The Shipping Rush Pushes Freight Broker Profits Forward

freight broker profits

The freight brokerage business comes with a slew of opportunities, especially given the increase in demand for shipping services between retailers, manufacturers, and customers. However, over the last year, the influx of technology has put a damper on the optimism of the freight brokerage community, with experts citing a slowdown in business potential thanks to advances in freight operations. Although there are some obstacles to overcome for licensed freight brokers in today’s environment, plenty of prospects still exist. This reality can be seen clearly in the most recent brokerage profit reports, highlighting an upward trajectory of growth among the world’s best freight brokers.

Significant Profits Across the Board

The last quarter of 2017 showcased the growing revenues of intermediaries operating in the transportation and logistics space, with the leading brokerage firms reporting significant gains year over year. For instance, Echo Global Logistics reported a net revenue increase of more than 34% for the last quarter of the year, as well as an overall revenue increase of 34.6% from the year prior. Similarly, XPO Logistics shared a 33% increase in fourth quarter freight increase in brokerage earnings, far above its 14.1% rise in overall revenue for the same time period. These heavy hitters in freight brokerage operations correlate the steady rise in profits to several external components, even despite a looming threat of technology in the industry.

Leaders at both Echo and XPO share that a tight market environment is fueling growth across the board, along with a strong demand for shipping through multiple channels. The pressure on retailers and manufacturers is leading them to seek out licensed and bonded freight brokerage intermediaries to keep up with high demand from customers, which paves the way for increased revenue in the industry. While the fourth quarter numbers for freight brokerage companies show vast improvement over 2016 and early 2017 earnings, freight brokers of all shapes and sizes must remain diligent in managing aspects of the business if they want to remain profitable in the future.

What Freight Brokers Can Expect Moving Forward

The rise in freight broker revenues for the end of 2017 comes at a time when the market is experiencing a wide range of changes both internally and externally. More significant compliance and regulatory pressures are being handed down to carriers while transportation costs continue their steady climb. Additionally, technology companies are rapidly developing new systems and platforms that lead some to believe that freight brokers may be an unnecessary aspect of doing business in the very near future. These changes in the tide of brokerage operations must be met with acceptance, along with a plan for achieving continued success as transportation and logistics shift in the coming years.

Freight brokers can stake their claim on a portion of market share by embracing the changes to come in a proactive manner. Adding the appropriate technology to manage freight brokerage operations and compliance requirements is a must, as is strengthening relationships with current and prospective customers in the field. There is no telling how successful the shifts currently taking place in the shipping business will be over time, but freight brokers big and small should focus their energy on evolving to meet the demands of the industry today.

Author:

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

1 Comment on "The Shipping Rush Pushes Freight Broker Profits Forward"

  1. Daniel Faircloth | December 8, 2018 at 12:18 am | Reply

    For several years I dispatched 10-100 trucks pulling dump trailers although it was very much a hard way to live but I really enjoyed it .I retired a few years ago .retirement isn’t all I thought is was. I am ready to get back to enjoying life more than I am at this point of time.

Leave a comment

Your email address will not be published.


*


shares