Should You Get an MC Number as a Truck Dispatcher?
Today, we will discuss whether you, as a truck dispatcher, should get an MC number.
To answer this question, I will provide you with two different scenarios. First, we’ll discuss why you shouldn't get an MC number. Toward the end of this post, though, we’ll examine why you may actually want to consider it. Afterward, you can apply these scenarios to your personal situation and determine which choice might be the best for you.
First, we need to answer a question as to why a truck dispatcher would want to get an MC number. The most common answers would be to access the load boards, book freight under your motor carrier authority, and then let your clients transport the cargo.
Let's talk about load boards. To register on a load board, entering an MC number was once required, meaning you would have to get your client's permission to use their MC number to register for the load board and search for their loads.
That is no longer true. Currently, you can get access to the DAT load board as an independent truck dispatcher without having an MC number. Since DAT is the largest load board, it will provide you with plenty of options to choose from for your clients.
I am pretty certain that other load boards will follow suit pretty soon. However, if they don't and you do want to register, you can always go back to your client and explain to them that you can provide them with more load options if they allow you to register on a different load board using their MC number.
The Pitfalls of Having an MC Number
It seems that if you had your own MC number, it would all be much easier.
However, it is very important you understand that you are getting a motor carrier authority when you get your MC number; you are becoming a licensed motor carrier.
This means you will have a lot of financial and administrative responsibilities. For example, you will have to start carrying quite expensive insurance and will have to go through DOT audits. So, going through all this trouble and spending all this money just to register for additional load boards does not seem reasonable to me.
And getting your MC authority so you can book loads under your MC number to let other carriers transport it is an even worse idea. This practice is known as double brokering, and it is forbidden by most contracts you would have to sign with freight brokers. It clearly states that if trucks of another motor carrier that are not yours will transport the cargo you have booked, they don't have to pay you.
Furthermore, they can blacklist your MC number in the various databases. And when you try to book a load in the future, nobody will be willing to give you one because you've been suspected of double-brokering loads with your MC number. You’d even expose yourself to multiple financial and legal risks by getting yourself involved with this practice.
The One Exception
We can kind of see that there is not really much reason you should get your MC number as a truck dispatcher. However, there is one exception. You may consider getting your motor carrier authority as a truck dispatcher if your truck dispatching operations will be built around this authority.
Basically, this would be beneficial if you intend to operate as a motor carrier (trucking company), and dispatching is just a part of this operation. Once you have your authority, your pool of clients will open up quite a bit.
As an independent truck dispatcher, you would normally only work with the motor carriers who have their own authority, and you would use their MC number to book freight for those clients. However, since you have your own MC authority now, you could accept owner operators who don't have their own MC authority. They would basically have to become your contractors and run under your authority.
This becomes an entirely different business model. You can make much more money operating this model, but you will also be exposed to many more risks and liabilities. As a motor carrier, you’re now responsible for the safety, compliance, and financials.
You have to make sure that you are well funded to run your trucking operations because trucks consume a lot of cash daily due to fuel, repairs, driver pay, etc., so you have to adequately prepare for this type of business.
If you are new to the trucking industry, I would absolutely not recommend you get involved with this business model. You should start with simple dispatching; provide assistance as a service to trucking companies, and your expenses and risks are fairly low.
If you are familiar with trucking and have experience in this industry, you may consider this model. Just ensure that you are well funded and have a good business model and structure in place.
With all that being said, we can conclude that as an independent truck dispatcher, you most likely don't need an MC number unless you intend to become a licensed motor carrier. You can now apply these factors to your personal situation and determine what is best for you.
© By Roman Shmundyak June 2022
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