fbpx

Commercial Tires: The Perfect Storm

Autosphere » Tires » Commercial Tires: The Perfect Storm
Supply and demand are ongoing issues facing the trucking industry, and the commercial tire dealers who service them. PHOTO Zetong Li / Unsplash

The commercial tire side of our industry is enduring challenges unlike any experienced in history.

The tsunami of issues commercial tire manufacturers, importers, retailers and fleet operators have seen in the past couple of years are nicely summed up by Guy Letellier, Technical Advisor, Commercial Products for PointS Canada.

“2021 was a very tough year,” he says. “We were confronted with many issues, including COVID-19, a shortage of shipping containers, a strike in Vancouver, forest fires and floods in B.C., several price increases for raw materials and for freight, a higher demand for OE truck tries, and higher demand in the U.S. market, which impacted Canada as well.”

Fortunately, Letellier sees a light at the end of the tunnel. “So far, 2022 is not too bad,” he adds. “In January we had 60,000 commercial tires on back order. [By mid March] that number was cut in half. As a countermeasure, our purchasing department is placing orders up to three months in advance of what they would normally do. That’s because when you put your order in first with the supplier, you are the first to receive it when it is produced.”

John Hagg, VP Sales and Operations, Huayi Tire Canada agrees that despite the challenges, this year is going to be good for business. “I think 2022 is going to be slightly improved over 2021,” he says. “I don’t see a slowdown in overall business. I do see a slight improvement in terms of the tire industry versus our past couple of years, and certainly much better than what was going on during the COVID-19 years. I would say a return to pre-COVID-19 [business levels] is quite reasonable to expect this year.”

That said, we’re not in the clear just yet. Hagg warns that we’re going to continue to see shortages, due in part to lockdown measures in force in parts of Asia, which will impact the global market as manufacturers try to make up for lost production and shipping out of Asia, with their other factories in other parts of the world.

Supply chain issues are also going to be more challenging in the latter half of 2022 due to the holiday shipping season. “All the major retailers ship in the summer for the upcoming Christmas season,” Hagg explains. “As tire companies servicing Canada, we’re going to be fighting for container space on vessels that are already dedicated to some of their long-term retail customers.”

Hagg offers commercial tire retailers and fleet operators the following timely advice: “Whether you’re a dealer anticipating further price increases, or a fleet looking to ensure you have sufficient inventory, invest in tires, at least for this year.” 

No need to panic

Despite the forecast shipping issues and possible shortages, Alan Eagleson, Segment Manager TBR, Sailun Tire Americas says there’s no need for fleet operators to panic.

“There are many manufacturers of truck tires,” he explains. “If a fleet is willing to use an alternate brand, they should be able to source tires.” He adds that, “some manufactures have stopped production on their sub-brand lines,” which means that fleet operators might not be able to find the tire brand of their choice in the size they need, but they should be able to find an alternate tire, from another brand, that does fit.

Retreading and value-priced tires

Another key concern for purchasers of commercial tires is the rising cost of fuel, which is cutting into their bottom line. One of the ways they’re cutting operating costs is by retreading old tires, instead of purchasing new. 

“Based on industry numbers, more fleets are retreading tires,” says Sailun’s Eagleson. “Any savvy fleet operator has been retreading tires as part of their total fleet program, forever. When you look at Ryder and Waste Management – two of the world’s largest fleets – with better buying power on new tires than anyone, they both have extensive retreading programs. Why? Because they have proven the cost advantage of retreading.”

Huayi Tire’s John Hagg agrees. “It’s all part of a long-term strategy to keep your operating costs as low as possible,” he says.

Last-mile delivery

The pandemic has taught consumers how easy it is to order goods online and have them delivered. This trend, in turn, has created an increase in the demand for vehicles involved in the last-mile delivery side of the commercial market, says James McIntyre, VP of Sales for Canada, Sailun Tire.

“When you look at companies like Amazon or FedEx, there’s a bigger demand for lighter duty commercial tires,” McIntyre says. “There are a lot of people delivering goods now, and I think that’s a trend that’s going to remain with us, going forward. Companies like Amazon aren’t slowing down, so I think those delivery fleets are probably using a lot more commercial tires.”

While we’re not out of the woods yet, the consensus seems to be that things will eventually get better on the supply chain side of things. In the meantime, business should be good for retailers, many of whom, according to McIntyre, have stocked up on tires in order to better buffer the supply challenges.

“Instead of 60-days inventory, they’ve gone to let’s say 120-days inventory,” McIntyre adds. “The dealers who aren’t forward-thinking, however, or don’t have the capital to invest in inventory, are the ones that are going to be challenged over the next little while.”

Commercial Tire Highlights

 

The Wanli WA01 All Weather drive tire, with a 3PMS Snowflake rating, provides dependable traction throughout the year regardless of the weather. (PHOTO Double Coin)

 

  • Brand: Wanli
  • Tire: WA01
  • For: Drive Tire
  • Sizes: 11R22.5,11R24.5
 

The S637-SP has been enhanced with sidewall protection ribs to withstand curb abrasion and sidewall cuts common in the last-mile delivery segment. (PHOTO Sailun)

 

  • Brand: Sailun
  • Tire: S637-SP
  • For: Regional All-Position
  • Sizes: 215/75R17.5, 225/70R19.5, 245/70R19.5

 

Popular Posts

Calendar

Menu
X