A dispatcher-carrier agreement should spell out exactly what the dispatcher does, how and when they get paid, and that the carrier stays in control of which loads it accepts. The red flags are vague services, fees with no clear basis, a dispatcher who takes payments from brokers, and broad signing power the carrier can't take back. This guide walks through the clauses to look for, written for carriers and independent dispatchers. It is general information, not legal advice. To draft one for review, use the free dispatcher-carrier agreement generator.
A note on broker authority first
There is no federal license called "dispatcher." In its June 2023 guidance, Definitions of Broker and Bona Fide Agents, FMCSA said there is no statutory or regulatory definition of a dispatch service, and that a dispatch service may be classified as either a broker or a bona fide agent depending on the nature and scope of its activities. FMCSA described this as a fact-specific analysis and said the more control a carrier has over the dispatcher's actions, the less likely the dispatcher is to need broker authority.
The guidance lists factors that generally point to a bona fide agent (no broker authority needed) and factors that point to needing broker authority. Among them:
- Pointing toward bona fide agent: a written contract with the carrier appointing the dispatcher as its agent, which should specify insurance and liability responsibilities; going through brokers rather than soliciting shippers; being paid by the carrier under the written agreement, not by the broker or factoring company; staying out of the money between broker and carrier; and not reassigning the load to another carrier.
- Pointing toward needing broker authority: negotiating freight directly with a shipper; taking compensation from a broker or factoring company; accepting a load without a truck and then looking for one; allocating a load between several carriers it has agreements with; being a named party on the shipping contract; or soliciting the open market of carriers to move a shipment.
Both lists are non-exclusive, and how they apply depends on the facts. If you are setting up a dispatch business or signing with one, read the full guidance and consult qualified counsel about whether broker registration applies to your situation. A well-written agreement helps document the relationship, but it does not decide that question on its own.
Key clauses to look for
1. Parties and appointment
Name the carrier (with its legal name, MC and USDOT numbers) and the dispatcher. State that the carrier is appointing the dispatcher to act on its behalf for the listed services. This lines up with the written-contract factor in FMCSA's guidance.
2. Scope of services
List exactly what the dispatcher does. Common examples: searching load boards, negotiating rates with brokers, booking loads the carrier approves, handling broker setup packets, sending paperwork, and tracking. Also list what the dispatcher does not do. A vague "all dispatch services" line is a red flag because neither side knows what was promised.
3. Carrier keeps control of load acceptance
The agreement should say the carrier decides which loads to accept or reject, and can set its own lanes, minimum rates, home time, and equipment limits. The driver should never be forced onto a load. This matters for safety and hours-of-service, and FMCSA's guidance treats carrier control as relevant to the broker question.
4. No broker authority unless licensed
Look for a clause stating the dispatcher is not acting as a broker, will not hold itself out as one, will not solicit shippers, and will not reassign loads to other carriers, unless the dispatcher actually holds broker authority and the parties have agreed to that separately.
5. Authority to sign rate confirmations
Many carriers let the dispatcher sign rate cons on their behalf. If so, the agreement should say exactly what the dispatcher may sign, any limits (for example, only loads the carrier approved, or only above a minimum rate), and how the carrier can revoke that permission. Be careful with a broad power of attorney: it can allow far more than signing rate cons. Limit it to what is needed and make it revocable in writing.
6. Fees
State how the dispatcher is paid: a percentage of the load's gross linehaul, a flat fee per load, or a weekly flat fee. If it is a percentage, say what it is calculated on (linehaul only, or including fuel and accessorials) and whether it applies to TONU or detention pay. Red flags: fees with no stated base, extra "admin" or "setup" charges that aren't listed, or a fee owed on loads the carrier booked itself.
7. Payment timing and method
Say when the dispatcher invoices the carrier (per load, weekly) and when the carrier pays. FMCSA's guidance lists being paid by the carrier under the written agreement, rather than by the broker or factoring company, as a bona fide agent factor. A clause letting the dispatcher collect freight payments from brokers, or redirect them, is something to raise with counsel.
8. Carrier responsibilities
The carrier keeps its own operating authority, insurance, equipment, drivers, safety compliance, and hours-of-service. The agreement should say that clearly, and should require the carrier to send updated insurance certificates and to tell the dispatcher about equipment or driver availability changes.
9. Insurance and liability
FMCSA's guidance says the written contract should specify the insurance and liability responsibilities of the dispatch service and the motor carrier. Spell out who carries what, and how claims or losses connected to the dispatcher's mistakes are handled. Have counsel review any indemnification language.
10. Term and termination
State the start date, whether the agreement renews, and how either side can end it (for example, written notice with a set number of days). Address loads already booked at termination and the final fee settlement. Red flags: long lock-in periods, early termination fees, or no way out.
11. Confidentiality
The dispatcher sees the carrier's rates, broker contacts, insurance, and banking details. A confidentiality clause should cover that information during and after the agreement and say what happens to it at the end.
12. Non-solicitation
Some agreements stop the dispatcher from recruiting the carrier's drivers, or stop the carrier from hiring the dispatcher's staff. Make sure any restriction is limited in time and scope, and check with counsel because enforceability varies by state.
13. Disputes and governing law
Say which state's law applies, where disputes are handled, and whether the parties must try to resolve issues informally first or use mediation or arbitration. Also state how fee disputes on a specific load are raised.
Red flags at a glance
- No written agreement at all
- The dispatcher can accept loads without the carrier's approval
- The dispatcher collects payment from brokers or controls the carrier's factoring
- Unlimited power of attorney with no way to revoke it
- Fees with no stated basis, or hidden extra charges
- The dispatcher contacts shippers directly or reassigns loads to other carriers
- Long lock-in with penalties for leaving
- No mention of insurance or liability responsibilities
Checklist before signing
- Both parties are named correctly, with the carrier's MC and USDOT numbers
- Services are listed specifically, including what is excluded
- The carrier keeps the final say on every load
- Rate con signing authority is limited and revocable in writing
- The fee basis, amount, invoicing, and payment timing are clear
- The dispatcher is paid by the carrier, not by brokers or factoring companies
- Insurance and liability responsibilities are spelled out
- Termination terms and handling of booked loads are clear
- Confidentiality and any non-solicitation terms are reasonable
- The dispatcher's broker-authority status has been discussed with counsel if in doubt
Once you have a signed agreement, the dispatcher will usually handle the carrier's setup with each broker. See the carrier packet checklist for what brokers typically ask for, and broker-carrier agreement basics for the contract the carrier signs with each broker.