How are Freight Brokers Staying Afloat?

Trying on the surprising December 2025 metrics, we couldn’t assist however marvel how brokers are surviving. Whereas, by nearly any surface-level metric, freight brokerage volumes look wholesome. Hundreds are transferring. Capability is plentiful. Charges have stabilized off the underside. And but, throughout the business, dealer layoffs proceed, stability sheets stay underneath stress, and even well-run operators are quietly combating for survival.

The disconnect isn’t demand, it’s unit economics.

To grasp why brokerage profitability has grow to be so fragile, you must cease taking a look at gross margin percentages in isolation and begin taking a look at gross margin per load versus the true price to service that load. Whenever you do, the image turns into uncomfortably clear.

Contemplate a consultant mid-market, non-asset brokerage working in in the present day’s unfastened freight surroundings:

• Common income per load: $1,912

• Gross margin: 9.91%

• Gross margin per load: ~$189

• Annual income: $30 million

• Annual load quantity: ~15,700 masses

• Shippers pay in 40 days

• Carriers are paid in 30 days

• Value of capital: 7%

On paper, a ~10% margin seems workable. In observe, it isn’t.

At this scale, the brokerage employs roughly 20 folks — gross sales, provider reps, operations, management, finance and admin — with a completely loaded payroll of about $2.36 million. Unfold throughout the upper load depend required to generate $30 million at decrease income per load, payroll works out to roughly $150 per load.

Then come the unavoidable non-payroll prices:

• Transportation administration programs

• Load boards

• Market intelligence and knowledge instruments

• Insurance coverage, compliance, accounting, advertising and marketing, and overhead

These prices add one other ~$55 per load.

Earlier than factoring in financing prices, the brokerage is already spending about $205 per load to maneuver freight.

Towards $189 in gross margin, that’s a lack of roughly $16 per load — earlier than curiosity expense.

Now layer in money circulate timing.

Even with comparatively disciplined phrases — shippers paying in 40 days and carriers in 30 — the dealer is financing a 10-day money hole on $30 million in annual income. That ties up roughly $820,000 in working capital.

At a 7% rate of interest, that’s about $58,000 per 12 months, or ~$3.70 per load.

All in, the brokerage is dropping roughly $19 per load.

Scale that throughout practically 16,000 masses, and the result’s a six-figure annual loss — not as a result of the corporate is inefficient, however as a result of the pricing surroundings now not helps the associated fee construction most brokers carry.

That is the place many brokers make a deadly mistake: chasing quantity to “develop by means of it.”

Larger quantity does assist take in mounted overhead. Payroll and tech prices per load fall as load counts rise. However when gross margin per load stays flat, losses don’t disappear — they merely compound extra slowly.

That is the unfavorable working leverage lure. Each incremental load moved beneath the true break-even margin provides threat, consumes working capital, and erodes fairness, even when top-line income seems robust.

It’s additionally why many brokerages seem busy whereas concurrently burning money.

On this situation, the maths is unforgiving.

To cowl:

• ~$150 per load in payroll

• ~$55 per load in tech and overhead

• ~$4 per load in financing prices

A brokerage wants roughly $210–215 in gross margin per load simply to interrupt even.

At a $1,912 income per load, that means a minimal sustainable margin of ~11.3% — and that’s earlier than factoring in unhealthy debt, claims, margin volatility, or development funding.

This explains why so many brokers working within the 9–10% vary really feel fixed stress. They aren’t poorly run. They’re structurally under-margin.

A small subset of brokers can survive — and even develop — at margins that crush others. The distinction isn’t grit; it’s construction.

Extremely automated, digitally native brokerages:

• Carry far fewer carrier-facing staff per load

• Deal with exceptions, not each transaction

• Generate materially increased income per worker

• Scale operations sub-linearly as quantity grows

By lowering carrier-ops price per load by 40–50%, these brokers decrease their break-even margin meaningfully. Conventional, high-touch fashions merely don’t have that flexibility.

The present freight cycle hasn’t simply compressed margins — it has uncovered a long-standing mismatch between pricing expectations and value actuality. SONAR knowledge reveals clearly:

• Charges reset sooner than prices

• Capability stays plentiful

• Pricing energy is restricted

• Value of capital is increased than in previous cycles

Brokers aren’t struggling as a result of they misunderstand freight. They’re struggling as a result of margin per load now not clears the associated fee to serve.

The math now not works at prevailing margins.

Till pricing displays:

The business will proceed to see consolidation, quiet exits, and painful restructurings.

The lesson is easy, if uncomfortable:  In brokerage, margin per load is future.

And proper now, for a lot of, it isn’t excessive sufficient.

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