Though many people will use the terms dispatcher and broker interchangeably, they are quite different. Both work as intermediaries between shippers and the trucking company.
What is a Freight Broker?
Freight brokering is when a broker agent works with both shipping companies and carriers and serve as the middle man. Many freight brokers pick up their profit by negotiating rates with shippers and negotiating a different rate with owner-operators. The difference between the two rates is the freight broker’s commission. As a result, freight brokers are motivated to encourage shippers to pay high rates while offering carriers a rate that helps them make a profit.
What is a Truck Dispatcher?
Dispatchers represent the carrier when negotiating freight. They take a percentage off the carrier’s negotiated rate, so they are motivated to find carriers high paying freight. The higher the rate they can find for the carrier, the more money they make. Good dispatchers will keep portfolios with their carrier’s lane preferences, desired freight rates, and equipment specifications. Using this information, the Dispatcher then contacts the shippers or freight broker on the carrier’s behalf to negotiate loads that meet the carrier’s requirements. Only after a load is agreed upon does the dispatcher charge the carrier a fee for the service. Also note, if the carrier uses factoring, many dispatchers will create and submit invoices to the factor on the carrier’s behalf.
A dispatcher may not deal directly with shippers on their own behalf. They must act as the representative of the trucking company or owner operator. If you deal directly with the shipper and sell those loads to outside carriers or owner operators, then you will need broker authority.
Because of this, many people hire a truck dispatcher or freight broker to help them out.
Though they are similar in what they do, there are some differences.
Here are some of the differences between a truck dispatcher and a freight broker:
1.A freight broker works with both shippers and drivers. Their job is to match them together, so everyone is happy.
2. Freight brokers work with both shippers and carriers but do not represent either one.
3. Brokers make money off of this exchange by charging the shippers and then paying the drivers.
4. Dispatchers represent only the carrier when negotiating freight.
Growth + Change = Opportunity! How are you going to capitalize on the opportunity as a freight broker, agent or dispatcher?