| HBS Case Collection
(Revised September 1992)
Frito-Lay, Inc.: The Backhaul Decision
Prior to the Motor Carrier Act of 1980, companies with private trucking fleets were generally prohibited from selling transportation services to other companies. The deregulation of the trucking industry in 1980 allowed private carriers to offer for-hire transportation services. In 1983, as part of an effort to offset the rise in their distribution costs, Frito-Lay considers selling miles on its backhaul lanes to other companies. Frito-Lay management must consider whether the potential revenues from these services warrant the possible degradation of service to Frito-Lay's sales force. If the backhaul proposal is approved, a marketing plan for the transportation services must be developed.
Keywords: Cost Management;
Governing Rules, Regulations, and Reforms;
Food and Beverage Industry;