Case | HBS Case Collection | April 1988 (Revised September 1992)

Frito-Lay, Inc.: The Backhaul Decision

by Janice H. Hammond

Abstract

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; Revenue; Governing Rules, Regulations, and Reforms; Marketing Strategy; Distribution; Service Operations; Sales; Salesforce Management; Transportation; Food and Beverage Industry;

Citation:

Hammond, Janice H. "Frito-Lay, Inc.: The Backhaul Decision." Harvard Business School Case 688-104, April 1988. (Revised September 1992.)