Flat fee dispatch vs a percentage of gross: which one costs you less?

The two ways dispatchers charge

Most truck dispatchers charge in one of two ways. A percentage of the gross on each load you haul, or a flat fee, usually per week and sometimes per load. Some mix the two, like a lower percentage plus a small weekly charge. On paper, flat fee dispatch can look cheaper, because a fixed number feels smaller than a percentage of a big load.

Neither model is a scam and neither is automatically better. They suit different kinds of carriers. The honest way to compare them is in dollars over a real month, with your own weeks in it, including the slow ones and the ones you take off.

One thing to say up front: we charge a percentage, so we have a side in this. We've tried to lay out the math so you can check it yourself, and we'll tell you when a flat fee is likely the better deal.

The crossover: where each model wins

Put in a flat weekly fee you've been quoted and a percentage. The chart shows both fees across a range of weekly gross. Where the solid line is lower, the percentage costs less. Where the dashed line is lower, the flat fee does. The yellow pin is the crossover.

The crossover math is simple: flat fee divided by the percentage. At 5%, a $250 flat fee crosses at $5,000 a week, a $300 fee at $6,000, a $400 fee at $8,000. These are EXAMPLE fees to show the math, not quotes from anyone.

Now think about your actual year, not your best week. Most owner-operators don't gross the same amount every week. There are breakdowns, slow markets, holidays and weeks at home. A flat fee charges for every one of those weeks. A percentage charges nothing for a week with no loads and less for a thin week.

Who each model tends to fit

• +A percentage tends to fit owner-operators on spot freight with uneven weeks, new authorities still building a steady flow, box trucks and hotshots with smaller loads, and anyone who takes regular weeks off.
• +A flat fee tends to fit carriers with high, steady weekly gross, like long-haul trucks running full weeks on good lanes, or fleets with predictable contract freight, where the percentage on big weeks would add up to more than the flat amount.
• +Either can fit a carrier in between. The way to know is to put three or four of your recent real weeks through both and add them up.

In that EXAMPLE month, the percentage costs less even though week 1 was a strong week. Swap in four strong weeks with no time off and the flat fee wins. Your own weeks decide it.

What each model includes, and what to ask in writing

Comparing fees only makes sense if you're comparing the same service. A low flat fee that leaves out half the work isn't cheaper. Before you sign with any dispatcher, percentage or flat, get answers to these in writing.

• +What the fee is calculated on. Gross load revenue, linehaul only, or something else? Does it apply to detention and other accessorials?
• +What's included. Load searching, negotiating, broker setup, check calls, paperwork, detention claims, invoicing help, weekly reports, nights and weekends.
• +What's extra. Setup fees, onboarding fees, charges per load booked, fees for paperwork services or factoring setup.
• +Minimums. Is there a minimum weekly or monthly charge, even if you don't haul?
• +Contract length and exit. How long you're committed and what it costs to leave.
• +Who approves loads. Can they book loads without your yes? Who signs the rate confirmation?
• +Where the money flows. Does the broker pay you directly, or does anything pass through the dispatcher?

That last question matters more than the price. A dispatcher, flat fee or percentage, should never collect your freight payment or take a cut from the broker. If anyone's pay depends on a margin between what the broker pays and what you get, they're acting more like a broker than a dispatcher.

Compare in cents per mile

Carriers think in rate per mile, so put the dispatch fee in the same terms. Take a typical week's fee and divide it by that week's total miles, loaded plus empty. A $300 flat fee over 2,500 miles is 12 cents a mile. A 5% fee on a $2.40 per mile load is 12 cents a mile on the loaded miles.

Seen that way, the two models often cost about the same in a normal week. The difference shows up at the edges: big weeks favor the flat fee, thin weeks and weeks off favor the percentage. The fee breakdown shows our fee in cents per mile at each tier.

Our pricing, plainly

We charge a percentage of the gross on loads you haul: 5% for one truck with authority 6 months or older, 7% for a new MC under 6 months, 26 ft box trucks and hotshots, and 4% for two or more trucks while the fleet rate lasts.

No setup fee, no minimum, month-to-month, cancel with 30 days notice. You approve every load, and the rate confirmation comes to you either way. If your weeks are steady and big enough that a flat fee clearly beats that, we'd rather you know it than sign with us for the wrong reasons.

How to compare two real quotes side by side

Say you have two quotes in hand: one dispatcher at a percentage of gross, another at a flat weekly fee. Here's a quick way to compare them that takes ten minutes and uses only numbers you already have.

First, pull your last eight weeks of gross from your settlements or invoices, including the weeks with no loads. Second, work out what each quote would have cost you in each of those weeks: the percentage times that week's gross, and the flat fee for every week, empty ones included, unless the flat-fee dispatcher puts in writing that idle weeks are free. Third, add any extras each quote mentioned, like setup fees or paperwork charges. Fourth, compare the eight-week totals.

Then do one more pass with the service in mind. If one quote includes detention claims, carrier packets and night coverage and the other doesn't, the cheaper fee may not be the cheaper deal. The fee only matters next to what it buys and how much of your own time it saves.