The encyclopedia · Strategy & Leadership · Operational decision · 1980s-2010s
Walmart filled its trucks' empty return run with supplier freight
After delivering to stores, Walmart's own fleet picked up supplier goods on the way back, turning empty miles into inbound freight.
Walmart · Sam Walton
the move
A private fleet that delivers to stores then drives back empty is paying for a whole second journey that produces nothing.
Walmart's backhaul tactic has those return trucks stop at suppliers on the way home and load inbound freight back to the distribution centre.
The single tactic serves several strategies at once: it lowers the third-party freight bill, it converts empty miles into useful transport, and it keeps control of timing and quality in a way buying transport from a carrier would not.
why it works
- Filling the empty return leg offsets the cost of the miles a truck was going to drive anyway.
- Running your own fleet removes the margin a third-party carrier would otherwise earn.
- Controlling the fleet lets you control when freight moves and how it is handled, not just what it costs.
- The same asset that delivers to stores becomes a sourcing and inbound tool, joining cost and control.
what transfers
An asset that only runs one way is half-used. If you already own the move, let it earn on the return run too, and a pure logistics cost becomes a way to control where your goods come from.
what came after
The private-fleet-plus-backhaul model became part of Walmart's cost edge, and the underlying logic (control your own distribution to control your profit, and do not run empty) stayed central to its supply-chain strategy as it later moved into route optimization and store-based fulfillment.
references
- Basic Cost Reduction Strategy: Using Walmart's Inbound Freight Control Initiative to Illustrate Strategy
- Annual Report 2014 - Backhaul principle
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