Truckers shifting away from brokers: TCP

NASHVILLE, Ind. – As capacity continues to tighten, carriers are increasingly moving away from broker services, according to a new survey by Transport Capital Partners.

TCP found that 87 percent of carriers report using broker less in the past three months.

"This is a dramatic turn around since May of 2009 when two-thirds reported using more brokers," noted Richard Mikes, TCP partner.

"Obviously the freight supply demand balance has shifted dramatically to the carriers, and they are using their capacity to serve the needs of their long term customers."

Even though smaller carriers (under $25 million) rely more on broker freight, they too reported less usage of the same magnitude, added TCP’s Lana Batts.

The duo noted that publicly traded brokers carriers achieve gross margins of 15 to 20 percent, reducing what the carriers get for loads hauled for brokers.

The survey found that 40 percent of the carriers report that broker freight services account for less than 5 of their revenues and that 35 percent report 6-15 percent of their revenues from brokers.

Only a quarter of carriers rely on brokers for over 16 percent of their revenues.

"This reflects the traditional reliance on brokers by smaller carriers for return hauls as their outbound length of haul increases and improved technology such as electronic load boards on cell phones, and laptops are available," Batts said.

Both Mikes and Batts envision a potential shift over time to even a more direct connection between carriers, shippers and brokers with the advent of real-time electronic bidding on loads by prequalified carriers.


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