Allocation Weeks: A Practical Model for Delivery Triage

Allocation weeks compress margin, raise liability, and expose weak operating discipline faster than almost any other event. When supply tightens, the question isn’t whether customers will be unhappy; it’s which failures become legally, financially, or reputationally expensive. Missed fills at critical-use accounts invite claims; broken contracts trigger penalties; rushed dispatch increases safety risk and workers’ comp exposure. For experienced propane operators, allocation is less about finding gallons than deciding where limited gallons do the most damage prevention. The companies that come through intact are the ones with a defensible prioritization model, clear enough to guide dispatch at 5 a.m., strict enough to protect high-risk customers, and flexible enough to keep penalties and churn from compounding.

Defining “Risk” Beyond Volume
During allocation, gallons are a blunt instrument. Risk is not. Triage should start with a ranked risk ledger that blends human safety, legal exposure, and commercial penalties, not just forecasted burn. Critical-use accounts (life-safety, process heat, healthcare, senior housing) carry an asymmetric downside; a short fill is not equivalent to a delayed delivery at a price-sensitive residential account. Contractual obligations matter next: liquidated damages, take-or-pay clauses, or service-level penalties escalate quickly when missed. Only after those tiers are considered should discretionary or spot-priced volumes enter the queue. This strategic framing gives dispatch a defensible rationale when calls spike and tempers flare.

Dispatching Discipline Under Staffing Strain
Allocation often coincides with driver shortages, overtime caps, and equipment bottlenecks. The mistake most often made is trying to do more with less. The fix is route compression: shorter runs, fewer stops, tighter geography, and larger drops to the highest-risk tiers. Dispatch should lock in a daily risk plan before phones open – who gets filled, who gets deferred, and which accounts receive proactive notices. Deviations should require a supervisor’s sign-off. This reduces ad-hoc rerouting that elevates hours-of-service risk and increases backing incidents – two losses insurers track closely during winter peaks.

Managing Contract Penalties and Customer Churn
Allocation decisions are commercial decisions. Some penalties are cheaper than others. Operators should pre-calculate the penalty per missed gallon by contract and compare it to the downstream cost of losing a high-margin customer. In some cases, it is rational to accept a defined penalty to protect a cluster of critical accounts or a dense route that preserves labor efficiency. What’s indefensible is drifting into penalties by default. Make the trade explicit, document it, and communicate early. Customers tolerate scarcity better than silence.

A Proactive Playbook: What To Do Now

• Build a three-tier risk list (Critical/Safety; Contractual/Penalty; Discretionary) with named decision owners. Freeze it daily.
• Pre-route for risk, not fairness. Compress geography for Tier 1–2 accounts; cap discretionary stops per truck.
• Quantify penalties vs. churn. Maintain a one-page matrix showing penalty triggers, dollar exposure, and margin at risk.
• Standardize communications. Issue same-day notices for deferred accounts with next-window commitments to reduce inbound load and complaints.

Why This Matters
Allocation weeks reward retailers who replace improvisation with discipline. A clear triage model reduces claims exposure, keeps drivers safer, and prevents penalties from snowballing into margin erosion. More importantly, it creates a record of reasonable decision-making which is a useful resource with insurers, regulators, and sizeable customers alike. Scarcity will return; it always does. The businesses that exit allocation with trust intact are the ones that treated prioritization as an operating system, not a scramble. Build it now, rehearse it regularly, and your worst weeks will stop defining your year.