According to Transportation topics in association with Armstrong and associates, in a 2022 article listing the top 100 brokers by revenue, some of which are estimated, the top 100 brokers took in $78.9 Billion and the top 100 brokers netted $12.8 Billion which is a 16% profit. Please remember that this does not account for the moneys spent on buildings, employees and all associated costs. Assume 10% and you are probably closer to 26% revenue loss to carriers.
By their own admission, TQL boasted 8.8B in revenue with a 2B net profit or PROFIT. Remember that this price is AFTER they pay each employee/agent, and all of the bills. Let's assume an additional 10% for these and we arrive at 32% profit. While this will not be true for every load, multiply your last 20 broker load rates by 1.32 and think about what SHOULD be.
This is the way that OODCCO views freight rates.
The shipper is paying x, lets call it $3000 to have their freight shipped from Michigan to South Carolina. This is loosely between $3-$4 per mile.
Why does the carrier need the SHIPPERS freight rate?
- To cover expenses associated with deadheading to get the freight.
- To cover the actual transportation, fuel. DEF & tolls
- Employee Pay
- Truck and trailer payment
- Truck and trailer insurance
- Highway Use Taxes (HUT).
- Fuel taxes (IFTA)
- Employee insurance
- Equipment maintenance
- Tires ($300 - $800 per tire approx 18 per year)
- Windshields (1 per year)
- Radiator .3 per year $2,000
- Brakes once per position yearly $150
- Bumpers
- Paint
- Electrical repairs.
- Damage to equipment caused by freight.
- Driver negligence
- Lost revenue as a result of down time as a result of equipment maintenance.
- Lawsuits resulting from freight claims or accidents
When the broker takes 12 %- 50% they are taking the money that would be in the carriers pockets to cover everything below #8 because 1-8 are absolutely essentiel to moving the freight from point A to B. The money kept by brokers is the money that SHOULD be paying for tires, windshields repairs and much more.
Brokers keeps carriers in of very close to operating at a loss. This should not be allowed by carriers.