Caravans will act like a regular Army, but mostly loaded with horsecarts instead of troops - for example. Since having a horsecart in your army increases the amount of resources the army can carry. So while an army of 10 swordsman battalion could carry 80 stone, army with 8 horsecarts and 2 swordsman would carry 540.
Other player would no doubt try to seek out and attack such caravans, so Player might want to have a second army nearby to escort the caravan, or some allied armies who would come to his aid.
I am guessing you will require of my "protection demanding" services, but you better pay me hyandsomely, good bandits are hard to find.
You can do just that, position several armies in a region, and put them up at the alliance auction for other players to buy their protection. You might be quite bust though, fighting one battle after another protecting caravans.