Tag Archives: shipping

Freight Brokers Moved 16% More Loads in 2017

Revenue rose steadily throughout 2017 for freight brokers in the DAT Keypoint benchmark project. The benchmark report draws data from 100 companies whose average annual revenue of $19.5 million grew 26% compared to 2016.

The revenue increase was fueled by 16% increases in both the number of loads and the total revenue per load. Rates rose rapidly during the year, contributing to the revenue increase. However, gross margins for the group dropped to an average of 13.7% from 14.8% in 2016, as costs increased faster than billings.

Total profit for the year also declined 11% compared to 2016, due largely to a few challenging months when expenses rose faster than revenues. Also, brokers tended to postpone profits from December to January, to take advantage of this year’s more favorable tax laws. That made December seem less profitable for the group, which had a big impact on quarterly results.

A Challenging but Successful Year, in Graphs

The selection of graphs below tell the story of a challenging but successful year. Brokers moved more loads in 2017, with higher revenue per load and higher revenue per employee. Costs rose faster than revenues, however, reducing profitability in some months and paring down gross margins for the year. The cost increase was associated primarily with rising spot market rates. Labor costs also grew throughout 2017.

Labor costs rose to 66% of net revenue in Q4 2016 and stayed in the 65% to 67% range for all of 2017. During the same period, non-labor expense declined from 29% to 22% as a portion of net revenue. The combination of the two put a squeeze on net operating profits, beginning in the fourth quarter of 2016, until profitability rebounded for the group in the second half of 2017.

 

Costs began to climb in Q4 2016, with labor expense leading non-labor expense, as brokerage companies in the group prepared to handle the revenue growth to come.

 

Revenue per employee held steady from Q4 2016 through Q2 2017, but average profit declined on a per-employee basis. The brokerages increased headcount during that period, to position their companies for additional growth.

 

Load counts increased 16% in 2017, including a 22% increase in the fourth quarter, compared to 2016. Steady, quarter-over-quarter growth in load counts began in Q1 2016 and accelerated in Q2 2017.

 

Revenue per load increased steadily in 2017, on both a year-over-year and a quarter-over-quarter basis, rising from an average of $1,226 per load in Q1 to $1,549 in Q4. Profits lagged during the period from Q4 2016 through Q2 2017, however, due to increased costs. From a $4.63 profit per load in Q1, the group’s average results improved to $22.42 per load in Q4. Profitability would likely have been higher in Q4, but many brokers moved profits to the new tax year. 

 

Rapid increases in spot market freight rates led to margin compression for many freight brokers in 2017. Gross margins fell to 11% in January, due to extreme weather, then declined again to 13% from May through June, as rates began to rise sharply.

The DAT Broker Benchmark project analyzes revenues, expenses and profits, based on more than 25 key performance indicators available in DAT Keypoint, the transportation management system developed exclusively for freight brokers.

Story by Steve Blair at dat.com

Walmart could give online shoppers final OK on produce

A system patented by Walmart aims to address one of the top drawbacks for would-be online shoppers: the desire to pick their own produce.

The “Fresh Online Experience,” a process Walmart outlined in a patent published Dec. 28, would allow consumers to remotely approve or reject specific produce items prepared for online orders. The service could be used for other fresh items as well.

When placing an order, consumers could select which items to confirm. Once two-dimensional or three-dimensional photos of the produce have been sent, the consumer has a set amount of time to approve or reject the items.

Walmart explained its rationale for the system — for which fulfillment could be manual or automated — in the background section of patent.

“A customer when visiting a retail store can inspect and choose produce that seems to look like the highest quality,” the company stated in the document. “However, a customer who orders the same item from a retail store website for grocery pickup and/or delivery has to rely on the store associate to choose the actual item to be delivered. They may be dissatisfied with the result.

“It is desirable for the customer to be able to request images of the item in the retail store, so that the customer can be satisfied with their online purchase,” Walmart stated.

The company has patented numerous other ideas over the years that have not been deployed. E-commerce, however, has been a major area of growth for Walmart, and inability to inspect produce and other fresh item is one of the most cited reasons people give for not grocery shopping online.

Story by Ashley Nickle at Thepacker.com

REEDTMS PRESENTS ITS THIRD ANNUAL CARRIER AWARDS

Tampa, Fla. (Jan. 17, 2018) – ReedTMS, a leading asset-based third party logistics provider announced its third annual carrier awards today. ReedTMS Logistics prides itself on successfully meeting and exceeding customer requirements and credits its success in large part due to the relationships it has built with a diverse group of carriers. Two decades of experience has helped to transform ReedTMS from a small startup venture to a leading organization within the logistics industry.

The following carriers are nominated by ReedTMS Logistics operations team members. Nominated service providers are then evaluated on a multitude of performance metrics that include: service quality and performance, on-time service, capacity and pricing, and overall commitment to the partnership.

  • The 2017 Flatbed Carrier of the year winner was presented to DP USA Trucking Inc
  • The 2017 Award of Excellence for Outstanding Flatbed Service was presented to JJB Logistics Inc
  • The 2017 Dry Van Carrier of the year was presented to R & R Elite Trucking
  • The 2017 Award of Excellence for Outstanding Dry Van Service was presented to  Bridgestone America’s Fleet Operations
  • The 2017 Refrigerated Van Service winner was presented to CALIFORNIA EXPRESS LINES LLC
  • The 2017 Award of Excellence for Outstanding Refrigerated Van Service was presented to Darngavil Enterprises LLC

“It brings us great pleasure to recognize some of our carrier partners who exemplify what it means to go above and beyond in an industry as diverse as ours,” said Jason Reed, CEO of ReedTMS Logistics. “The continued success of our business is reliant on great relationships like the ones we have forged with these terrific companies.”

ReedTMS Logistics supports its more than 25,000 carriers with high volume and quality truck loads, timely payment, an in-depth understanding of their business, ease of doing business and most importantly a customer-centric operations staff.

    

About ReedTMS Logistics
Established in 2010, ReedTMS Logistics is an asset-based third-party logistics provider compromised of Reed Transport Services, Inc. and TMS Logistics, Inc. The two companies offer a wide array of transportation services to customers throughout the United States, Canada and Mexico. Headquartered in Tampa, Fla. with offices in Cedar Grove, Wisconsin and Ashland, Ohio. Founded in 1996, Reed Transport offers high-quality brokerage and freight management services. Founded in 1997, TMS Logistics is a multimode carrier specializing in dry van, dedicated fleet services. For more information, visit www.ReedTMS.com

FedEx Indicted for Role in Distributing Prescription Drugs

Prosecutors claim the federal government warned FedEx about drug distribution at least six times.

A federal grand jury indicted shipping company FedEx Thursday on charges of shipping prescription drugs for illegal online pharmacies.

Prosecutors say that Congress, the Drug Enforcement Administration and other federal agencies warned FedEx for nearly a decade that their shipping services were being used to illegally distribute drugs like oxycodone and hydrocodone. However, prosecutors say, the largest cargo company in the world ignored the notices.

FedEx allegedly “departed from its usual business practices” to allow the drug trade to continue. FexEx, according to the indictment, was aware of two major illegal online pharmacies—the Chhabra-Smoley organization and Superior Drugs. Top managers at FedEx allegedly approved these practices.
Fedex
“The advent of Internet pharmacies allowed the cheap and easy distribution of massive amounts of illegal prescription drugs to every corner of the United States, while allowing perpetrators to conceal their identities through the anonymity the Internet provides,” said U.S. Attorney Melinda Haag in a statement Thursday. “This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior.”

FedEx said they would fight the charges.

“FedEx is innocent of the charges brought today by the Department of Justice,” said Patrick Fitzgerald, FedEx’s senior vice president of marketing and communications, in a statement. “We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees.”

Story from TIME.com