Today, we’re going to discuss how independent truck dispatchers get paid. I am frequently asked, “How do you get paid as a truck dispatcher? Should I collect money from a freight broker? Do I need a factoring company to get paid? Or how do I collect the money if I am working from a remote location?”
I am going to answer all these questions and offer you an optimal solution for getting paid. Starting with whether or not you should collect money from a freight broker, the answer is absolutely not! As an independent truck dispatcher, you are just assisting your client,
which is a trucking company. You are not a legal party to the transportation transaction between a licensed freight broker and a licensed motor carrier. You are just helping one of the parties with the process of conducting this transaction. Therefore, you should not be collecting or paying out any money. Yes, I have seen some dispatch companies get set up in such a way where they’re basically acting as a factoring company and funding the transactions for their clients, but this setup is very complicated, and you will be carrying financial risks, which realistically, is just really unnecessary.
Speaking of the factoring companies. Do you need one to get paid as an independent truck dispatcher? The answer to this question is “not really.” Some factoring companies offer partnership programs to independent truck dispatchers. The idea behind this partnership is that you, as a dispatcher, will refer your client, the trucking company, to the factoring company. And then, once your client starts factoring their invoices, you will begin receiving your percentage automatically from the factoring company, as they are the ones paying out money for the invoice to the trucking company. They will set aside your percentage and pay it out directly to you. With such an arrangement, you don’t have to bill your clients and as your clients are getting paid, so will you.
However, there is a huge flaw with this strategy. What if your client is not using a factoring company and bills brokers directly? What if your client has already signed up with a different factoring company, which does not offer a partnership opportunity to the dispatchers? Switching from one factoring company to another is not really that easy. While getting paid through a factoring company may sound like an attractive opportunity, in reality, it will be very difficult to implement, especially when you are working with many different clients. So what is the optimal solution for getting paid? In my experience, you should just bill or charge your clients directly for the services you have provided. For example, when you’re getting your taxes done, your accountant just charges you for tax preparation. You should do pretty much the same. You have done a service and now you’re billing or charging your client for the service you have provided. It’s that simple.