Forwarding deals at a glance
- Typical buyers
- Global and regional forwarders, customs brokerages, third party logistics groups and private equity platforms
- What lifts the price
- Long standing shipper accounts, a niche such as perishables or Alaska freight, licensed customs brokers on staff
- What pulls it down
- Profits from one freight spike, a few accounts handled personally by the owner, thin net margins
- Paperwork buyers ask for
- Gross profit by customer and lane, carrier and agent agreements, licenses and bonds, claims history
- Watch for
- Licenses held by individuals that don't move with the company
Buyers Look at Gross Profit, Not Revenue
Freight revenue includes the cost of ocean, air and trucking you pass through. Buyers care about the gross profit you keep after paying carriers, broken down by customer and by lane.
Prepare at least three years of that breakdown. It shows which accounts are worth the most and how concentrated your business is.
Normal Years Versus Spike Years
Freight rates rose sharply a few years ago and then fell. A buyer will not pay a multiple on spike year profits. Expect them to average several years or to focus on the most recent normal one.
If your volume grew while rates fell, point that out. Volume growth is a better sign of a healthy book than rate driven profit.
Licenses, Bonds and People
Customs brokerage requires licensed brokers, and freight forwarding and ocean intermediary work has its own licensing and bonding. Buyers will check which licenses belong to the company and which belong to individuals.
If your licensed customs broker is you, plan for how that role will be covered after the sale.
Technology and Visibility
Shippers now expect online tracking and quick quotes. Buyers will ask what systems you use and whether customers depend on them.
A modern platform helps the deal. If you run on spreadsheets and email, be ready to explain how a buyer could move your accounts onto their system.
Short written summaries of how each major account was won, and who manages it day to day, help a buyer judge whether the relationships will last.
Agent Networks and Carrier Agreements
Overseas agent relationships and carrier contracts are part of what a buyer gets. List them, note which can be assigned, and which depend on a personal relationship.
Concentration matters too. If one importer provides a third of your gross profit, the buyer will want to meet them before closing.
Read how Seattle buyers value a company for the full method, and see the Washington filings section for what you will file at closing. To begin, use the price check form or call (206) 555-0171.