Truck Dispatching 101: Tapping into Small Fleet Owners Hello, everyone! In today’s blog, we’re delving into a topic crucial for anyone in the truck dispatching arena – specifically focusing on small fleet owners. If you’re considering dispatching for this sector, there are several key aspects you should be aware of.
Why Focus on Small Motor Carriers? If you’ve caught any of my previous posts, you’ll recall that small motor carriers often emerge as primary clients in this business. But why exactly should you, as an independent truck dispatcher, focus on these smaller players instead of the big fish in the industry? Large motor carriers typically don’t outsource to independent dispatchers, a topic we’ve explored in depth in our post “Who Hires Independent Truck Dispatchers,” which I’ll link below. For now, let’s dissect the small motor carrier category into two distinct subgroups.
The Owner-Operator Subgroup First up, we have the owner-operators. These individuals or entities own their trucks, have their authority, and importantly, drive their trucks themselves. Their days are packed with operating their vehicles, leaving them little time to scout for freight or handle the paperwork. This is where you, as an independent truck dispatcher, step in, offering them invaluable assistance.
Understanding Small Fleet Owners Moving on to the second subgroup – small fleet owners. These are individuals or companies holding their own authority, much like owner-operators. However, the difference lies in scale; they own not one, but perhaps 2, 3, 4, or even 5 trucks. Since it’s impossible for them to drive all these trucks simultaneously, they might drive just one or none at all.
Why Target Small Fleet Owners? Targeting small fleet owners offers a strategic advantage from a marketing perspective. Let’s paint a picture: suppose you aim to dispatch for three trucks. If your targets are individual owner-operators, you need to sign up three separate entities. Conversely, securing a deal with a single fleet owner who owns three trucks means you can manage all three with one agreement. This not only simplifies your client interactions but also streamlines your operations.
The Hired Drivers Factor However, there’s a twist. Since these owners aren’t driving all their trucks, they hire drivers, introducing a whole new dynamic to your role as a dispatcher. Why does this matter? Because hired drivers have different objectives compared to owner-operators. An owner-operator’s goal is to maximize profit – they’re both the business owner and the driver, so they’re likely to be selective about the loads they take. They’re in it to earn as much as possible and are discerning about the freight they choose.
In contrast, hired drivers, generally paid per mile, prioritize racking up as many miles as they can, irrespective of how much the owner earns from a particular load. This creates a unique dilemma for you as a dispatcher, which is something we need to discuss in depth.
Navigating the Dispatcher’s Dilemma
The Dispatcher’s Choice: A Tale of Two Loads Imagine this scenario: You’re presented with two potential loads. One spans 700 miles, offering a payout of $1,400, while the other covers just 200 miles but pays $1,200. Which one would you choose? The answer, interestingly, hinges on who you’re asking. For an owner-operator or a fleet owner, the 200-mile journey with a $1,200 payout is the clear winner. Why? It’s a shorter trip with less fuel consumption, lower driver payment, and minimal wear and tear on the truck, maximizing profit.
Driver Preferences: A Different Perspective Conversely, ask a driver employed by a fleet owner, and you’ll likely hear a preference for the 700-mile, $1,400 job. From a driver’s standpoint, especially when paid per mile, the longer trip means more earnings. They’re less concerned with the owner’s profit margin, focusing instead on maximizing their own income.
Balancing Client Happiness and Driver Satisfaction This presents a classic dispatcher’s conundrum: who do you aim to please? Opt for the shorter, more profitable load, and while your client, the fleet owner, may be pleased, you might face discontent from the driver. They might even go as far as to complain about the lack of long-distance trips, potentially questioning your competence as a dispatcher.
On the flip side, if you book the longer trip, your client may not be thrilled. The fleet owner’s perspective is grounded in economics – the costs of truck maintenance, insurance, driver salaries, and the overall necessity to turn a profit. They might not see the justification in prioritizing the driver’s preference for longer trips.
The Dispatcher’s Tightrope Walk As an independent truck dispatcher, you find yourself walking a tightrope between these opposing interests. So, how do you navigate this tricky terrain?
Solving the Dilemma through Communication The key lies in effective communication. It’s crucial to maintain an open line of dialogue with both the fleet owner and the drivers. Understanding their respective needs and constraints allows you to make more informed decisions that strive to balance these divergent interests.
Balancing Interests in Truck Dispatching
The Priority of Small Fleet Owners In the dynamic world of truck dispatching, especially when dealing with small fleet owners, it’s crucial to remember who ultimately calls the shots. In my opinion, the small fleet owner always has the final say. They are your primary client and the ones who compensate you for your services. Therefore, their preferences in load booking and business operations are paramount.
Considering the Driver’s Perspective However, this doesn’t mean the interests of drivers should be overlooked. Ignoring a driver’s perspective can lead to significant issues. An unhappy driver might quit, leaving the fleet owner with an unproductive truck, which in turn affects your earnings. Alternatively, they might voice their dissatisfaction to the fleet owner, potentially jeopardizing your relationship with the client.
The Art of Communication The solution? Effective communication. Engaging with drivers is key, even if they are not your direct clients or paymasters. Understanding their concerns is vital. For instance, if a driver is displeased with a high-paying but short load, consider discussing with the owner the possibility of a bonus for the driver. The goal is to make the arrangement mutually beneficial, ensuring satisfaction on both ends.
The Dispatcher’s Ultimate Goal Your ultimate objective as a dispatcher is to navigate this dilemma, a challenge I’ve encountered over my decade-long experience. Working with individual owner-operators might be straightforward since their sole focus is maximizing profits, irrespective of mileage. But with fleet owners, the scenario gets more complex. However, the advantage is clear – managing multiple trucks with one client.
Growth Potential with Small Fleet Owners Small fleet owners often have growth potential. They might start with two or three trucks and gradually expand. Managing such a client means your business scales up too. Remember, handling six to eight trucks could translate to a significant monthly income for you.
Targeting Small Fleet Owners So, how do you specifically target small fleet owners? Yes, there’s a way! As I discussed in our video on direct marketing, dynamic databases allow you to focus on carriers based on the number of trucks they own. Filtering for carriers with, say, two to five trucks narrows your focus to the small fleet owner niche. Then, it’s all about crafting an effective marketing campaign, emphasizing your ability to maximize their profits while keeping their drivers content.
Conclusion: A Win-Win Strategy for Dispatching To wrap up, remember that in truck dispatching, especially for small fleet owners, it’s all about finding and maintaining a balance. Your role as a dispatcher is to ensure everyone is content and profitable. By employing strategic communication and understanding the needs of both the fleet owner and their drivers, you can create a win-win situation.
Stay tuned for more insights and strategies in truck dispatching. Until next time, happy dispatching!
Copyright by Roman Shmundyak December 2023
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