If you are interested in learning how to become a truck dispatcher, but don’t know how to get started, you are in the right place.
In this article, I am going to cover step-by step how you can start your own truck dispatching business. It’s geared toward complete beginners, so I’ll be covering the basics in a way that will be easy to understand and follow.
I will begin by answering introductory questions like what is a truck dispatching business, can it be done from home, how much can you make doing this, what are the expected start-up costs, and so on.
I’ll then tackle the actual steps to setting up this business, including business entity formation, licenses, funding, marketing and more. Finally, I’ll close by going over some of the pros and cons of truck dispatching so you have a grounded understanding of what’s really involved in starting this type of business.
We’ve got a lot to cover, so let’s get into it.
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The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
What Is A Truck Dispatching Business?
A truck dispatching business is a business that manages freight on behalf of a carrier, which may be an individual trucker operating as an owner-operator or a larger enterprise, such as a trucking business that owns a fleet of vehicles. This business finds loads for the carrier using load boards, connections with brokers and shippers, and other methods for securing loads.
The truck dispatcher conducts negotiations for the load and ultimately dispatches drivers and sets up routes.
It’s important to note that truck dispatchers are different from freight brokers. A truck dispatcher exclusively represents and works on behalf of carriers, while a freight broker acts as a middleman between shippers (or manufacturers) who need freight delivered and carriers who are willing to deliver the freight.
Freight brokers may represent both sides, while a truck dispatcher may only represent carriers.
Can I Run a Truck Dispatching Business From Home?
You can run a truck dispatching business from home because the key tasks involve finding loads on your computer, calling and negotiating with shippers, and handling various administrative responsibilities such as setting up routes with drivers and recordkeeping, all of which may be done in the comfort of your home.
To do this, however, you will need some basic equipment, such as a computer, printer and phone, and a suitable space in your home for operating the business.
How Much Do Truck Dispatchers Make?
According to Ziprecruiter, independent truck dispatchers make on average $66,012 per year, with the low end of the range starting at $20,500 and the high end capping off at $273,500.
That’s a wide range, and how much you actually make will vary based on many factors, including how much you charge carriers for your services, how many carriers you represent, the number of loads you provide, and your marketing and other operating expenses.
How Do Truck Dispatchers Make Money?
Truck dispatchers generally get paid by taking a percentage of earnings from each load they find for their clients. Although some dispatchers may change a flat fee, most will require a percentage of the take, which is typically between 5%-10% for each load.
How Much Does It Cost to Start a Truck Dispatching Business?
Starting costs for a truck dispatching business run from $1,000 to $2,500, which is modest compared to many other business. That’s because this type of business can be operated from home with basic equipment that most people already have.
What Do I Need to Start a Truck Dispatching Business? [Incl. Cost Breakdown]
To start a truck dispatching business you will need certain equipment and tools (including data management tools and load boards). These include a computer, printer, phone, office supplies as well as online subscriptions to Transportation Management Software (TMS) and load boards.
Computer or Laptop: Depending on what type of computer you get, you are talking anywhere between $300 – $1,000 for a reasonably priced computer. You probably already have one though, so most folks will be able to ignore this cost.
Printer: You can get a basic printer for anywhere between $150 to $300, although if you shop around you can score some that are cheaper than that.
Phone: I assume you have a phone, but you should get a dedicated business line. You can get one for cheap through Google Voice for like $10 per month.
Business Set Up Costs: If you choose to operate an LLC or other business entity, there will be costs associated with that and there may be permits and licenses you need to get from your state or other governmental entity that can also carry some cost. Additionally, if you set up a website for your business and decide to market your business, those activities will also cost you some money.
All in, you can expect to spend around $500 or so for these types of costs, although the scope and type of marketing can significantly increase that amount.
Online Courses: If you choose to invest in a truck dispatching course, this will bump up your costs a little. I have found courses on Udemy that are under $20, but most online courses I found range between $150 to $400.
Transportation Management Software: This is software that helps you organize all of your dispatch information and is a key tool to help you keep everything straight in your truck dispatching business. In general, this type of software runs between $100-$200 per month.
Connect Team is a cheaper option for a truck dispatcher because it won’t include a lot of the functionality that a freight broker uses, but still offers pretty good options to run your business efficiently. As of the date of this writing, plans run from $30 to over $100.
Basic Office Supplies: These are things like paper, pens, staplers, and so on. All in, you are talking about $20.
Load Board: One of the best ways to find loads for your clients is by searching through load boards. To find the best and highest paying loads, you should invest in a quality load board subscription. For a premium load board, you are looking at around $40 per month for a basic subscription.
My Load Board Recommendation:
If you don’t know where to start, DAT is a clear market leader, with approximately 1.37 million loads posted daily (including tons of flatbed loads as well).
Due to their immense size and scope, they are able to offer leading edge tech and info, including unlimited searching, instant alarm match notifications, broker credit scores, days to pay, market rates, mileage routing and much more.
Despite their dominant place in the market, I think their pricing is reasonable and it’s actually in line with other premium paid load boards. As of this writing, DAT offers the following plans:
- DAT TruckersEdge: Standard ($45/month) – includes unlimited truck posts and load searches, load match alarms, month to month billing, mileage and routing features, broker credit data and load counts by state.
- DAT TruckersEdge: Enhanced ($85/month) – includes all standard features plus the ability to call and search for loads (for when you are on the road), and average rates for lanes you are searching (30 day).
- DAT TruckersEdge: Professional ($135/month) – includes all Enhanced features plus average rates for past 15 days, access to Tri-Haul (which suggests higher paying routes with triangular route suggestions), DAT Assurance (which helps you collect past due accounts), and North American database (which includes Canadian loads)
There are higher tier plans available for companies with multiple trucks (Power Select Carrier) and multiple dispatchers (Power Office Carrier).
I have an affiliate relationship with DAT and secured a deal where if you use my link, you can get a free 30 day trial for any of their plans. So, you get to try out this industry-leading load board for a full month for free. I would note that this deal is only for new subscribers. Moreover, you have no long-term commitments, so you can cancel your subscription at any time.
Simply click on the banner below to take advantage of this no-risk offer.
How to Start a Truck Dispatching Business in 7 Simple Steps
Ok, now that we’ve got the introductory stuff out of the way, let’s get into the nuts and bolts of setting up your truck dispatching business.
Step 1: Get Trained As a Truck Dispatcher
Before you start any meaningful enterprise, it’s always a good idea to understand the business and how it operates. One of the best ways to do this is first hand experience. So you may want to get trained as a truck dispatcher by working for a truck dispatching company or freight broker.
You will learn the ins and outs of the business, including how to navigate a load board, how to negotiate loads, how to set up efficient routes, and more. Plus you will get paid in the process!
Of course, once you become familiar with how this all works, you can confidently strike out on your own.
If you don’t have the time or desire to do this preparatory work, you can look into a truck dispatching course. There are many out there and a simple Google search will yield a lot of options for you to explore. In my view, a course is never as good a real world experience, but it’s probably a whole lot better than diving into the business blind.
Step 2: Get Appropriate Licenses in Place [Do You Need a License to Be a Truck Dispatcher?]
Although you will generally not need a formal or special license to operate as a truck dispatcher, your state may require a general business license if you are going to be operating a commercial enterprise.
You should check your state and local laws to find out for sure what you will need.
Now the story is different if you are operating a freight brokering business. Freight brokers involved in interstate commerce need to get their broker authority from the Federal Motor Carrier Safety Administration (FMCSA) and will need to meet other highly regulated requirements.
Step 3: Set Up Your Truck Dispatching Business
Select Your Business Name and Logo
The first step in establishing your truck dispatching business is selecting a name and logo that you like.
Having trouble figuring out a name? Try Shopify’s business name generator. It’s free.
As for a logo, you can go on canva.com and check out some of their logo templates and start from there. It’s a free option, but you will need to customize the logo templates to your liking. If you prefer a more ready-made solution, you can pay a little bit and outsource this.
I like Looka. They are an AI-powered platform that will provide you a professional looking logo at reasonable prices.
Note: You want to make sure your name and logo are original to you and are not going to infringe someone else’s intellectual property. If you are unsure, you can check the USPTO’s trademark search tool as a starting point.
For more great strategies and tips on how to select the right name and logo for your business, check out my full article on the topic: How to Choose a Company Name and Logo [16 Key Strategies and Tips].
Create a Website For Your Truck Dispatching Business
Don’t neglect this step. Your business needs a website, period. Especially if you want potential customers to find you online.
Your website doesn’t have to be incredibly fancy or cost a lot of money to set up. There are a lot of resources available to help you with this.
In fact, Google allows you to build your first business profile website for free.
List Your Truck Dispatching Business So Customers Can Find You
It is also important to get your fledgling business on Google. You can do this by listing it on Google My Business. This way, people who are searching for a truck dispatching business in your local area can find you.
If you want to learn more about how to do this, check out this tutorial from Google.
Set Up Your Business Entity
You may want to set up a business entity like an LLC, corporation, or partnership for your truck dispatching business. Why do this? In most cases, setting up a business entity can help shield some of your assets held outside the business entity if there is a claim against the business.
If you want to make the investment of setting up a corporation, LLC, or some other business entity, you can hire a lawyer to help you, or you can use many of the online resources that can help you set up your business entity. For a handy table comparing the different types of business entities, check out my ultimate guide to starting a business.
I like using an online service called Incorporate because they can get you up and running quickly and easily. They also have some great resources to educate on what type of entity to choose and which may be the right state to choose for your new entity. If you want to learn more, check them out below.
Note: This can be a fairly complicated area and you don’t want to make mistakes, so you may want to consult with your legal and financial advisors to make sure you understand the implications of setting up a business entity.
Step 4: Open Up A Business Checking Account and Credit Card
You should open a dedicated checking account in the name of your truck dispatching business. Make sure to run all business revenue and expenses (and only business revenue and expenses) through that account. This is especially important if you have a formal legal entity like a corporation or LLC because you do not want to mingle personal assets and expenses with business assets and expenses.
Why? Because you may risk losing the liability protection we discussed earlier if the business entity is deemed a sham because you did not treat it like a separate legal entity.
On a more practical note, having a separate account keeps things tidy from a recordkeeping and accounting perspective. It will definitely make things easier come tax time. It also signals credibility and professionalism when you write a check from your business account or ask someone to pay to your business account.
If you don’t know where to get started, check out Novo.
They are perfect for new small businesses because they offer no monthly fees or minimum balances, and give you unlimited ATM fee refunds. On top of that, they give you access to tons of other free perks, like major discounts on places like Stripe, Quickbooks and Google Ads.
In my opinion, they are one of the best options in the market.
Now, let’s turn to business credit cards. Credit cards can be really helpful to a new truck dispatching business, especially if unexpected expenses pop up or you want to expand.
First, they are often easier to qualify for than a line of credit, especially when you are a brand new business. Even if you don’t need to use it right away, it’s nice to have the funds available in a pinch. Second, it’s a great way to build your business credit rating, which will come in handy if you need to apply for a loan in the future to expand your business, etc.
Step 5: Buy Necessary Equipment and Software
As we discussed, you will need to purchase certain equipment and subscriptions and we covered in a lot of detail exactly what you’ll need. Hunt around for the best deals and set everything up properly so you can have a successful launch.
Step 6: Market Your Business
A good marketing plan is critical to your business’ success.
After all, if no one knows that your business exists, you may as well pack it up because no one will be buying anything from you. So what are some of the best ways to spread awareness and keep the customers coming in?
In today’s market, you cannot ignore online marketing. If you don’t know how to start, do the following:
- Set up a Google My Business, so that people looking for your type of business can find you. You want to encourage people to leave good reviews there for you if they like your business. Research has found a strong relationship between the number of online reviews a business and the revenue that it generates.
- Get a great website that draws traffic to your business. You can use the free website offered by Google that we mentioned earlier, but if you really want to draw traffic (and customers) to your website, you may want to hire an online marketing expert to help you optimize your website for traffic and leads.
- Get on Yelp for business and let your customers find you. They are an extremely well-known brand, and many people look there when searching for local businesses. Check them out below to learn more.
- In addition to advertising on Yelp, you can buy online ads from other online and social media outlets (Facebook, etc.)
If you have connections with people in the trucking industry, word of mouth is a great way to drum up business. Reach out to folks and ask them to refer people to you.
You can also research what your competitors are doing when it comes to marketing their products or services and learn from them.
Ultimately, you want to experiment with various marketing strategies – you may be surprised at what works best.
Step 7: Get Insurance in Place
As a truck dispatcher, you will want to be adequately protected against claims if things go sideways in your business. Thus it is important to get appropriate insurance for your business.
Now because you are not operating the trucks, you will not need the same type of liability and cargo insurance that your carriers will be required to hold, but a general business insurance policy may make sense.
So there you have 7 simple steps to starting your truck dispatching business and some great tips on how to implement each of them. If you are looking for other great business ideas in the transportation sector, check out my article on Transportation Business Ideas That Work, where I discuss more than 30 amazing business ideas in the transportation and trucking industry.