Freight Broker Revenue Grows 17.1%

A freight broker is an individual or company that serves as a liaison between another individual or company that needs shipping services and an authorized motor carrier. Though a freight broker plays an important role in the movement of cargo, the broker doesn’t function as a shipper or a carrier. Instead, a freight broker works to determine the needs of a shipper and connects that shipper with a carrier willing to transport the items at an acceptable price.

Freight brokers increased their revenue 17.1 percent in the first quarter from the same period a year ago as the third-party logistics companies expanded fastest in business beyond their core truckload sales, according to an industry report.

The Transportation Intermediaries Association said the shipment count in its quarterly survey of 3PLs increased 7.4 percent in the first three months of the year but that the overall profit margin for the brokers slipped back to 14.9 percent from 15.3 percent a year ago.

But revenue per shipment grew at a sharp rate, including 10.3 percent growth in truckload business, a sign of tight capacity in a growing market at the start of 2011.

The strongest shipment growth came in less-than-truckload arena, which soared 24.5 percent over last year, and brokered intermodal shipments jumped 11.7 percent in the first quarter. Truckload shipments, which bring 3PLs some 98 percent of their operating revenue, grew 5.3 percent.

“The report indicates that 3PLs expanded their services into intermodal and LTL to meet customer needs,” said TIA President and CEO Robert Voltmann.