As an owner-operator, you get the benefit of being your own boss. But you probably also deal with many challenges throughout the day, delivering freight from one place to another. Finding time to search the load boards for the best-paying jobs can be tough between delivering cargo and managing budgets and schedules.
Many owner-operators use brokers and dispatch services that act as intermediaries between carriers and shippers to help keep their truck filled with freight when moving between jobs. Although both freight brokers and freight dispatchers help you find work, it’s important to understand the differences between them and which is the most beneficial for you.
What is the difference between a freight broker vs. dispatcher?
What is a freight dispatcher?
A freight dispatcher represents your trucking company in negotiating freight. They find new customers, book new loads, and manage delivery schedules for you. Many trucking dispatchers will also take care of back-office tasks, from customer support to billing and payment collections, and even maintaining motor carrier compliance.
Dispatchers also help you plan efficient driving routes based on traffic congestion or weather delays while you’re on the road. Above all, a good dispatch service will consistently work toward maximizing mileage and minimizing empty-load hours to increase your profitability.
A freight broker offers services to both motor carriers and shippers, but they don’t represent them. Instead, they operate as a middleman between the two. Broker agents help shippers find carriers like you for their freight and earn a commission from both of you for their efforts. The freight agents book their profit by negotiating different rates for you and shippers. The higher the difference in rates, the greater their commission. As a result, brokers often negotiate for high pay rates with shippers and low rates with carriers.
If you’re just starting out, it’s important to have good negotiation skills when working with brokers to avoid falling into loads that leave too little profit for you. In many cases, brokers also charge additional fees for faster payment. But this isn’t always the case. Brokers are also valuable for finding loads to help you avoid deadheading. Maintaining a relationship with a good broker can help you land consistent, well-paying work.
Should you use a freight dispatcher?
Whether you should use freight dispatch service or not is an important decision that depends on multiple factors. The right freight dispatcher can improve your profits, but the wrong one could put you out of business entirely. Many owner-operators hire an in-house person or have their wives take care of dispatching and other back-office operations.
However, using a freight dispatch service makes the most sense if you’re struggling to manage the ins and outs of back-office operations. Freight dispatchers are also helpful when you’re starting as a trucking company and don’t have enough loads to haul.
Dispatchers can also take care of your customer relationships by consistently communicating their freight status and resolving other issues so you can focus on the road. If handling paperwork and billing and compliance isn’t your thing, a freight dispatcher can also handle that for an additional fee.
It’s just as important, though, to know that a truck dispatcher often works with brokers and load boards to find freight for you. So, you’re working with both the dispatcher and a broker to fill your truck with cargo.
How do freight dispatchers get paid?
For dispatchers, the volume is key to making more money. By booking as many loads as possible for the owner-operators like you, they keep your trucks moving and increase their revenue. A good freight dispatcher will get familiar with your lane preferences, rig specifications, and freight rates. Then they’ll approach shippers or freight brokers and negotiate loads and freight rates on your behalf.
In most cases, dispatchers take a percentage off of your negotiated rate. But many also charge a flat fee per load along with additional charges for other services. Make sure to get clarity on the fees before you sign a contract with a dispatcher of your choice.
How do dispatchers find loads?
Freight dispatchers usually work with brokers or scout load boards to find freight. However, many dispatchers also represent shippers directly to book loads for you.
How to choose a freight dispatcher
If you’re planning to use a freight dispatch service for your trucking company, here are some of the points you should consider when comparing dispatchers.
Ask for recommendations.
While you may refer to online reviews to find a good freight dispatcher for your trucking business, the chances are that these reviews may be paid or generated by bots. These reviews may not necessarily help you find the right dispatcher. Instead, a good starting point is to get recommendations from your friends and other owner-operators in your area.
Ask which dispatch service they use and how their experience has been. Try to get specific feedback on the things you care about most in a freight dispatcher, like what they charge and any additional services they offer to manage your back-office tasks. In many cases, a reputed freight dispatcher may charge a higher commission fee on the load. However, it is still worth it as a late delivery caused due to a dispatcher will likely cost you more.
Make sure the dispatcher can provide the services you need.
Once you have a list of potential freight dispatchers, the next step is to determine what you need to manage your trucking company efficiently. Prepare a detailed list of tasks that you would want your dispatcher to handle and things you want to manage yourself. Then make a comparison list to see which ones meet most of your requirements. Though it may cost more, choosing a dispatcher to manage everything on your wish list may save in the long run since whatever you skip will eventually be your responsibility.
Understand all the costs.
Before freezing your freight rates with the freight dispatcher, consider all the costs involved, including the cost of hauling the load as well as your dispatcher’s fees. Whether your dispatcher is charging a flat rate per load or taking a percentage off of your negotiated rate, calculate the required minimum load that will cover all your expenses. Provide these load details to your dispatcher so they can focus on finding the most profitable jobs for you.
Make sure to confirm the freight dispatchers you’re considering offer insurance and review the policy carefully. A good dispatching firm will offer insurance coverage while you’re hauling the load. But, remember that the coverage will end when you disconnect the load. You should get additional coverage, such as non-trucking and occupational accident policies, to protect you and your equipment even during empty-load hours.
Use load boards to quickly find freight.
Use the Truckstop.com Load Board to find better loads faster. As an owner-operator, you get access to a high volume of well-paying loads and can partner with vetted brokers, negotiate rates, and book your loads instantly. Our tools keep you on the road and in the money from our Factoring solution for faster pay to a transportation management system (TMS) that cuts down on paperwork.