February 29, 2016 5:00 PM, EST
Fourth-Quarter Profit Margin Improves for Brokers, TIA Says

The Transportation Intermediaries Association’s fourth-quarter business activity report showed continued improvement in brokers’ profit margin on a year-over-year basis.

The trade group’s benchmarking report showed that profit margin on average improved 2.4 percentage points to 16% for truckload shipments, which accounted for 70% of cargo moves.

The increased profit margin in truckload was the eighth consecutive year-over-year improvement and the highest margin achieved during that period. A 32% decline in fuel prices helped to lower costs and enhance margins as shipments handled by participating brokers rose 8.5%.

The TIA report reinforces trends such as rising profit margins and smaller revenue per load that were cited last month by publicly traded logistics companies such as C.H. Robinson Worldwide and Echo Global Logistics.

TIA’s report on less-than-truckload brokerage also showed year-over-year margin improvement, which increased 1.6 percentage points. Intermodal freight profit margin was 0.5 percentage point better.

“The report contains rolling eight-quarter trends, fuel price comparisons, and allows 3PLs to see how the overall industry is performing as well as to compare their business to companies of a similar size,” the Alexandria, Virginia-based group’s statement said.

On a sequential basis, the fourth quarter showed margin improvement in the truckload and LTL business lines, and a drop of 0.2 percentage point for truck-rail moves. Shipments handled were 3.5% lower in the fourth quarter than in the third quarter.