From lanes to corridors: A volume–volatility framework for optimising truckload capacity allocation

Abstract

Transportation managers must balance stability and flexibility when allocating truckload capacity between asset-based carriers and third party logistics providers in increasingly volatile freight markets. This paper presents a volume–volatility framework that integrates demand scale and multidimensional volatility metrics to systematically guide allocation decisions. It defines volatility through three complementary measures — weekly and daily coefficients of variation and zero shipment day frequency — enabling more precise assessment of operational feasibility alongside volume thresholds. By combining these dimensions into a structured matrix, the framework establishes objective criteria for determining when dedicated capacity is appropriate and when flexible sourcing is required. A key innovation is the aggregation of individual shipping lanes into geographic corridors, allowing risk pooling to reduce variability and increase effective volume density. Empirical application across two large food manufacturing networks demonstrates that corridorbased analysis significantly improves asset allocation suitability, increasing asset-suitable volume by 40–50 per cent. A pilot implementation further validates the approach, showing improved service levels, higher tender acceptance rates, and measurable cost reductions through more effective carrier alignment. The framework translates intuitive decision making into a repeatable analytical method using standard transportation management system data, providing transportation managers with a practical tool to optimise carrier portfolios, improve procurement strategies, and enhance resilience in dynamic freight environments. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.