What is the difference between a Broker Agent and a Independent Dispatcher?by Coverloads.com on 05/10/11
Many people ask this question when they are considering getting into this industry.
BROKER AGENTS work for established brokerages. They will contact direct manufacturers to get set up with them and begin receiving a list of their available freight. Once they begin obtaining freight, they will look for trucks to move the freight. The idea is to find a qualified compliant carrier who will move the load for the LEAST amount of money so that you can earn a commission. For example: Direct Manufacturer is paying $1000, and the broker agent wants a 15% commission. The broker agent will need to find a truck to move the load for $850 or less. The commission is then split with the brokerage--50/50, 60/40, 70/30 with the broker agent getting an equal or higher percentage of the split. If the commission is $150 and the split is 50/50 then the broker agent would receive $75 for that particular load. The broker agent is working through the brokerage, but in essence they are working for the shipper.
INDEPENDENT DISPATCHERS work directly for the owner operator or small trucking company to keep their trucks loaded and moving. You will work to stay ahead of the truck so that they do not ever have to sit and wait on a load. Independent Dispatchers will work with both brokerages and direct manufacturers to try and get the MOST money for your truck. Independent Dispatchers are paid on a percentage or flat fee basis for each load. Generally, the percentage is 7 to 9%, with that rate being adjustable based on the amount of work the owner operator wants you to do. If they want you to also handle the billing, then you would need to charge more. Some Independent Dispatchers charge a flat fee per load, such as $50 or $100. Your rate or fee is going to be what you can work out with you driver. For example, if you are paid 8% of each load, then if the shipper is paying $1000, then you would receive 80 from the owner operator. If you are paid a flat fee of $100 per load, then you would receive $100 for the load used in the example. Some Independent Dispatchers are also paid a weekly salary per truck. The Independent Dispatcher is working for the owner operator.
If you are just starting out in this industry, the larger brokerages will not hire you if you do not have a book of business or any experience. You will have to begin with some of the smaller brokerages. Market yourself! You can check out the FMCSA website to look for brokerages who have just received their authority and call them to see about working with them. If you have received proper training and you explain to them what you learned in your training, then odds are they will be happy to bring you on as an asset to their new business. You can negotiate a contract with them concerning payment.
No matter which avenue you choose you MUST possess the following skills:
Telephone skills--do not sound like you have a mouthful of oatmeal!
Computer skills--you have to know more than just how to turn it off and on. You need Microsoft Office (at least the student edition), you must know how to use email, attach documents to the email, and how to open attachments.
Negotiating skills--You have to be willing and able to work with the numbers.
Customer Skills--This is a service oriented business. If you would not be a good server in a restaurant or do not care about pleasing people, then this may not be for you.
Multi-tasking skills--This is a very demanding position. You will need many websites up at once, along with your email and you will be constantly changing screens, answering the phone, checking faxes, completing paperwork and creating confirmation sheets.
Organization Skills--prioritizing. Keep the paperwork organized and remember who you are talking on the phone.
Cash Management Skills--Know what is coming in and out and when.