My first job when joining the world of asset-based transportation was working as a dispatcher. I had a fleet of 40-45 drivers that I would manage, and I was their main point of contact for things like setting them up with their next load, filling out paperwork, making sure they were on time, and sometimes just being an ear for them to talk to.
It was during this time that my appreciation for drivers truly began, as I could see how many hours they worked and the conditions they were up against.
The role of a dispatcher is extremely important to a trucking company. I don’t think that a dispatching position will ever be the highest paying at a company, but it shouldn’t be at the bottom either. I have seen countless examples through several different companies of “You get what you pay for”.
‘Cost-conscious’ hires not always best
For simplicity’s sake, I will compare someone making slightly more than minimum wage ($32,500) to someone making double that ($65,000). Let’s call the $32,500 person “Lou” and the $65,000 person “Terry”.
Off the hop, it looks like you are saving more than $30,000 by going with Lou. On paper, someone might be commended for making such a cost-conscious hire. But when considering a variety of factors, this isn’t always the best option.
There is likely a reason why Lou is content earning $32,500. Lou probably has not worked in transportation before, is probably unfamiliar with the computer system you use, and requires to be taught everything from scratch. This means you will probably have to spend a solid month of training to get Lou a basic understanding of the position, plus several more months fine-tuning their skills. Let’s put the cost of having a manager train Lou at around $4,000-$5,000.
There will be a learning curve for Lou. Mistakes will be made. This could result in appointments being missed, unnecessary delays at the border, the wrong freight going to the wrong customer, mishandling when the driver turns in their trip envelope… there are lots of things that could go wrong.
Calculating the cost of some of these mistakes is easy, such as a fine for a late delivery or extra miles going to a wrong address. Depending on the nature of these mistakes, it is not unreasonable to think that these could cost the business another few thousand dollars in the first month or two.
This does not factor in a cost that can be a little tougher to measure: driver satisfaction and retention. If an inexperienced dispatcher causes a major delay at the border, the driver is missing out on miles that could be driven.
Or, if a driver has to call in multiple times to get more information, their time is not being used efficiently and their level of frustration increases. I’ve seen it many times as a recruiter — a lot of drivers who call looking for work are upset with their existing employer. If Lou loses three to five more drivers than Terry, there is another $15-25,000 in losses, as the cost of replacing a driver is $5,000 by conservative measures.
The cost of cheap
Perhaps Lou does OK at their job, but Terry is an all-star. Where Lou can comfortably look after 35 drivers, Terry can confidently handle 50. Based on Terry’s expertise, the drivers in this fleet average 11,000 miles per month compared to Lou’s drivers who average 9,500 miles. This would mean that Terry’s fleet is doing an extra 217,500 miles per month. The math on the profitability of this is substantial.
The appeal of hiring someone for a low salary in hopes of moulding them into the perfect employee is tempting, but often doesn’t work. You also run the risk of investing several months of training into someone, only to have them walk away, and then you are back to square one. Actually, you are behind square one since you wasted training efforts, the drivers are already frustrated, and they have will have to repeat the same procedure with a new hire.
Dispatchers usually have the most contact with your drivers. Do everyone a favor and hire quality people for this role. In the big picture, it will pay for itself in no time.