How much should you charge for dispatching trucks?
Hello, everyone. Today, we’re going to discuss what you can charge your clients as an independent truck dispatcher.
As many of our students get ready to launch their truck dispatch service, they ask, “How much should I charge my clients for my services?” I don’t want to spoil the suspense for you, but I am not going to give you an exact number. Instead, we are going to discuss how you should determine an optimal rate for your particular situation.
First, we can take a look at what most independent dispatchers charge for their service. If you do some research, you will realize that right now, rates will range from 3–8% of the gross revenue they booked for their clients. I could also say that the median average is lingering around 5–6%. Is earning 5–6% a good thing? I personally think so, but let’s do some math. Let’s assume that you are dispatching an average semi-truck that will generate conservatively around $6,000 in gross revenue every week. If you are charging 5–6% of this revenue, you will receive $300–360 every week from one truck. That means that you will be making approximately $1,200–1,400 every month from just one truck. Multiply this by 12, and you will be somewhere around $14,000–16,000 in gross revenue per year from one truck.
How many trucks can you dispatch? I would say easily up to five trucks. So, you can earn a decent living charging 5–6% of the gross revenue. Does this mean that you should be charging 5–6%? Not necessarily. Your rate should be determined by two factors: what kind of services you provide and what is an acceptable rate to you.
Let’s discuss the first factor. Somebody may offer a service where they operate 24/7. It could be important to some trucking companies, and they might be willing to pay extra for a service like that.
Somebody else may be offering a wide range of administrative support, such as billing and permit applications and compliance. And once again, that can be valuable to some motor carriers, and you could be charging a higher rate for providing these services.
So, as you determine your rate, you should think about what kind of services you are providing and what you think your clients might be willing to pay for them.
The second factor is what is acceptable to you. For example, if you are living somewhere in Eastern Europe or Asia, earning $1,000 per month per truck may not be such a bad thing, especially if you are dispatching two or three of them. However, for somebody living in the US, such earnings would not be acceptable since their cost of living is much higher.
So, as you’re trying to determine what you should charge your clients, think about what kind of specialty services you have to offer to your clients and if they are willing to pay for them. Second, think what is acceptable to you. Can you make a living charging a certain rate?
For example, I would not be willing to work for less than 6%, and I can afford to make this statement because I have a pool of clients whom I work with. And if somebody comes to me and says, “Hey, I will pay 3%,” I will tell them, “Thank you very much, but I cannot accept that.” And it’s not a big deal because I will keep on working with my clients, and I will accept the next client who is willing to pay my rate.
On the other hand, if you have no clients and are new to this business and just want to gain the experience as a truck dispatcher, you may consider accepting a lower rate to get started. And as you get clientele, you can start raising your rates in the future. I think it is much better than just sitting and do nothing and hoping that someone will come and pay your desired rate.
How do we determine what the current rates might be? Just take a look at competitor websites and see what they’re charging and what they’re offering. Then you can determine how you should position yourself. Should you try to undercut everyone by your price? Or should you offer more services than anybody else and then charge a higher rate? It’s entirely up to you and your business strategy, but don’t forget to do your market research.
© By Alfa X Logistics April 2022
Are you thinking about becoming an independent truck dispatcher? LearnDispatch offers online truck dispatcher training courses which are suitable for people not familiar with transportation industry. Learn more about our training by visiting Training Details page or choose your course by clicking here.