Many disputes between carriers and dispatchers start the same way: nobody wrote down who was allowed to do what. A clear agreement prevents most of them.
Who the dispatcher works for
The agreement should state that the dispatcher acts on behalf of the carrier, not the broker or shipper, and that the dispatcher is not acting as a broker. The carrier operates under its own authority and insurance.
The fee and how it is paid
Most dispatch fees are a percentage of the gross revenue on loads the dispatcher books. The agreement should say what the percentage applies to, such as line haul and fuel, whether accessorials like detention are included, and when the fee is invoiced and due.
How loads are approved
Spell out how each load is approved: a call or message for every load, written green-light rules for loads that may be booked automatically, or a mix of both. State who signs rate confirmations.
Documents and access
List what the dispatcher may send on the carrier's behalf, such as the W-9, certificate of insurance and authority letter, and which accounts the dispatcher may use, such as load boards or a TMS. Access should end when the agreement ends.
Payment flow
The carrier should be paid directly by the broker or its factoring company. The agreement should make clear that the dispatcher does not collect freight payments on the carrier's behalf unless the carrier specifically arranges it in writing.
Term and ending the relationship
Include how long the agreement lasts, how much notice either side must give to end it, and what happens to loads already booked when it ends.
General information, not legal advice. Have an attorney review any agreement before you sign it.
This article is general information, not legal, tax or regulatory advice. Rules change; confirm current requirements with the responsible agency or a licensed professional.
