Freight Broker? Freight Dispatcher? What’s The Difference? Why?
Often, we receive calls from individuals wishing to receive training for working as a freight, or sometimes called a truck, dispatcher. More times than not they have a friend that has seeded this idea, or they’ve come across a website that offers some type of freight dispatcher training. Either way, unless you are going to be employed (drawing a salary) by a trucking company, it’s not a good idea.
Even if one is to be employed as a freight dispatcher for a trucking company, you wouldn’t need training as the trucking company would train you. Most dispatchers at a trucking company have been a former driver, have experience, some type of background in transportation, or just knew someone to get the job. There’s really no need to go to school to be a dispatcher.
For those that have the idea that they can contract their services to a trucking company as a “freelance” dispatcher, why?
A freelance dispatcher will usually contract to a trucking company for a percentage of the gross load. I’ve seen this percentage fall between 5 & 8%. Sounds good, right? Maybe, maybe not. I’ll explain.
Some believe that working as a freelance dispatcher they have all the money at their fingertips via the load board. They contract to a trucking company, sign up for a load board, and think all they need to do is find a load from a broker and dispatch to the truck. Hey, an easy commission. But why would a trucking company want to pay a broker fee plus a dispatcher fee to load their truck off a load board? They wouldn’t. At least not for long.
On the other hand, if a freelance dispatcher did the work to get their own customers, obtain their own loads, and put on their client’s trucks, that would be a great deal for a trucking company. But a lousy deal for the freelance dispatcher.
For example, one has a contract with a trucking company to work as a freelance dispatcher. They obtain a customer and that customer has a load and agrees to pay $2000. You dispatch this load to your trucking company client and you make 8% of the gross, or $160. At first glance that sounds pretty good.
But, and there’s always a but, what if the trucking company client, or clients, had no truck available to move the load? Well, you would have made $160. As a freelance dispatcher you can only load trucks with those trucking companies for which you are contracted. If they can’t haul it, game over.
If you had been a freight broker, this wouldn’t have been an issue as you could have brokered the load to any trucking company. So instead of just the 1, 2, or even 3 trucking companies you had under contract, you could have brokered the load to any of the thousands of trucking companies across the country.
Now, let’s talk about money. As a freelance dispatcher, working just as hard as a freight broker to obtain shippers, you would have cost yourself about the same amount of money that you made by placing the load on a client’s truck.
Now the argument can be made that a freelance dispatcher would have client trucks at their disposal. True, but that only works if a client truck is in the right place at the right time. If not, well you still have client trucks. The fact remains, that even if the planets lined up just perfectly, you still made half as much as you would, if working as a broker.
A freight broker is licensed to work with any legal trucking company. If that trucking company isn’t already contracted to work with that broker, they can be in just a few minutes. In contrast, a freelance dispatcher can only load trucks for a trucking company in which they are contracted.
Some might believe that working as a freelance dispatcher allows them to work around the need to obtain a broker license. It’s a work-around alright, not a very good one though.
They could contract to an existing broker as an agent. As an agent they would still make more money, plus have an unlimited number of trucking companies in which to work. No need to obtain a license, bond, or anything as the broker agent would be working under that broker’s license.
Thought this little tidbit might be of use to some as we’ve seen a lot of dispatch training popping up around the internet. For those wishing to work at a trucking company as a dispatcher, don’t pay someone for training! Just fill out an application with a trucking company. It’s really that simple.
Thanks, and talk soon…