Dispatch service agreement: what should be in it
A dispatch service works on your behalf: it talks to brokers in your name and books loads your truck has to haul. That only works with a written agreement. A good one is short, plain and fair to both sides. If a dispatcher won't put things in writing, or sends a contract you can't follow, that tells you a lot before the first load.
This guide lists what the agreement should cover and the red flags to look for. It is not legal advice; for anything you are unsure about, have a transportation attorney read it.
Why the agreement matters, not just the handshake
In June 2023 FMCSA published guidance on when a dispatch service is acting as the carrier's agent and when it is acting as an unlicensed broker. The carrier's control is the key point. According to a summary by the law firm Benesch, signs that a dispatcher is behaving like a broker include dealing directly with shippers, handling the money between the broker or factor and the carrier, arranging loads without a written contract, accepting loads first and finding a truck later, and choosing among several carriers for a shipment.
A clear agreement protects you here. It shows that the dispatcher works for you, on your loads, for a fee you pay.
1. Who the parties are
Your legal business name exactly as on your FMCSA registration, your MC and DOT numbers, and the dispatch company's legal name and contact details. If you run more than one authority, each one should be named, or each gets its own agreement.
2. What the dispatcher does
A plain list: searching load boards, negotiating rates, broker setup (sending your carrier packet), handling rate confirmations, check calls, collecting POD, sending invoices or factoring submissions. Also what is not included, for example IFTA, permits or compliance filings, so nobody assumes.
3. That loads are only for your truck
The agreement should say the dispatcher books loads for your authority only and never re-brokers or hands your loads to another carrier. This is one of the points the FMCSA guidance is built on.
4. Who approves and who signs
Can the dispatcher sign rate confirmations for you, or do you sign every one? Many carriers give the dispatcher signing authority to save time, but then the agreement should say it is limited to loads you approved (by text, call or app). Write down how approval is given so there is no argument later.
5. The fee, and what it is calculated on
Dispatch fees are usually either a share of the load's gross or a flat amount per week or per truck. Whichever it is, the agreement should say:
- what counts as "gross": is detention, layover, TONU or lumper reimbursement included or not
- when the fee is due: when the load delivers, when the broker pays, or weekly
- what happens if the broker never pays: is the fee still owed
6. How the money moves
Brokers or your factoring company should pay you, and you pay the dispatcher. Be careful with any arrangement where broker payments land in the dispatcher's account first. Under the FMCSA guidance that points toward brokerage, and in practice it means your money is in someone else's hands.
7. Your rules
Your minimum rate per mile, lanes you won't run, states you avoid, home time, maximum deadhead, who decides on weekend loads. Write them down once. "No forced dispatch" should be stated: you can refuse any load without penalty.
8. Access and data
Which accounts the dispatcher can use (their own load board accounts or yours, your factoring portal, your email), and that access ends when the agreement ends. Who keeps the documents: rate cons, BOLs and PODs should stay available to you.
9. Term and termination
How long it runs, and how either side can end it. A reasonable agreement lets you leave with short written notice, says what happens to loads already booked, and states the final fee settlement. Long lock-ins or big exit fees are a warning sign.
10. Non-solicitation, fairly written
Some agreements stop the carrier from working directly with brokers the dispatcher introduced. A limited version is normal. One that bans you from your own broker relationships for years is not.
11. Insurance and liability
Your insurance covers your truck and cargo; the dispatcher's does not. The summary of the FMCSA guidance says the contract should spell out each party's insurance and liability responsibilities. It should also say who is responsible if the dispatcher makes a mistake, for example books a load the truck is not legally able to haul.
Red flags
- No written agreement, or "we'll sign later"
- Broker payments go to the dispatcher first
- The fee is charged on detention and lumper money that is a reimbursement, not revenue, without saying so up front
- Forced dispatch, or penalties for refusing loads
- A long minimum term or a large cancellation fee
- The dispatcher also "has a truck" for loads you turn down
The short version
Get it in writing before the first load. Make sure it says the dispatcher works only for your authority, you get paid directly, you approve every load, the fee and its base are clear, and either side can leave cleanly.