the-road clients, it seems.

Truck communications provider TransCore released its second annual Broker Benchmark Survey, which show gross margins declined for freight brokers in 2008 as a result of volatile market conditions.

Almost 500 freight brokerage companies and third-party logistics providers completed the survey, which asked about company operations, revenues, margins and sources of business.

Survey respondents reported that profit margins averaged 15.8 percent, a 5 percent decline from last year’s average of 16.6 percent, TransCore says.

About 30 percent of brokers indicated that the turbulent business environment had not changed their business practices in 2008.

Just over 30 percent cut costs, 30 percent cut jobs, and 13 percent did both.

Some companies added sales people or agents, improved operational efficiency, tightened credit controls and/or enhanced customer service.

Broker-carriers were more likely to resort to layoffs, while non-asset-based brokers were more likely to continue current practices, cut costs or add sales personnel, the survey found.

 

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