How Independent Truck Dispatchers Get Paid

Introduction:

In the world of business, it’s essential to understand the systems and processes that drive success. In the trucking industry, businesses operate within a complex system known as the supply chain. Independent truck dispatchers play a crucial role in this system, connecting carriers, brokers, and manufacturers to ensure the efficient transportation of goods. In this blog post, we will explore how independent truck dispatchers get paid and shed light on the key aspects of their work.

The Importance of Problem-Solving in Business:

Before delving into the payment process, it’s important to recognize that businesses exist to solve problems. By focusing on addressing the needs of others, businesses can generate revenue and thrive. However, many businesses fail because they prioritize making money over solving problems. Approximately 95% of these businesses fail, highlighting the significance of problem-solving in the trucking industry and beyond.

The Four Parties in the Supply Chain System:

To understand how independent truck dispatchers get paid, we need to grasp the structure of the supply chain system in the trucking industry. This system consists of four key players: independent truck dispatchers, carriers, brokers, and manufacturers or shippers. Each party has its own set of challenges and relies on the others to address them effectively.

1. Independent Truck Dispatchers:

Independent truck dispatchers are entrepreneurs who offer dispatching services to carriers. They aim to solve problems faced by carriers, such as finding loads, building relationships, and managing logistics and paperwork. However, for successful dispatchers, it is crucial to focus on solving problems for all parties involved, not just their own. By doing so, they can earn significant profits by providing value to carriers and others in the supply chain.

2. Carriers:

Carriers are companies responsible for transporting goods from one location to another. They encounter various challenges, including driver management, load finding, and working with brokers. Successful independent dispatchers understand these challenges and offer services that alleviate them, such as efficient load matching and maintaining strong carrier relationships.

3. Brokers:

Brokers act as intermediaries between carriers and manufacturers. They face their own set of problems, including finding reliable carriers, managing customer relationships, and ensuring timely deliveries. Independent truck dispatchers who understand the broker’s challenges can provide valuable solutions that contribute to their success.

4. Manufacturers or Shippers:

Manufacturers and shippers produce goods and rely on carriers to transport their products. They often struggle with logistics management and require brokers’ services to connect them with suitable carriers. Independent dispatchers who can address these challenges become indispensable partners for manufacturers and shippers.

Understanding How Independent Truck Dispatchers Get Paid:

how independent dispatchers get paid

Independent truck dispatchers are not employees of carriers or brokers but operate as independent business owners. To get paid, they offer their dispatching services to carriers, negotiating rates based on a percentage of the carrier’s gross revenue. Generally, a standard rate is around 6% for semi trucks and 8% for LTL like hotshots and box trucks of the gross revenue generated by the carrier’s trucks.

To illustrate the payment process, let’s consider an example:

Suppose a carrier generates $40,000 in gross revenue per month with one truck. The independent dispatcher’s agreed rate is 6% of the carrier’s gross revenue. This amounts to $2,400 per month from this specific carrier. If the dispatcher prefers weekly payments, they would receive $600 every week, if the carrier makes $10k in that week.

The payment calculation is based on the agreed percentage of the carrier’s gross revenue, emphasizing that independent dispatchers earn from the gross, not the net profit. The dispatcher invoices the carrier based on the loads assigned and delivers the proof of delivery documents to justify the payment request.

The Paperwork Process:

The dispatcher’s role also involves managing paperwork throughout the transportation process. A dispatcher has to take care of Rate confirmations, Proof of Delivery papers, and forward POD to the broker when the driver delivers the load and upload the invoice on the carrier’s behalf on the factoring portal( If the carrier and their factoring company allow using the portal) and When the driver picks up a load, a dispatcher has to follow up on driver’s location and keep updating the broker, If any issue comes up dispatcher has to inform the broker about the problem and let them know a new estimated time of arrival on shippers or receivers.

Now that we understand how independent truck dispatchers get paid and the basic process of assigning loads and receiving proof of delivery, let’s dive deeper into the paperwork process.

When the driver delivers the load and obtains the proof of delivery (POD), the dispatcher needs to handle the paperwork efficiently. The POD is a crucial document that serves as evidence of successful delivery. It includes important information such as the date and time of delivery, recipient’s signature, and any special instructions or remarks.

As an independent truck dispatcher, you need to collect and organize these PODs for each load. It’s essential to keep a record of the delivered loads and maintain proper documentation. This documentation helps you reconcile payments with the carrier and resolve any discrepancies that may arise.

Once you have the PODs in hand, you will generate invoices for the carrier based on the agreed-upon percentage of the gross revenue. You can use accounting software or templates to create professional-looking invoices quickly. Include all relevant details, such as load information, dates, carrier name, and the amount due. In my opinion, Google Sheets’ pre-built invoice templates are fine, you can edit them on Google Sheets and send them to the driver’s email.

Sending the invoice promptly is crucial to maintain a smooth cash flow. Ensure that the invoice is accurate and clearly states the amount to be paid and the payment due date. Communication with the carrier is key throughout this process. Provide them with the necessary information, such as your banking details for direct deposit, and inform them of the invoiced amount and payment expectations.

It’s also essential to keep track of your invoices and payments. Maintain a spreadsheet or use accounting software like Quickbooks to monitor outstanding payments, record payments received, and reconcile them with the carrier’s statements. By maintaining accurate financial records, you can ensure that you are paid correctly and address any discrepancies promptly.

In addition to handling paperwork and managing payments, independent truck dispatchers should focus on building strong relationships with carriers and brokers. A positive and professional approach can help you establish trust and credibility within the industry. By maintaining open lines of communication, understanding their needs, and providing reliable service, you can foster long-term partnerships that benefit both parties.


Payment Methods for USA-Based Dispatchers:

For USA resident dispatchers, there are two popular payment options available: Zelle and CashApp. Zelle is often the preferred choice for carriers due to its security and user-friendly interface. To receive payments through Zelle, all you need to provide is your registered email address or U.S. mobile phone number. Carriers can then send you money via Zelle using their bank’s mobile app or the dedicated Zelle app. If you opt for CashApp, follow these steps to receive payments:

Download the Cash App app from the App Store or Google Play. Create an account and complete the identity verification process. Share your unique Cash App $Cashtag with the person who will be paying you. Instruct the person to send you money by either entering your $Cashtag or scanning your QR code. The funds will be instantly deposited into your Cash App balance, ready for use. Both Zelle and CashApp provide convenient and efficient payment methods, ensuring that dispatchers receive their payments seamlessly.

Payment Methods for Non USA Resident Dispatchers:

If you are not living in USA and working remotely from Asia or Europe or any part of world then paypal is a good option but the down side of using paypal is every driver doesn’t have paypal and paypal is not allowed in every country. So, my most preferred and easy to use method is using stripe. You just have to signup on stipe.com and you can make invoice in that and send it to your driver, in which he can put his card details and pay. You can also turn on other options to pay like Google pay, Apple Pay, and you can also attach your paypal so there will be a lot of options for driver to pay you.


What if even stripe is not allowed in my country?

If Stripe is not available in your country, an alternative option is to register a company in a country where Stripe operates, such as the UK or France. Setting up a UK Ltd company is a relatively straightforward and cost-effective process. One recommended approach is to acquire a virtual address from a reputable provider like THE LONDON OFFICE. Simply search for their website on Google, make a purchase, and obtain an address from them. Following that, proceed to register your company on the official GOV.UK website.

Once you have successfully formed your company, you can proceed to register with both Stripe and PayPal. It’s important to note that you will need to utilize Remote Desktop Protocol (RDP) to access a UK IP address. I have provided you with the initial steps, but I recommend conducting further research on this process through YouTube tutorials to gain more in-depth knowledge and guidance.

By providing value, demonstrating expertise, and consistently delivering excellent service, you can position yourself as a trusted partner and increase your chances of success in the trucking industry. Remember that each party in the system has its own unique set of problems, and by addressing those problems effectively, you can earn not just a little money but a substantial income.

In conclusion, the trucking industry operates within a system called the supply chain, which includes independent truck dispatchers, carriers, brokers, and manufacturers. Independent truck dispatchers offer their services to carriers and earn a percentage of the gross revenue generated. By efficiently managing paperwork, invoicing, and maintaining strong relationships, dispatchers can thrive in the industry.

Remember, it’s a journey that requires continuous learning, adaptation, and dedication. Embrace the challenges, seek opportunities for growth, and always strive to deliver exceptional service. With the right mindset and a commitment to excellence, you can thrive as an independent truck dispatcher and contribute to the smooth functioning of the supply chain.

Thank you for reading, and I wish you the best of luck in your journey as an independent truck dispatcher!

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