Freight broker margin calculator
Enter what the shipper pays and what the carrier gets. You get your gross profit, margin and markup, plus the two numbers you need while negotiating: the most you can pay the carrier, and the rate to quote the shipper, at your target margin. The numbers filled in are an illustrative example.
Your margin
Gross profit on this load
$375.00
- Margin (of shipper rate)
- 15%
- Markup (on cost)
- 17.6%
- Shipper rate / mile
- $3.13
- Carrier rate / mile
- $2.63
- Profit / mile
- $0.47
- Most you can pay the carrier for 18%
- $2,025.00
- Shipper quote for 18% at this carrier rate
- $2,591.46
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Freight broker margin formulas
- Gross profit = shipper rate − carrier rate − other load costs
- Margin = gross profit ÷ shipper rate
- Markup = gross profit ÷ (carrier rate + other costs)
- Most you can pay the carrier = shipper rate × (1 − target margin) − other costs
- Rate to quote the shipper = (carrier rate + other costs) ÷ (1 − target margin)
Worked example (the default numbers)
- The shipper pays $2,500.00. The carrier gets $2,100.00, and the load costs you another $25.00.
- Gross profit: $2,500.00 − $2,100.00 − $25.00 = $375.00.
- That is a 15% margin on the shipper rate, and a 17.6% markup on your cost.
- To reach an 18% margin, pay the carrier no more than $2,025.00, or quote the shipper $2,591.46.
Margin vs. markup: why it matters
If you add 18% on top of the carrier rate, you don't get an 18% margin. You get about 15%, because the margin is measured against the bigger shipper number. Pick one of the two, write it into how you quote and how you pay commissions, and use the matching formula every time.
Read more: Getting from quote to signed rate confirmation and Carrier onboarding checklist for brokers.
Frequently asked questions
How do freight brokers calculate margin?
Gross margin = (shipper rate − carrier rate − other load costs) ÷ shipper rate. On a $2,500 load paying the carrier $2,100 with $25 of other costs, the broker keeps $375, a 15% margin.
What is the difference between margin and markup?
Margin is profit as a share of what the shipper pays. Markup is profit as a share of what the load costs you. The same $375 on a $2,500 load is a 15% margin but a 17.6% markup, so be clear which one you mean when you set targets or pay commissions.
How much should I pay the carrier to hit my margin?
Maximum carrier rate = shipper rate × (1 − target margin) − other costs. Anything you negotiate below that number is extra margin; anything above it eats into your target.
How do I quote a shipper from a carrier rate?
Shipper rate = (carrier rate + other costs) ÷ (1 − target margin). Dividing, instead of adding the percentage on top, is what makes the result a true margin.
What is a good freight broker margin?
It depends on mode, lane, load size and how much work the load takes, so there is no single right number. Track your margin per load and per customer, and look hard at the ones that take the most work for the least profit.
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