Economic Outlook for Freight Brokerages in 2023 (2024)

FAQs

What is the outlook for freight brokerage in 2023? ›

What is the Economic Outlook for Freight Brokerages in 2023? Strong but shaky is a good phrase to describe the economic outlook for freight brokerages in 2023. With more businesses emphasizing supply chain efficiency to ensure streamlined operations, demand for freight broker and 3PL solutions should remain strong.

The decline in transportation of goods from seaports and throughout the supply chain is expected to continue as consumer spending is forecast to drop at a 0.5% annualized rate in the second and third quarters of 2023. Less goods coming into the country means less loads to transport.

While the future of freight isn't guaranteed, several factors point to a positive outlook for freight brokers in 2024. As regulatory changes take place and fraud continues to evolve, brokers should adapt to a changing market, and safeguard their business against economic uncertainty.

In wrapping up, starting a Freight Broker Business can indeed be a promising venture if you're ready for the challenges and committed to understanding the marketplace. The possibilities for growth and profitability in the freight brokering sector are substantial, given the pivotal role it plays in global commerce.

So you might be wondering: is there a demand for freight brokers? Is there still a place for freight brokers in today's ever-changing environment? At Tallgrass Freight, we believe the answer is a resounding yes. The role of freight brokers in the trucking industry has grown dramatically since the early 2000s.

The Global Logistics market is anticipated to rise at a considerable rate during the forecast period, between 2024 and 2031. In 2023, the market is growing at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.

On average, the yearly freight broker salary in the U.S. is $71,500 ($36.67 per hour). Entry-level positions begin at $45,000 per year, while most experienced professionals earn up to $107,500 per year. As a freight broker, you can start your own trucking business and become your own boss.

Freight brokers make their money in the margin between the amount they charge each shipper (their customer) and what they pay the carrier (the truck driver) for every shipment. Although it varies from one transaction to the next, healthy freight brokers typically claim a net margin of 3-8 percent on each load.

How stressful is being a freight broker? ›

Brokering freight can be super stressful. We handle situations that require critical thinking, strategic moves, and a whole lot of knowledge. We're not just sitting around—we're constantly in touch with customers, shippers, consignees, dispatchers and drivers for multiple shipments all day.

Depending on your expertise, your salary range can be anywhere from 10% to 35% commission for each truckload. Ultimately, the average broker ends up getting margins of around 15%. This percentage is a portion of the total amount of money that customers give you. So, how much do freight brokers make?

Will trucking rates in 2023 increase or decrease? Without a doubt, trucking rates in 2023 have been lower. In the short term we see truckload rates decreasing. Clearly, the downtrend that began in the 3rd quarter of 2022 is still in play.

The US trucking industry experienced the late-cycle phase of the classic truckload cycle in 2022, leading us into the bottoming phase in early 2023. In October 2023, the rebalancing process continues slowly, though significant progress has been made.

Compared to the record-high 25.8% figure of just a year ago, the truckload index is projected to be 11.2% in Q1 2023 – an 11.6% year-over-year decline. Inflation-driven cost increases, relatively high fuel costs and shipper pricing power are expected to threaten truckload carrier profitability in 2023.

Consequently, 2023 concluded with an 11.3% increase in total air cargo capacity compared to 2022. The expansion in global air cargo capacity also resulted in a small drop in cargo load factors (month-on- month), closing the year at 44.0% on average.