Descartes survey shows 70% still operating at 3% or better
profit margin A decline in freight volumes, geopolitical concerns and cost inflation were top of mind for
customs brokers and freight forwarders, according to Descartes’ eighth annual benchmark survey.

Of the 272 participants polled by the supply chain software-as-a-service provider, most noted that while overall freight demand has fallen, shipment sizes have continued to increase, albeit at a slower rate than last year.

Twenty-nine percent said shipments were more than 5% larger than last year while 25% said shipments were as much as 5% larger. The growth rates were up against tough comparisons as nearly 70% of respondents reported bigger shipment sizes in 2022.

No change in shipment size was seen by 29% of the group this year.

“Global logistics slowed considerably in the second half of 2022 and 2023 is shaping up to
look more like 2019’s volumes,” the report said.

The survey showed that scale matters as large-volume forwarders and brokers were 1.8
times more likely to be top financial performers than smaller outfits.

Declines in transportation prices weighed on margins. Top performers with a profit margin of 11% or better stood at 31% of respondents, only a 3-point decline from last year. Thirty-nine percent said they had a profit margin of at least 3% to 10%. Thirteen percent said they were operating at breakeven and 1% said they were losing money.

Two-thirds of the bottom performers, or those with less than a 3% profit margin, handle
fewer than 25,000 shipments annually.

The top concern among the group continued to be “global instability,” which half of respondents pointed to as a risk. Inflation was the second-biggest concern, according to 36% of those queried. Large companies were more concerned about geopolitical issues, while inflation was the biggest concern among bottom performers.