Outsourcing Truck Dispatching
As the freight recession deepens, many carrier companies are turning to outsourced truck dispatching as an alternative to domestic companies.
Finding qualified workers who understand the trucking and logistics can be hard, especially when considering entrusting a third-party service provider.
This article explores the value proposition offered by outsourcing dispatch services to truck carrier companies interested in outsourcing their dispatch operations.
English Proficiency
Dispatchers with outsourcing companies often have limited English fluency. Because they operate in non-English speaking environments, simple misunderstandings can be costly in this business.
Overseas dispatch services
They always rely on internet phones, which can fail for hours or even days, potentially leaving you without crucial support when you need it most.
Personalized Service
While you will have a dedicated dispatcher, time differences mean you may end up working with a duty dispatcher 20% to 30% of the time.
This duty dispatcher handles multiple drivers and may not be familiar with your specific situation, leading to less personalized and attentive service.
Dispatchers in Outsourcing
Though there are experienced dispatchers with comprehensive training in all aspects of trucking operations, they are often overwhelmed with other drivers.
Due to high staff turnover, the likelihood of getting an inexperienced dispatcher is high.
High turnover is a sad reality of outsourcing companies, as few people can sustain working late nights and sleeping during the day for long periods.
They often work overtime for low salaries to keep dispatch service fees low.
This demanding schedule makes it harder for dispatchers to understand driver needs deeply and solve problems effectively.
Believe it or not, people get tired very quickly working at night and sleeping during the daytime.
Outsourcing Dispatch Services: A Cautionary Note
- I would avoid using outsourced dispatch services.
- Reliability issues are common with overseas dispatch services without backup in the US.
- Only US-based dispatch service companies with local backup are trustworthy.
Low Dispatch Service Fees
Outsourcing often offers attractive low dispatch service fees.
Pros: You might save some money if the dispatch service is high quality.
Cons: You could lose more than you save if the dispatch service is of low quality.
Unfortunately, in this equation, the cons often outweigh the pros.
- Average Fee:
- The standard dispatch service fee in the US is around 10%.
- Reducing this fee means dispatchers need more trucks to maintain their income, which can compromise service quality and your earnings. This is why experienced dispatchers rarely lower their fees.
Examples of Dispatch Service Quality:
- High-Quality Dispatch Service:
- A good dispatcher can increase a $500 load to $600.
- After a 10% fee: $600 – 10% = $540 to you.
- Low-Quality Dispatch Service:
- An outsourced dispatcher might book the same load at $500 without increasing the price.
- After a 5% fee: $500 – 5% = $475 to you.
- The difference between a good and bad dispatcher is significant: $540 – $475 = $65.
- You can earn more paying a 10% fee to a good dispatcher than a 5% fee to a bad dispatcher.
And that’s not even considering the numerous other issues associated with low-quality dispatch services.
Potential Consequences of Choosing the Wrong Dispatch Service Company:
Poor quality services, despite their low fees, can jeopardize your business.
Overseas dispatch services always rely on internet phones, which can fail for hours or even days, potentially leaving you without crucial support when you need it most.
Inexperienced dispatchers your company is too valuable to entrust to inexperienced hands.No low-cost dispatch service fee is worth it.
You’ll end up with lower earnings, and it could potentially drive you out of business.