For independent owner-operators and small-to-midsized trucking companies, choosing whether to work with a dispatch service is an important decision. A solid partner will help you locate loads quickly, maneuver logistical challenges like inclement weather and road closures, and help drivers/companies with billing and customer service. But establishing a working relationship with a dispatch service isn’t always the best decision for freight carriers. Let’s take a look at some of the benefits and drawbacks.

Freight Dispatching Service vs. Freight Broker

First and foremost, it’s important to understand that there is considerable overlap between dispatching services and freight brokers, particularly from the trucking point of view. Both help match carriers to shippers and deal with broad logistic issues for drivers on the road. The key difference between them isn’t so much what they do, it’s how they do it—or, more specifically, how they’re paid.

Dispatching services generally bill the owner-operators/companies with whom they work, and often prioritize those relationships over ones with shippers. In other words, a dispatching service essentially works for you/your company. Freight brokers, on the other hand, charge shippers the highest rate possible and then pay carriers the lowest rate possible; the difference is their revenue. Neither model is better or worse than the other, though understanding the fundamental difference between them is important for your bottom line.

The Benefits of Dispatching Services

The upsides to working with a good dispatch service are plentiful. As mentioned, they essentially function as a logistic arm for your operation. Dispatch services will often connect you to loads faster than brokering deals on your own, which can equate to many fewer empty miles. They can also help route you around hazards that you may otherwise be unaware of or unable to navigate on the fly, which translates to smoother and more timely operations. Dispatch services can also help owner-operators and trucking companies with billing, collections, and other paperwork related to customer service and carrier compliance.

The Drawbacks of Dispatching Services

For most independent carriers and small-to-midsized companies, there will only be two “drawbacks” to consider when deciding whether to partner with a dispatch service: costs and service quality. The former should be obvious; if your current and/or projected revenues don’t support hiring an outside partner, a dispatching service probably won’t make sense. Likewise, if you’re an owner-operator with a list of clients that provide you dependable business on consistent routes a dispatch service may not make financial sense.

The other potential drawback to consider is quality of service. As in most businesses, freight dispatchers are not all on equal footing. Carriers looking for a partner should take the time to vet their options and consider what services they need most immediately. Experienced drivers working familiar routes may not need help working around or through hazards and slowdowns. A carrier with a knowledgeable and efficient operations staff might not need assistance with billing or collections operations. If a dispatching service has a reputation at being especially good (or bad) with a service you know you will (or won’t) require, that ought to influence your decision. Ultimately, though, this is entirely subjective. The same rules apply to working with a dispatching service as they would any other partner for your business.

Carriers and shippers of all size and service areas need to be increasingly cautious when choosing business partners. Planning for long-term success includes paying attention to credit scores. Let TransCredit help you with your credit needs. Contact us today.