One of the most important decisions that any owner-operator must make is whether to use a dispatch service to find loads or rely on self-dispatching. There is no universally correct answer to that question, and many different factors can make either choice the correct choice.
The most important factor to consider when making your decision is most likely cost. Dispatchers are typically paid a percentage of their earnings for each load they locate. Some dispatchers charge a flat rate (for example, $50 per load), but the majority of higher-quality dispatch services charge an average of 5-10% for each load. That can quickly add up, especially if you’re a small business.
This article will look at the benefits and drawbacks of using a dispatcher versus attempting to self-dispatch for owner-operators. It will include:
- What Do Owner Operator Dispatch Services Do?
- How Do Dispatchers Acquire Loads?
- Should Independent Contractors Use a Truck Dispatch Service?
- As an Owner-Operator, how do you self-dispatch?
- When Is It Appropriate to Self-Dispatch?
- How to Select the Best Owner-Operator Dispatch Service or Load Board
- Making the Best Decision for Your Business
What Do Owner-Operator Dispatch Services Do?
A truck dispatch service’s primary function is to manage freight on behalf of owner-operators or carriers. A dispatcher’s responsibilities include locating loads, connecting with brokers, negotiating, and eventually dispatching drivers and setting up their routes. Dispatchers may also assist with back-office tasks such as reviewing truck drivers’ logs and tracking their hours. The best dispatchers may go above and beyond, assisting you with motor carrier compliance, managing delays, improving relationships with shippers, and other tasks. Dispatchers take a percentage of your earnings for each load they find in exchange for these services.
It’s critical to understand that freight dispatchers and brokers are not the same things. A freight broker is a legal entity that acts as a go-between for the manufacturer or shipper (who requires their freight to be moved) and the carrier (who can move that freight). The freight broker is legally permitted to represent both the carrier and the shipper at the same time, but they should never have a personal stake in either. The dispatcher, on the other hand, is directly associated with a carrier and works solely for their benefit. Indeed, dispatchers are not permitted by law to represent manufacturers or shippers.
How Do Dispatchers Acquire Loads?
A freight dispatcher’s goal is to find high-quality, relevant loads for their clients. Once you’ve signed an owner-operator dispatcher contract, it’s up to the dispatcher to learn about your operation and which loads are best suited to your needs. Some dispatchers will look for loads through personal connections. Alternatively, in many cases, they will use load boards to locate freight for you. That’s right: professional dispatchers, like anyone else who self-dispatches, use load boards to find the right freight.
In fact, freight dispatchers frequently use the same load boards that a single owner-operator has access to. Dispatchers use those boards in the same way, either posting their clients’ trucks and letting the system find a match or search. To search, all they have to do is enter information about the truck they are looking for, such as the type, any special features it may have, and the lanes, origin, and destination.
Should Independent Contractors Use a Truck Dispatch Service?
Clearly, there are advantages and disadvantages to using a truck dispatch service. The main disadvantage is the price. You’re giving someone else a sizable portion of your earnings in exchange for them performing a function that you could theoretically perform on your own.
On the other hand, not having to worry about finding loads yourself can free up your time on the road. That means you could end up delivering more loads and earning more money than if you tried to self-distribute without a quality system in place. Furthermore, the best truck dispatchers typically have strong negotiating skills and enter conversations with brokers well-versed in specific lanes and markets. Because a higher rate benefits both you and them, freight dispatchers frequently end up negotiating better rates for loads than individual owner-operators can get on their own.
At the same time, a common misconception about dispatch services is that dispatchers can find loads that you wouldn’t be able to find on your own. In most cases, this is not the case. They have access to the same loads that you could find on your own because they frequently use the same load boards as everyone else. The only difference is that they can spend all day searching for load boards, whereas an owner-operator must also spend time on the road.
Aside from saving you time and potentially securing you better rates, good freight dispatchers frequently offer additional services that can help owner-operators run their businesses — especially when they’re just getting started. They can, for example, assist with:
- Maintain motor carrier compliance at all times.
- Manage shipper relationships and deal with any issues that may arise.
- Navigate unexpected roadblocks while on the road.
- Handle back-office responsibilities such as paperwork, billing, and collections.
In short, using a dispatch service can be a good idea if you’re willing to give up some of your earnings on each load you deliver. If you prefer to keep your entire earnings, self-dispatching is probably a better option for you.
As an Owner-Operator, how do you self-dispatch?
Finding loads as an owner-operator entails following the same procedure as a dispatcher, with the exception that, unlike a dispatcher, you are looking for loads for yourself. To do so, you’ll need a load board that allows you to easily post your truck and search for loads. Every business day, thousands of loads should be posted on your load board, so there’s always something new to choose from. DAT is one load board that meets all of these requirements and more.
When you self-dispatch with a reputable load board like DAT, you do not only gain access to the world’s largest freight marketplace, but you also have the ability to ensure you never miss the perfect load. Freight dispatchers may try to convince you that the only way to find loads is to spend all day on a load board, but with DAT, you can set alerts to be notified whenever a load matching your search criteria appears. This allows you to spend more time behind the wheel without having to worry about missing loads.
A good load board will also provide you with the information you need to negotiate with brokers. DAT’s load boards, for example, provide data on specific lanes and market rates for each load based on thousands of real-world transactions that occur on their website. That means you can always go into your negotiations prepared with the information you need to get the best possible rates.
When Is It Appropriate to Self-Dispatch?
Self-dispatching isn’t for everyone, but for many small business owners, it’s the best option. To self-dispatch, you must be willing to spend time looking for freight on a regular basis. You must also be self-assured enough to negotiate with brokers.
If you choose to self-dispatch, you will save money because you will not have to pay a dispatcher a percentage of your earnings. Self-dispatching also allows you to develop your own relationships with shippers and manufacturers, which can be extremely beneficial when it comes to expanding your business. Even better, self-dispatching allows you to have complete control over your business. Given that many owner-operators start their own businesses in order to gain control over their work, giving someone else the authority to find your loads may appear counterproductive.
How to Select the Most Appropriate Owner-Operator Dispatch Service or Load Board
There is no better choice than DAT when it comes to selecting the right load board. With DAT, you gain access to the industry’s largest freight marketplace, as well as quality customer service that will ensure you are supported as you learn to navigate the load board.
Things become a little more complicated when it comes to selecting a dispatcher. There is no universally agreed-upon best dispatch service, so you’ll have to do some research to find the best option for you.
The first step is to make a list of the specific services you require from your freight dispatcher. Are you simply looking for assistance in locating loads? Do you also need assistance with building customer relationships and managing back-office tasks? Knowing what you’re looking for will put you in a good position to begin your search.
Following that, you should begin seeking recommendations from people you trust. Discuss with your peers which dispatch services they use. You should also look for online reviews from real users. This can help you determine whether a dispatch company truly provides everything you’re looking for.
Finally, and most importantly, you must consider the cost. What is the dispatch service fee per load? Can you handle that amount, on top of all the other expenses that come with running a business? Is there a bare minimum you can charge per load to cover all of those accumulated costs? You must have those numbers ready before speaking with a dispatch service in order to avoid signing a contract that is not in your best interests.
Making the Best Decision for Your Company
Finally, the decision to self-dispatch or use a dispatch service is a personal one for each owner-operator. The most important thing to remember is that it all comes down to finding the right fit. If you hire a dispatch service, you must ensure that the dispatcher’s model will work for you.
