ENTRY 01 / DISPATCHER VS BROKER
Dispatcher vs broker: two people on opposite sides of your rate con
The dispatcher vs broker question confuses a lot of new owner-operators because both talk about "finding loads". The difference is who they work for. A broker is paid by the shipper to get freight moved. A dispatcher is paid by the carrier to get the carrier a better load at a better rate. Follow the money on one load below and it becomes obvious.
- Broker: shipper's side
- Dispatcher: carrier's side
- You sign the rate con
We work for carriers only. We don't sell freight to shippers, and every load is the carrier's decision.
Knowing which side each person sits on tells you whose interest they protect when the rate is being set. That one question clears up most of the confusion.
ENTRY 02 / MONEY FLOW
Follow one load's money from shipper to carrier
The shipper pays the broker. The broker keeps a margin and pays the carrier the rate on the rate con. A dispatcher, if the carrier has one, takes its fee from the carrier's side. Change the numbers and switch to "who works for whom".
EXAMPLE only. Brokers don't publish margins per load and they vary widely. The point is the direction money moves and whose side each party is on.
The broker's margin is the difference between what the shipper pays and what you are paid. You usually don't see it.
The dispatcher's fee comes out of your gross, so a dispatcher only earns more when your rate goes up.
The rate con is between you and the broker. With us, it is always in your name and you sign it. Nothing is agreed until your signature is on it.
ENTRY 03 / SIDE BY SIDE
Freight broker vs dispatcher, line by line
| Factor | FREIGHT BROKER | TRUCK DISPATCHER |
|---|---|---|
| Works for | The shipper | The carrier |
| Paid by | The shipper, keeping a margin over the carrier rate | The carrier, as a % of gross or a flat fee |
| Authority | Broker authority from FMCSA, with a financial security filing | Depends on activities; may be a bona fide agent or may need broker authority |
| Who it negotiates against | The carrier, to keep the rate down | The broker, to push the rate up |
| Signs the rate con | Issues it to the carrier | Not ours: the carrier signs it |
| Handles | Shipper relationships, tendering, tracking for the shipper | Load search, negotiation, paperwork and check calls for the carrier |
| Owns the freight relationship | Yes, with the shipper | No; it works the market for the carrier |
What FMCSA says about dispatch services and broker authority
In June 2023, FMCSA published guidance on the definitions of "broker" and "bona fide agent". It notes there is no statutory or regulatory definition of a dispatch service, and that a dispatch service can be either a bona fide agent of a carrier or a broker, depending on what it actually does. That takes a fact-specific look at each operation.
SOURCE: FEDERAL REGISTER, DEFINITIONS OF BROKER AND BONA FIDE AGENTS, JUNE 16, 2023
Signs that point toward broker status: working for shippers, handling the money between shipper and carrier, and exercising discretion to allocate loads among several carriers.
Signs that point toward an agent of the carrier: working only for carriers under a prior agreement, and the carrier keeping control over which loads it takes. FMCSA notes that the more control the carrier has, the less likely the dispatcher is exercising its own discretion.
Broker registration rules are in 49 CFR Part 371. This page summarizes public guidance; it isn't legal advice.
Red flags: a "dispatcher" that acts like a broker
The money runs through them
If shipper or broker payments go to the dispatcher first and you are paid out of what is left, ask why, and ask to see the rate con.
You never see the rate con
If the dispatcher signs rate cons for you, you can't know what the load really paid or what you agreed to.
They find you loads from 'their shipper'
A dispatcher selling capacity to shippers is on the shipper's side of the table.
The rate you hear is not the rate on paper
Any gap between the number quoted to you and the number on the rate con is someone else's margin.
How to check a broker before you sign
Whether you book yourself or a dispatcher books for you, check the broker. Look up its broker authority and status on FMCSA's public registration database, and confirm the MC on the rate con matches the company you are talking to. Check how it pays: credit and days-to-pay services, your factoring company's broker approval, and your own experience. Read the rate con for payment terms and any quick-pay fee. New brokers, brokers with recent complaints from carriers you know, and brokers whose MC changed recently deserve a closer look before you haul for them.
Our desk does these checks before a load reaches you, and keeps a do-not-book list of brokers you or we have had problems with. You still see the broker's name on every rate con and can say no for any reason.
How we work, in plain terms
We are a truck dispatch service for owner-operators and small fleets. We work for carriers only, under a written agreement with each carrier, and we don't sell freight to shippers. Every load reaches the carrier as a rate con from the broker, in the carrier's own name, and the carrier signs it or turns it down. Brokers pay the carrier named on the rate con, or the carrier's factor.
On your side of the table
Our only job on a load is a better rate and better terms for you.
Your decision, every time
We never accept a load for you or sign in your name.
Your name on the paperwork
The rate con, the invoice and the payment are in your company's name.
ENTRY 04 / QUESTIONS
Dispatcher or broker: common questions
You will work with brokers either way; most spot freight runs through them. If you want someone negotiating on your side, see dispatch for owner-operators and the dispatch pricing page. If you are choosing which brokers to work with, our guide to the best freight brokers for owner-operators covers what to check.
Q01What is the difference between a dispatcher and a freight broker?
A freight broker arranges transportation for shippers: it sells capacity to the shipper and hires a carrier to haul, keeping the difference. A truck dispatcher works for the carrier: it finds loads, negotiates with brokers and handles paperwork for the carrier, and is paid by the carrier. They sit on opposite sides of the same rate con.
Q02Does a truck dispatcher need broker authority?
It depends on what the dispatcher does. FMCSA's June 2023 guidance says there is no single definition of a dispatch service; depending on its activities, a dispatcher may be a bona fide agent of the carrier or may be acting as a broker that needs broker authority. Discretion over allocating loads among carriers and dealing with shippers point toward broker status.
Q03Who pays a truck dispatcher?
The carrier. A dispatcher is usually paid a percentage of the carrier's gross on loads it books, or a flat weekly or per-load fee. Our fee is 5% of gross with one truck and an MC past 6 months, 7% for newer MCs and 4% for two or more trucks. Brokers are paid by shippers.
Q04Can a dispatcher also be a broker?
A company can hold broker authority and also offer dispatch services, but then it may be on both sides of a load, which is a conflict you should ask about. If a dispatcher books your truck on loads it brokers itself, ask how the rate is set and who it is really negotiating for.
Q05Should an owner-operator work with brokers or a dispatcher?
Usually both. Brokers post most of the spot freight owner-operators haul, so you will work with brokers either way. A dispatcher is someone on your side negotiating with those brokers. The question is whether you want to do that negotiation and paperwork yourself or pay someone to do it.
Put someone on your side of the rate con
Apply in about a minute. We negotiate with brokers for you; every rate con comes to you to sign or refuse.
Shipper pays · EXAMPLE
Carrier rate · EXAMPLE
You keep · EXAMPLE