Running in Tandem
Fleet & Dealer Partnerships: Creativity, Dedication and Trust Help Both Sides in Today’s Brutal Market
Sometimes a story sounds too good to be true. Listen to what fleet owner Duane Acklie from Omaha, Neb., has to say about spending money with tire dealers. "When I spend money with today’s sophisticated, creative tire dealers, I know I’m saving tons of money," he says.
The emphasis is on "sophisticated" and "creative." Acklie, and thousands of other fleet owners, need ahead-of-the-curve dealers to keep them viable. It’s not just about products, delivery and road service anymore. It’s about true co-dependent partnerships, trust and opportunity.
Acklie is chairman of the board for the Acklie Companies which operates Hunt Transportation, Crete Carrier, Shaffer Trucking, and HTL Truck Line ®“ collectively operating 6,000 power units and 14,000 trailers.
Past chairman of the American Trucking Associations, Acklie is as friendly and down-to-earth as they come. "The trucking industry is a lot smarter than it was 25 years ago," he says, noting his business’ own partnership reorientation with his customers.
"There was a time when we were afraid to buy a tire on the road because we didn’t know what we were going to pay for it. Back then, tire dealers weren’t providing service, and most fleets handled their own tires. Today, tire dealers are ready and willing to deliver service, and they work quickly and efficiently.
"Without question, our relationships with independent tire dealers are making a difference in our business, and those relationships are both friendly and professional. As a result, we enjoy uniformity of price and uniformity of service. When we need service, we get it when and where it is needed.
"Unquestionably, our vendors are keeping us competitive and in business," he says. "Tiremakers are giving us very good tires with good retreadability, and dealers are giving us the service we require."
And today’s fleets can no longer afford to do themselves. "We have a lot on our plate," says Acklie, "from regulators to insurance companies to the price of fuel, we spend much of our time dealing with everything but servicing our tires.
"That’s why we depend so much on tire dealers to keep us rolling. I’m very concerned about proper alignment for our vehicles and balancing for our truck tires. We find that very few of our power units are properly aligned when they arrive here new from the factory," he says. He relies on his dealers to correct and watch those problems.
These aren’t minor issues for Acklie, they are important business matters that go straight to his bottom line. In trucking today, a highly competitive, low margin business, a strong partnership with a tire dealer can make all the difference.
Helping A Fleet’s Bottom Line
Al Cohn, manager of strategic initiatives for Goodyear’s commercial tire unit, says tire dealers would do well to remember that earning a fleet’s trust is vital, and can mean long-term benefits.
"Fleets are asking for help managing more than just tire costs. Some have dozens of locations far from headquarters, and they need to contract with someone they trust, someone who they can rely on without question.
"If a fleet chooses you to monitor a drop lot or terminal, they’re buying your honesty and integrity," says Cohn, suggesting that dealers can serve as the eyes and ears of a far-flung fleet.
"Because they may not see a trailer back at headquarters for a year or two, that speaks to the kind of faith they must place in you to provide the service and support they need," Cohn says. "Do it the right way and you’ve just covered your overhead and more."
Price is Not the Key
"What I’m interested in is the net effect of the cost of tires taken in context of the whole vehicle," says George Survant, director of fleet services for Florida Light & Power, which operates 3,900 pieces of equipment in the Sunshine State.
"What I’m looking for is a one-source solution to my tire needs. I want a tiremaker with a superior product and a dealer with superior service that meets my needs and those of my 4,700 drivers.
"Our business is dangerous," he says, "so I give my people products they can depend on, and I spare no expense to protect their safety. That’s what they expect from me and I can’t let them down.
"My tire service must be performed by a superior provider, someone I can partner with to solve a wide variety of problems," says Survant. "We need the tire dealer’s expertise just as much as we need the tiremaker’s engineering and scientific expertise."
Asked to quantify what he requires in a servicing dealer, Survant came up with a short list. "We are looking for a long-term stable relationship. We want dealers with integrity. We are looking for dealers who are as interested in our business for next year as much as they are next month. And we want a trusting rapport with our dealers."
How long has it been since a customer told you he was interested in a long-term, stable relationship? How long has it been since you heard anyone use the words "integrity" and "trust" as they relate to your business?
"But that is precisely what I’m looking for," says Survant. "My utility trucks must be ready to restore power under a wide variety of conditions."
He’s talking about work trucks that must operate in severe weather conditions, including hurricanes, tropical storms, lightning and everyday rain storms. Some are specialty trucks, like bucket lifts, insulator washers and digger derricks. Some are 18-wheel line haul trucks and some will see both on- and off-road service.
"I need a servicing dealer who can provide me with superior tire service 24/7/365, one who offers me an intelligent product selection and one who is an effective problem-solver."
Free Flow of Info
"One of the things we do best of all is communicate," says Survant. "We e-mail suppliers, and we e-mail servicing dealers. We don’t wait on voice mail. I keep digital cameras in all of our garages. If any of my technicians observes what he believes is an irregular wear pattern in a tire, he takes a picture and puts that image online for all of our 144 technicians to see." The dealer is also included.
What’s the chance that Survant and his people will pick up a tire wear problem fast? "I see it almost immediately," he says. "Within 24 hours we can identify a problem, which is a heckuva lot faster than a conversation about a possible problem at the end of the month."
Meanwhile, back in FL&P’s yards and garages, they constantly monitor the number of times and total amount of time their trucks are out of service, and the effectiveness of tire service trucks in reaching FL&P’s work sites.
"What we want is for everyone in the chain of commerce to join with us in an information flow. This includes tiremakers, tire dealers and us. We are always looking at ways to improve communication with those in the chain," he says. "It’s a very direct way for us to get what we require and for vendors to increase their business prospects."
Just how closely does Survant monitor his fleet? "If I have a truck in for service with 2,900 hours on the engine and no tire trouble, it’s noted.
"By the same measure, if a truck with 3,500 hours on the engine is exhibiting an unusual tire wear issue, I have a statistical reference that can be used to project a possible tire problem," he says.
Street-Smart Dealers Needed
Returning to the subject of superior vendors, Survant knows what is needed. "First, we’re a different kind of customer and the smart commercial tire dealers understand that. I don’t represent a high margin customer, but I do represent a constant flow of business."
Just as important to Survant is something he might call "street smarts." "We need dealers who can apply their own intelligence and creativity to problem solving," he says. "We like it when a dealer tells us that he sees a symptom that he believes needs to be tracked, and we like it better if he offers to do it for us.
"We regularly buy ‘fleeting service,’ the regular checking of our tires for irregular wear patterns and inflation pressure. But just about anyone can do that. Too often the dealer simply sends out his minimum wage guy. We want a dealer who sends out his best personnel, one who sees us a valued customer."
"Another benefit to dealers has to do with referrals. Because I’m part of a power supply organization with 11,000 employees in 20 states, I am constantly asked for advice on where to buy tires. I am quick to praise those dealers who have really done a job for me."
For Survant, it’s all about trust, service and communication. He views his company as a pioneer in the way it gathers and uses information.
Today’s technology is the reason for better command and control information statistical data that is readily interpreted and understood by both FL&P and its dealers.
"As power providers, we spend enormous amounts of money to deliver quality power. Our ability to roll a fleet to take care of power outages is what our customers demand," he says. "No question, we need the best help we can find and that would be the vendor who is just as interested in me as I am in him."
Bridgestone/Firestone’s Tom Rozuk, manager national fleet sales, says doing business with a fleets is not about reinventing the wheel, it’s about returning to fundamentals. "Any good tire dealer can change a truck tire, but can he reduce fleet running costs and develop a reliable tracking system?
"Technology is as familiar to most dealers as it is to today’s fleets. Dealers must make sure that fleets get the new tires they need when they need them, the same thing for retreads, and wheels and takeoff mileage." In other words, leveraging today’s available technology.
"These everyday business needs aren’t new, but they are more critical today," says Rozuk. Why? In Rozuk’s view, today’s fleets can’t really afford to be in the tire business. They have shifted from being trucking companies that transports goods to being logistics firms that use trucks as a tool to solve distribution and inventory control problems.
The upshot is that thinking of a truck as an asset is not as clear cut as it once was. "The real asset for today’s fleets rest in the relationships they establish with vendors," he says. "When a trucking firm can establish a partnership with those who share common business interests, both parties benefit."
But are tire dealers delivering more?
Rozuk suggests dealers grade themselves on their customer relationships: How is my service? Was I on time? Did we perform the work correctly? Did we damage anything? Did we price the job properly? How many retreads per casing are we delivering? How many miles did the original tire run? How many miles did the retreads run? If a tire or retread wasn’t serviced properly, what happened?
Dealer Knows the Drill
Dick Tolotti, vice president of Jack’s Tire & Oil in Salt Lake City, Utah, can winnow down Rozuk’s list even tighter, and demonstrate the importance of information.
New tires aside, "I must provide my fleet customers with a consistently good retread that performs uniformly and I must be able to provide a three-day turnaround time from casing pickup to finished retread.
"They also demand detailed accounting from me about how many casings I picked up, how many were rejected and how many were retreaded. If I pick up 100 and return 92 retreads, they need to know what happened to the other eight tires."
Tolotti added that his fleet customers count on him to sort tires and to tell them which tires can be repaired and which must be scrapped. "Increasingly, they also want those tires mounted on wheels, and the full assembly mounted back on the tractor/trailer," says the Utah dealer about something many fleets used to do themselves.
"We’re also seeing increased demand for on-site, front-end alignment work for tractors and trailers, and on- site balancing for steer axle tires."
A busy guy, Tolotti services fleets with as many 200 power units and 250 trailers up to fleets with 3,200 power units and 6,000 trailers.
"As dealers we must always remember our basic message: If he buys a new steer axle tire for $250 and retreads it once for $90 for drive axle use and retreads it again for $70 for trailer use, he has a $410 investment for three tread lives.
"But if he replaced the new tire with another new tire it would have cost him $750 for three tread lives. In other words, if we do our job properly, we can routinely save the fleet $340, or 83%, in cost."
Tolotti sells new Michelin and Goodyear truck tires and manufactures some 110,000 retreads annually in his Michelin retread system plants in Boise, Idaho; and Logan and Salt Lake City, Utah. He has nine outlets in Utah and Idaho, employs 194 people.
To help him and his people get to the customer quickly Tolotti operates some 40 service trucks 24/7. "The fleet is our customer," he says, "and my job is to contain or reduce their cost."
Because of Tolotti’s attitude and commitment, he is deeply involved in his customer’s business plans. "They want me to be involved," he says. "They want my suggestions and they want me to be honest with them."
He offers this case in point. "If I say to a fleet owner that I have an idea I think will work, but I’m not absolutely certain, they tell me to try it. Then it’s my job to monitor results and report to them if my idea worked or not. They rely on me that much."
Tolloti also knows that while he monitors what happens at his end of the partnership, the customer is monitoring him. "They know if a program is working at 12 locations, but not at two others. They constantly compare one new tire with another, one retreader with another, and one servicing dealer with another. That’s what they’re supposed to do."
By the same token, Tolotti and his people understand they can’t rest on their laurels. "We must wake up every morning and do the job the right way. It’s all about somebody’s frozen steak making it all the way from the point of origin to the final destination. It either makes it or it doesn’t," he says.
"If that steak has to travel 1,000 miles but makes only 990, you didn’t get the job done and that’s unacceptable."
Low Turnover Important
Some places are better to work for than others. In Torrington, Conn., Toce Brothers is one of those places. "We have 26 employees here," says Sonny Toce, "including 12 truck tire experts." How expert are those "experts?" They range in experience from five to 46 years.
Because Toce’s biggest fleet accounts are in six locations in Connecticut, he dedicated his "experts" to service trucks that are ready to roll in a heartbeat.
"That truck and that tire expert are on call to provide on-the-spot service. We maintain the tires for our fleet customers and do all the necessary record keeping. Plus, we have three warehouses full of tires, so we have what the customer needs when they need it."
That job is something Toce understands well. "We know what sizes each customer needs so we must have those in inventory, we must keep their downtime to a bare minimum, and we must deliver lots of retreads."
And it’s not just service they look for. "My biggest customer wants both traction and long tread life," says Toce. "So he counts on me to recommend the right type of tread design and type of compound, and he expects my recommendations to be on the money."
Toce Brothers, a Goodyear dealer for 79 years, has built its reputation on customer and employee loyalty, by offering a good product and backing it up with service.
"My employees and I have grown up together in the place," says Toce. "I’ve been in the business since I was nine years old and took over when I got out of the service in 1955, so I’ve been around for a while."
And how is it that so many people have grown and learned together over such an extended period of time?
"For one thing, I believe in taking care of good employees," says Toce, "so I pay them well. We also provide full medical insurance, two to five weeks of vacation a year depending on service, clean uniforms, sick days and personal days.
"Because our business gets harder every day and because we always need to be on the hunt for new customers, we believe having loyal employees lets us focus on what’s important keeping our customer’s happy."
Does Toce ever face an attitude problem? "Not really," he says, "but sometimes we all have to remind ourselves how and why we are earning a living. In a sentence it’s this simple: No customers, no business, no paycheck."
Perplexing Value Questions
Randy Clark, vice president of marketing for Michelin Americas Truck Tires, affirms that fleets are indeed turning more of their truck tire servicing needs over to independent tire dealers.
"Fleets are also looking at manufacturers for easy e-commerce transactions. They have a need to cut down on time spent on such matters because they are in a competitive struggle for survival."
That’s why Clark believes tire dealers should look at tiremakers with a record of promoting and selling the value of service. "This is no longer about tiremakers jamming the shelves with product," he says. "That only serves to put the dealer in an awkward position.
"What we’re interested in doing today is promoting service in a way that helps ‘pull through’ service business for independent tire dealers. It’s good business for everyone.
"We want to talk cost-per-mile, fuel savings and retreadability to the fleets as much as the independent tire dealer. It helps Michelin and the dealer. But we also want to talk about the value of service."
If there is a question mark here, and there is, it resides in the rhetoric.
"Service has a value," says Clark, "but no one has come up with a quantifiable way of stating that value in terms of dollars and cents. What is the value of ‘value’ or what is the value of ‘service?’."
Part of the answer can be found when a tiremaker or tire dealer fails to deliver. "Then it really sticks out," says Clark. "A downed truck waiting on a service truck is definitely an unfortunate growth segment in our industry. It’s all about service."
The real work of signing on new fleet customers hasn’t changed much. It’s still up to you. The only difference is that tiremakers and fleets are both counting on dealers to do what they themselves can no longer do efficiently and profitably.
For once, being caught in the middle is exactly where you want to be, although big challenges remain. Let’s go back to the beginning of this story. Duane Acklie, who counts heavily on the independent tire dealer, says that although he continues to squeeze his costs, he’s not sure there’s that much more left to squeeze.
The veteran fleet owner doesn’t waste words any more than he wastes money. With all due respect to Acklie, your job is to prove him wrong. If you can do that, if you can show fleets how to save more money, you’ll gain a new measure of respect and loyalty. And business.