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Dispatcher Info

The Dispatcher and Insurance-Quick Update

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I just wanted to write a quick update about the insurance issue a few post back.  I recently spoke with a lawyer friend about the liability issue, and should I get separate insurance.  His first comment was that my liability for dispatching is low risk for getting sued.    As I am not a broker, my risk is lower, as is my responsibility toward/about the freight.  I just dispatch.  The truck company has a greater risk, as does the driver.   So, being added as additionally insured with my client should help protect me and my company assets.

So for you new dispatch businesses out there, make sure you add this stipulation in your contract that you present to your prospective clients, that your company be named as additionally insured with their insurance company. 

Dispatchers, protect your assets, be added as additionally insured.

Dispatcher Info

Dispatchers Info On What To Charge!

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What is an average percentage you should charge the trucking companies you dispatch  for?

The answer to that question will vary.  I would suggest that you set a price that you can live with for the services that you are going to provide.

For a dispatcher, these are going to be your regular duties:

  • Call brokers, finding freight (using load board contacts)
  • Calls to the driver to tell him what loads are available
  • Book the loads the drivers wants, passing along the paperwork or instructions to the driver for the pick up.  Once the driver picks up the load, (you may decide this is the end of the obligation to the truck company and you are free to bill for the load that is picked up.)
  • From that point the regular upkeep of your own paperwork (i.e. filing, billing).

If this is what you do for your clients and they agree that this is all they want, I would say a fair percentage is between 6 and 8 percent per load.

If your client wants you to be more involved, like helping with invoicing for loads that you book for him.  You should start at 10% per load.

Don’t try to make all your money off of one truck, but get a fair price for what you do.  So, in my opinion set your dispatch fee to charge (client) trucking companies that you dispatch for is between 6 and 10% per load.

Dispatcher Info

Dispatching and the Insurance Issue

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Recently I got a comment that, what we purpose seems TOO easy when starting a dispatch business.  One of the comments was about being insured.  I’ve taken a couple of weeks to research this subject.  When you start your business if you sign on as a truck agent for the truck company that signs your contract, it would be a good idea to have them add your company as additionally insured.

As I understand it, your liability as a dispatcher is low risk.  The question?  Could you get sued if something goes wrong with the load you have been cleared to book?  Maybe.  So, far the best solution is to have your company name on the certificate of insurance as additionally insured.  Why?  Because if the company gets sued for a load they have agreed to have you book, the companies insurance company will also supply a lawyer for your company to fight the suit.

I have a request into my insurance company as to the best way to combat this issue, and to date, the best advice is to be added as additionally insured with the truck companies you have contracted with.  If I get any more information about this issue I’ll let our readers know.

If you sign on with a truck company as it’s truck agent, or admin office with dispatch capability, and you are an employee of the company, than you should not have to worry about the insurance issue, though you may want to get separate insurance when you register your business.  ( It was not recommended by my insurance agent.)  This is the method we used to begin dispatching right away.  The initial set up is very low.  The cost is derived from the set up of your office, and you only need to be concerned with phone calls, faxes, emails, and scanning documents.  If you have that capability you can start dispatching right away.

For the people that try to tell you that starting  dispatching is difficult, here is what the Wikipedia says about it:

en.wikipedia.org/wiki/Dispatcher

What is a dispatcher?

Dispatchers are communications personnel responsible for receiving and transmitting pure and reliable messages, tracking vehicles and equipment, and recording other important information. … trucking companies, … use dispatchers to relay information and coordinate their operations. Essentially, the dispatcher is the “conductor” of the force, and is responsible for the direction of all units within it. [2]

Simply Put – DISPATCHERS DISPATCH

I started a dispatch service not a logistics service which is completely different.  (3PL-Third Party Logistics Company.)  For Info about the difference between a company dispatch service and a 3PL service I have included some references you may want to check out:

Websites about 3PL’s

Though these seem closely related, it is not what we do.  I hope this information is helpful on how to build your own dispatch service.

Dispatcher Info

Getting hired with a brokerage as a dispatch/agent

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Direct Shippers, The Broker Agent and the dispatcher

Comment/Question 

I have read the Freight Brokerage Business book, Import/Export guides, have the computer and fax setup, I do not have the  transportation/freight jargon down pat, am new to dispatch/agent work, I am wondering how long it will take for me to get started, what is a good way to break into the industry and will anyone hire/train those without prior experience???

Answer for the beginning dispatcher looking to work for a brokerage firm as an agent/dispatch and learning the trucking industry language
If you are trying to get hired on as an agent with a brokerage, there are some brokerages that may consider you for employment as an independent contractor.  You can find some of their ads on load boards like getloaded.  You could call some of  the brokerages who are offering freight for transport.  While you are calling about a particular load, just slip the question in if they are hiring.

I am not a freight broker, though this is what I found when I’ve approached a brokerage about becoming one of their agents.  They are looking for what you can bring to the table.  What that means is, can you bring them freight contracts from direct shippers.

Getting direct shipper contracts can be time consuming but if you get one for yourself, or your truck company, you could be set for life, because you get the opportunity to bid and move the freight at a higher rate than most brokered freight is offered for.  If  you secure a direct shipper contract for a brokerage your percentage may be 60/40.  Good pay, but the direct shipper contract belongs to the brokerage you work for (not you).  Some brokers may be willing to give you a list of direct shippers to call to establish the contact.  If you get accepted as a agent you can ask if they have a list of contacts.

What you are looking for as far as direct shippers are concerned are:   manufacturers of everything from paper to electronics.  Anything you see around your home has a manufacturer or distributor.  Contact them to see if you can get a foot in the door.  If you start your own truck company with your own MC and broker Authority,  you are better equipped to approach manufacturers and major companies (examples:  Scott’s products for the spring and summer months would be a good one to approach.) for direct freight.  If you have trucks that you can dedicate to move any freight you acquire it is called an asset based company.  If you do not own any trucks, it is known as a  non-asset based company.  When you approach a manufacture or distributor, many are looking for 5-10 trucks that you can dispatch to move their freight.  Anything less, and I’m not sure if they will even talk to you.

You’ll also need to learn to bid lanes for freight, You will need to offer the direct shipper a reasonable bid for their freight.  To help you learn about bidding lanes I suggest that you try dispatching for a few months to get a feel for a particular lane.  Most brokers receive 10%  to 15% off the top of any bid (and some get more).  This should help you figure out about how much to bid for a lane.    Lanes are a geographic region you want to move freight in.  Example: The East Coast corridor.  That could be from Florida to New York.  Getloaded and Internet truck stop load boards has some programs that can help you with what freight rates should go for in different regions.  You can also learn by just booking freight for owner operators or your own truck company.  This avenue will go a long way to getting you use to the transportation industry language.

If you have a truck to dispatch, you can start right now.  You do not need to have an MC, or a brokers license.

  • You’ll need is a truck company that will hire your services as its’ dispatcher.
  • A business license
  • A contract (your company contract)
  • A phone/fax
  • printer
  • Email
  • Loadboard
  • A way to get paid for your services

About the Language?  Mostly, the language is something you will learn the more you have contact with booking loads.

Dispatcher Info

1st Form In Dispatching “The Contract”

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The first dispatching form you need before taking on clients is “your service contract”.  Take a little time to list on a piece of paper what you are willing to do in your dispatch business, how much money you will charge (% or flat rate), how you will get paid (paypal, credit cards, paper check), how long you will wait to get paid. 

Next.  Determine the things you will require new your client to do for your company while you are contracted, example:  the assignment of a  a certain number of trucks to be dispatched exclusively by your company. (I suggest at least one).  This may seem like a little thing, but I have learned from experience, if you do not spell things out in plain English in your contract, you’ll have grief and probably mess-up your cash-flow.

The last thing that you must have on your contract is “signatures”.  Without the signature you don’t have a contract, and you are working for free.   Get a signature on your contract.  You should sign, and your client should sign.  It is also a good idea to have a service start date on the contract.  The contract is for your protection as a business owner.  No, you may not need to go to court about a breach of contract, but if you do need to, have a valid contract, get the signatures.  Do not start working for ANY client without it.  I don’t care if it’s your brother.  No contract, no work.

Below is a list of the technical stuff you’ll need included in your contract:

  • Your company name and address
  • Your Clients name, MC#, contact info
  • The duration of the contract
  • Is it going to be an exclusive service?
  • Your responsibilities as a service provider.   (You’ll need a detailed accounting of what your service will give for what you are going to ask your client to pay for.
  • Your fees
  • Your payment method and schedule
  • Your clients responsibilities
  • A signature line for both parties
  • The date the contract will be in effect
  • Is there going to be a trial period and how long
  • The expiration date of the contract

You may be able to get a pre-made contract form from stores like Office Depot, or a stationary shop.  The important thing to remember is that you spell out everything you want in the dispatch service contract.  If it’s not there write it in.   It doesn’t need to have all that legal gorgon if you are writing your own contract.  Make sure the conditions of the contract CLEAR and indicates that both parties agree to the conditions.  Remember the court shows where the plaintiff goes in and all he has is a signed piece of paper.  Well, get the signature, and deliver what you say you will.

Dispatcher Info

Owner Operator and Company Drivers

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Working with Owner Operators and Company Drivers for the beginning dispatcher.  If you know a truck driver who is working for a company (other than himself) he is referred to as a company driver.  If the company driver has his own truck, and trailer he may want to venture away from the company he is working for and begin working for himself.  If he is working for himself, he is referred to as an Owner Operator.  If he has his own authority and insurance he is able to run and book  freight loads independent of the company as long as he is not under contract with the company.

Question:
My husband has a truck and I want to dispatch him. How do I begin?

Answer:
This is a popular question. For the dispatcher, if you already have a truck to dispatch, you are half way to having a successful dispatch business.
Here are a couple of questions for you.

  • Is he a company driver
  • Is he under contract with the company he is working for

Most company drivers are under contract to the company that he is working for.  He will need to review his contract to see if he can carry freight loads independent of the company. Most companies will want the driver to be exclusive to them. They do not allow “trip” drivers. A trip driver is not under exclusive contract, and can get his own freight loads from other shippers.   If this is the case, the truck driver will need to go to his local DMV, and register his truck “company” as an independent Owner/Operator, and get what is called a MC (motor carrier) number. The next step is to get his own authority to transport freight either interstate, or intrastate. The next item that he will need is insurance for his truck company (business). The truck driver can get most of this information between the DMV and the Federal Motor Carrier Administration (http://www.fmcsa.dot.gov/registration-licensing/registration-licensing.htm ).

It is the responsibility of the Driver/Owner Operator (also known as the truck company) to take care of the these steps.  Your responsibilities as the dispatcher should start after he/she has taken care of the FMCSA, and he is legal to move freight as an independent owner operator.

  • The drivers starting point…. Read your company contract.
  • Talk to the DMV or apply online for your MC, etc. (FMCSA)
  • Contact your insurance Agent
  • Activate your authority
  • Start looking for your own freight or…hire a qualified dispatch service (they take care of all the paperwork that you will need to book freight loads as an independent owner operator.   A good dispatch service will help you grow your business in such away that you are both collecting good pay for the work that you both do.)
  • You may have to quit your JOB before you can actually start driving for yourself.

There you have it.  I hope this information was helpful for the owner operator, the company driver and the dispatcher.  Though, if you want to take on the extra duties of filing the paperwork for the driver, you can.  Know this, it would be easier for the driver to take care of this as he already had the experience of registering his truck with the DMV.)  If he already has an MC# (Motor Carrier) or a USDOT# (his authority to transport freight intrastate or interstate) he is more than halfway there.  Your duties as a dispatcher is to keep his truck loaded.

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