What is the difference between gross margin and net margin on a load?

Gross margin is shipper revenue minus carrier pay. Net margin further subtracts per-load overhead like factoring fees, insurance, and dispatch cost. Net margin is what actually lands in the brokerage after a load settles.

Should the fuel surcharge be included in revenue?

Yes. The fuel surcharge billed to the shipper is part of total revenue. If you pass most of it to the carrier, include that in carrier pay. The tool sums both linehaul and surcharge into total revenue.

Why use gross margin percent instead of just dollars?

Margin percent normalizes across load sizes so a 400 dollar margin on a 1600 dollar load (25 percent) is comparable to a 400 dollar margin on a 4000 dollar load (10 percent). Most brokerages target a gross margin percent floor.

What counts as per-load overhead?

Common per-load overhead includes factoring or quick-pay discounts, cargo and contingent insurance allocation, dispatch software cost per load, and a share of fixed office overhead. Enter your blended per-load figure.

Is a negative margin always a bad load?

Usually, but not always. Brokers sometimes accept a thin or negative margin to keep a lane, a customer, or a carrier relationship. The tool simply shows the math so the decision is informed rather than accidental.

What is the Freight Broker Margin Calculator?

Subtract carrier pay from shipper-paid linehaul plus fuel surcharge, deduct per-load overhead, and get gross margin dollars, gross margin percent, and net margin after brokerage overhead. Built for freight brokers and 3PLs pricing loads daily. It runs free in your browser on Gera Tools, with nothing uploaded.

Freight Broker Margin Calculator

Name: Freight Broker Margin Calculator
Creator: Gera Tools
License: https://creativecommons.org/licenses/by/4.0/

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Freight brokers and 3PLs live or die on margin per load. This calculator separates shipper-paid revenue from carrier cost and per-load overhead so you can see gross margin dollars, gross margin percent, and the net margin that actually reaches the brokerage after a load settles.

How it works

The math is straightforward but easy to get wrong under pressure on a phone:

Total revenue = shipper linehaul + shipper fuel surcharge
Total carrier cost = carrier pay (all-in to the truck)
Gross margin (dollars) = total revenue minus total carrier cost
Gross margin (percent) = gross margin divided by total revenue, times 100
Net margin (dollars) = gross margin minus per-load overhead

Margin percent is always taken against total revenue, which is the industry convention. Dividing by revenue (not by carrier cost) keeps the figure between 0 and 100 percent for normal loads and makes it comparable across load sizes.

Example

A shipper pays 1800 linehaul plus a 200 fuel surcharge, total revenue 2000. The carrier is paid 1500 all-in. Gross margin is 2000 - 1500 = 500, or 25%. With 60 of per-load overhead (factoring plus insurance), net margin is 500 - 60 = 440. That 440 is the real contribution from this load.

Why both gross and net margin matter

Gross margin tells you how well you priced the load against the carrier. Net margin tells you how much the load actually contributed to the brokerage after all variable costs. A load can look attractive at 20% gross but become a loss once you account for factoring fees on both the shipper invoice and the carrier quick-pay, insurance, and TMS cost per load.

Tracking both figures lane by lane and customer by customer reveals which parts of your book are genuinely profitable and which are subsidising capacity for relationships.

What goes into per-load overhead

Per-load overhead varies by brokerage but typically includes:

Factoring / quick-pay discount: If you factor receivables, the factor’s fee (usually 1–5% of invoice) comes out of each load. If you offer carriers quick-pay without factoring, include the cost of that capital.
Cargo insurance: Many brokers carry contingent cargo coverage. Allocate the monthly premium across loads to get a per-load figure.
TMS / technology cost: Software subscription costs divided by monthly load count gives a per-load allocation.
Dispatch and broker rep commission: If reps earn a split on margin, build that into overhead or track it separately.

Enter a realistic blended figure so the net margin output reflects what the brokerage actually keeps.

Tips for daily use

Know your break-even net margin floor — the minimum per load your cost structure requires — and treat any load below it as a relationship decision, not a business decision.
A high gross margin percent on a $500 load may contribute less in real dollars than a modest percent on a $3,000 load. Always check both the percent and the dollar columns.
If you quick-pay carriers at a discount, include that discount in carrier cost — the carrier effectively receives the full amount and you absorb the financing cost.
On spot loads, run this calculator before you commit to a price, not after. The fuel surcharge the shipper pays is part of your revenue and should factor into the margin you quote.