Freight Broker vs Dispatcher vs Agent: Who Does What

A freight broker arranges loads between shippers and carriers and is paid by the shipper. A dispatcher works for a carrier, finding loads for its trucks and handling its paperwork. A freight agent sells and covers loads under an existing broker's authority.

All three spend the day on the phone and on load boards, which is why the roles get confused. They differ in who they work for, who pays them and what licence they need.

Side by side

Freight broker

A broker has its own customers. It quotes the shipper, finds and vets a carrier, issues the rate confirmation, tracks the load, invoices the shipper and pays the carrier. It needs broker authority from the FMCSA and a $75,000 bond or trust.

More detail: what a freight broker is and how to get a freight broker license.

Truck dispatcher

A dispatcher is on the carrier's side. An independent dispatcher typically works for owner-operators and small fleets and:

• Searches load boards and calls brokers to find loads for the carrier's trucks.

• Negotiates the rate on the carrier's behalf.

• Handles the carrier's paperwork: broker packets, rate confirmations, invoices.

• Plans routes and keeps the truck loaded.

The dispatcher does not contract with the shipper and does not handle the freight payment. The carrier books the load under its own authority and pays the dispatcher a fee.

Where dispatching ends and brokering begins

This line matters. A dispatcher who represents a carrier, under an agreement with that carrier, is acting as the carrier's agent and does not need broker authority.

A dispatcher who starts taking loads from shippers and placing them with whichever carrier will take them, or who collects the freight payment, is arranging transportation for compensation. That is brokering, and doing it without authority and a bond is illegal. The FMCSA has published guidance on this, and the answer depends on the facts: who the dispatcher represents, who holds the contract and who is paid.

If you are a dispatcher who wants your own shipper customers, the route is to get broker authority or to become a freight agent.

Freight agent

A freight agent does a broker's work without holding the licence. The agent finds shippers, quotes and covers loads, and operates under an existing broker's authority, bond, contracts and systems. The broker invoices the shipper, pays the carrier and carries the legal responsibility. The agent receives a share of the margin on its loads.

It is the most common way to start in brokerage without the bond and the working capital. The trade-off is that the customer contract belongs to the broker.

Which is right for you?

• You want your own customers and full control: freight broker. You need authority, a bond and working capital.

• You want to sell freight without the licence and capital: freight agent.

• You want to work for carriers and keep trucks loaded: dispatcher.

The steps for the first route are in how to become a freight broker.

What brokers should know about dispatchers

Brokers deal with dispatchers every day, and most are legitimate. A few checks keep it safe:

• Confirm the dispatcher is authorised by the carrier. Call the carrier at the number on file with the FMCSA.

• Make the rate confirmation out to the carrier, not the dispatch company.

• Pay the carrier or its factor, as set out in the carrier packet.

• Be wary of a "dispatcher" offering many unrelated carriers for the same load. That pattern appears in double brokering. See what double brokering is.