Carrier Allocation

What Is Carrier Allocation?

Carrier allocation is the practice of distributing a shipper's freight volume across multiple carriers according to a predetermined split, rather than relying on a single carrier for all shipments.

How Does Carrier Allocation Work?

Shippers typically negotiate contracts with several carriers and assign each a target percentage of volume on specific lanes, based on factors like rate, capacity, service reliability, or strategic relationship goals. Allocation percentages are often reviewed and adjusted periodically (e.g., quarterly) based on carrier performance and shifting freight needs.

Why Carrier Allocation Matters

Spreading volume across multiple carriers reduces dependency on any single provider, improves negotiating leverage, and provides a fallback if one carrier can't cover capacity during peak periods or disruptions. Poorly managed allocation, however, can dilute volume commitments to the point where no single carrier prioritizes the shipper's freight.