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Is Independent Dispatching Legal?

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Is Independent Dispatching Legal?

Yes, No, Maybe So...

All kinds of people have differing opinions as to the legality of independent dispatching. There are black and white areas but also many grey areas in freight dispatching. And some people are urging the Federal Motor Carrier Safety Administration (FMCSA) to more specifically define the grey areas. In the meantime, discerning what is and is not legal falls into the hands of industry participants' individual interpretation of FMCSA regulations. This leads to unintentional and intentional activities that either flirt with or violate Department of Transportation (DOT) rules. 

This may be TL;DR for some so here's a quick synopsis:

FMCSA is scheduled to issue guidance in November 2022 on dispatching services. Transportation Intermediaries Association (TIA) asked that dispatchers only be allowed to work with one motor carrier. Owner-Operator Independent Drivers Association (OOIDA) asked that the definition not change but rather focused their attention on double brokering. Dispatching is legal and will remain legal. A specific definition of dispatching is possible around topics such as dispatcher compensation, specifically as a percentage of a load, and decision-making when working with multiple carriers. Clerical work is not in question.

What is 100% legal dispatching?

Whether a dispatcher is an employee (W2) or contractor (1099), helping a carrier with administrative tasks and paperwork is unquestionably legal. Acting as a communications manager for Proof of Delivery (POD) is commonplace and perfectly fine. Transmitting Bill of Lading (BOL) information is also fine. Clerical tasks on behalf of motor carriers to remain compliant with taxes and fees are appropriate. Great dispatchers may even help carriers evaluate operating costs and forecasts. And helping a driver to get paid by a freight factoring company is not violating regulations. Naturally, elements of trip planning support are safe activities too. Lastly, there is no concern if a dispatcher works exclusively with just one carrier.


Truck Driver Power (TDP) is seeking input from independent dispatchers.

If that's you, would you book a time to talk, please?

I'll Help TDP


The grey areas of booking loads and getting paid...

Things get murky fast with booking freight for a carrier. Specifically, in the FMCSA's definition of a "Bona fide agent" in 49 CFR 371.2(b). These are "persons who are part of the normal organization of a motor carrier and perform duties under the carrier's directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others."

Generally, it is acceptable for a dispatch employee or contractor to communicate with freight brokers. If the carrier gave the dispatcher "power of attorney", then this area becomes clearer but some folks don't know to have this in place. Repeatedly the question of ignorance or intent is at the root of some legality concerns. There are entrepreneurial Americans working very hard to do right by all parties and unwittingly stumble into trouble without realizing it. Unfortunately, there are also schemers who very wittingly engage in dirty tactics, some of which are outright illegal and others are not in the spirit of laws. Regardless, ignorance is not a defense in the court of law and bad actors are spoiling the hard work of some of America's finest supporters of truckers.

Contract dispatchers (a.k.a. independent dispatch) regularly work for multiple carriers to keep busy and generate enough money to cover costs. This is a major point of contention by the Transportation Intermediaries Association (TIA), which is a trade group supporting freight brokers. It seems TIA feels that dispatch services working for more than one motor carrier violate a bona fide agent's preclusion from allocating traffic between the carrier and others. TIA's public petition for rulemaking to the Department of Transportation (DOT) said:

"TIA believes the Agency should publish regulatory guidance explaining that the legal duties of a dispatch service allow them to be an agent for one motor carrier, and that anything further requires a brokerage license and compliance with the financial responsibility requirements applcable to brokers."

And it seems bad actors are again at the root of concern for brokers. Liability issues and Service Level Agreements (SLA) are put in place among motor carriers, brokers, shippers, and other parties. Some contractors will make false promises and mislead interested parties into thinking a motor carrier will cover a load only to later switch that motor carrier without notice nor approval. Inherently this increases risk factors and could put multiple regulated parties out of business should things go south with the load. But again, this is not how the majority of dispatchers operate as it puts them and their customers at great risk. 

The FMCSA's 7th question in a request for comments dealt with this issue directly by asking "if a dispatch service represents more than one carrier, does this in and of itself make it a broker operating without authority?" And the Owner-Operator Independent Drivers Association (OOIDA) commented with this answer saying:

"No, representing more than one carrier as a dispatch service or bona fied agent does not automatically constitue brokering without authority."

The Intermodal Association of North America (IANA) answered question 7 simply with a "yes".

The most challenging grey area resides in how an independent dispatcher interacts with a load among multiple carriers that are positioned in the same location at the same time with the same equipment and creditworthiness. 49 U.S.C. 13102(2) defines a broker as a “person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” The act of checking with a carrier for interest and availability is not advertising nor soliciting but could be viewed as a subtle nuance.

Picking one customer among many is an age-old dilemma that is not unique to dispatching. How any company evaluates giving a deal, project, contract, load, or trade to a set of equally qualified customers is hard. A cynical view would assume that a dispatcher does not make the most equitable decision but that assumes all drivers are equal in every way besides a dispatcher's profit margin. The reality on the ground is that business is not so simple. For example, what if a load has an element of time sensitivity? It may be in all parties best interest for the dispatcher to call the most responsive driver rather than a typically unresponsive driver who has been waiting longer. These microdecisions add efficiency and in the long run generate high-quality service levels from dispatchers. Low-quality service levels will run a dispatcher out of business quickly. Unquestionably, a dispatcher should be careful not to take a load from a broker without a specific motor carrier in mind and with the intent to solicit that load to multiple motor carriers at the same time. 

Some people disapprove of a dispatcher charging a carrier based on a percentage of the load because that bumps up against the FMCSA's 49 CFR 371.2(a) definition of a broker being a "person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier." Though it is worth noting that bone fide agent is excluded here when they are legally bound, which emphasizes the importance of having power of attorney. 

What is 100% illegal dispatching?

A contract dispatcher (1099), cannot directly handle money between a shipper and a motor carrier without a freight brokerage authority. OOIDA put it plainly in their FMCSA comment by saying:

"If money is exchanged directly between shipper and motor carriers, then there is no brokered transaction. If money is directly handled by an intermediary between the shipper and the motor carrier, then the intermediary is conducting a brokered transaction. If an intermediary is not directly handling money between a shipper and a motor carrier, then they should not be considered a broker."

This is where things stand now

The FMCSA closed the comments period for Definitions of Broker and Bona Fide Agents. on July 11, 2022. There were 84 posted comments before the deadline. In response to the Infrastructure Investment and Jobs Act (IIJA) Section
23021 (page 349 of 1039), FMCSA is required to issue guidance by November 15, 2022. 

Please do not consider any of this legal advice. I am not a lawyer. If you have concerns, please seek legal counsel. 


Truck Driver Power (TDP) is seeking input from independent dispatchers.

If that's you, would you book a time to talk, please?

I'll Help TDP


Please comment below and share any questions, issues or concerns with this blog. It would be great to hear from you. 

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