Freight brokers and dispatchers play a key role in finding loads for carriers and owner-operators that keep their trucks rolling.
They take off the hassle of finding loads, negotiating rates, planning routes from the carrier or owner-operator shoulders.
If you don't have time to look for loads, consider the help of a freight broker or dispatcher.
Both act as the middle man between the shipper and the carrier. But they are not the same.
Below, find out what is a freight broker and a dispatcher and their differences.
The differences between freight brokers and dispatchers
The common ground for freight brokers and dispatchers is that both help carriers find loads.
However, freight brokers and dispatchers have some core differences.
After understanding the below differences, you might want to start a dispatching company.
1. Difference by definition
- Freight brokers
Freight brokers work with both shippers and carriers but do not represent either one.
Their job is to match the shipper and the carrier improving the communication between the two.
Brokers provide a single point of contact for shippers. They negotiate the price, plan the route and track the freight on behalf of the shipper.
- Dispatchers
When looking for loads, a dispatcher represents the carrier's best interest.
While dispatchers still negotiate rates with a shipper or a broker, they act as the representative of the trucking company or owner-operator.
Dispatchers are usually employed by the carrier or contracted and paid by the carrier. They coordinate movements to ensure on-time delivery of goods. They also work with truck drivers to inform about the load.
2. How they make money
- Freight broker
Freight brokers make money by keeping the difference from negotiating higher rates with the shipper and, after that, negotiating a lower rate with the carrier.
The more they charge the shippers and the less they pay the carrier or the owner-operator, the more money they make.
At the same time, it's the broker's best interest to keep carriers and owner-operators in business because it keeps them in business as well.
Be aware that freight brokers will try to negotiate the lowest rate with the carrier because their profit depends on it.
- Dispatcher
A dispatcher works to protect the carrier's interest because dispatchers receive a percentage of the negotiated rate with the broker.
So, the higher rate he negotiates with the broker, the higher pay he receives from the carrier.
Dispatchers make money only if they find loads for the carrier.
3. Motivation
- Freight brokers
Freight brokers are motivated to encourage shippers to pay higher rates while offering carriers lower rates.
Their goal is to find the fine balance between offering carriers lower rates while also enticing them to continue taking loads directly from them.
- Dispatchers
Dispatchers are motivated to find carriers higher paying freight. The higher the rate they can find for the carrier, the more money they can make.
4. Skills
- Freight brokers
- Freight brokers have good negotiation skills.
- They know the pay rate for most lanes.
- They understand the operating cost of a truck.
- Dispatchers
- Dispatchers have good negotiation skills.
- They have good communication skills.
- They have to understand the logistics of freight hauling.
- Sometimes, the have trucking experience, which serves the carrier well.
5. Involvement in admin work
- Freight brokers
Freight broker doesn't get involved in a carrier's admin work.
- Dispatchers
Dispatchers help to reduce the burden of admin work for the carrier.
They search load boards to find cargo to fill the load and maximize truck utilization.
A dispatcher helps the trucking company with invoicing and revenue collection.
