Controlling back office costs helps offset compressed broker margins

Epay offers proven tools to help brokers increase profitability on every load and win more business

The ongoing freight recession has now plagued the market for longer than the COVID boom, but high-frequency data from FreightWaves SONAR suggests it might be coming to an end sooner rather than later. Brokers, however, should not expect a market turn to completely alleviate the downward pressure on their gross margin.

While the freight recession has had a negative impact on both brokers’ margins, and carrier linehauls, an explosion of automation and technology, along with an unprecedented number of well-capitalized, non-profit focused players in the brokerage space have also been a significant contributor to the downward pressure. The rapid introduction of new technologies has led to an environment where brokerages properly leveraging the technology to keep costs in check find themselves able to be more competitive in their bid process, without impacting profit.

This competitive environment will not revert back to previous years, even as the market rebounds. Instead of relying exclusively on the market to provide relief, brokers can proactively address their cost structure to protect themselves and offset this trend of decreasing gross margin. For most brokers, reducing operating costs will be the most effective, reliable and accessible way to do that.

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