What Margin Should an Auto Transport Broker Target?

Every broker wants a number to anchor to. Here is the one I use, where it comes from, and the reason you should never treat it as locked.

This is the question I get more than any other from brokers: what should my margin be? Everyone wants a clean percentage they can apply and stop thinking about. I understand the impulse, but the useful answer is a target you start from and adjust, not a rule you obey. Let me give you the target, then the judgment that goes around it.

The number I anchor to

Across my own book, carriers bought at roughly 65 percent of the customer price. That is about a 35 percent spread, and it is a reasonable default to start from on a normal lane. If you have no other information, build the quote so the carrier cost sits near 65 percent of what the customer pays, and you are in a sane place: above your cost, below retail, with room to negotiate.

That is the anchor. Now here is why you cannot just stamp it on every lane.

Why the target has to flex

Margin is the gap between two moving things: what the customer will pay and what a carrier will accept. The customer side is fairly stable. The carrier side is not. On a tight lane, an out-of-the-way pickup, a slow season, a route nobody wants to deadhead back from, the live carrier rate can climb above your target buy. If you priced the customer as though the carrier would take 65 percent, you have now sold a load you cannot cover at that number, and you either eat the difference or you fail to dispatch it.

So the target tells you where to aim. The live market tells you whether you can actually hit it. You set the customer price from your margin target, then you check the carrier side before you commit. When they disagree, the market wins, and you either raise the quote or accept a thinner spread on that specific lane with your eyes open.

Percentage or flat dollars?

A percentage is the right backbone because it scales with the lane. A flat dollar margin overprices cheap short lanes and underprices expensive long ones. But a pure percentage has a weakness at the bottom: on a very cheap lane, 35 percent might be too few dollars to be worth the work and the risk. So set a percentage target and pair it with a minimum dollar floor, so a small lane still has to clear an amount that makes booking it worthwhile. Percentage for the shape, dollar floor for the bottom.

Season and lane direction matter more than people admit

The same lane does not carry the same margin all year. Snowbird season into Florida, end-of-month dealer moves, and the classic imbalance where one direction is easy and the reverse is a fight all shift what a carrier will take. A broker pricing off last year's static number misses all of it. This is the real argument for re-pricing against current conditions rather than trusting a saved quote: not because your target changed, but because the carrier side under it did.

Where most margin leaks away

In practice, brokers rarely lose margin by setting the target too low. They lose it by never re-pricing. The old quote goes stale, diesel and capacity move, and the number that was a healthy 35 percent eighteen months ago is now thin or underwater, and nobody noticed. The margin discipline that matters most is not picking the perfect percentage, it is keeping every quote current so the spread you think you have is the spread you actually have.