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Commercial Tires

Will the Real Cost-Per-Mile Step Forward?

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h3>Blame the Bean Counters

Why, then, is there such great disparity in total tire costs cited by various fleet managers? The most obvious answer is that not everyone does an equally outstanding job of addressing, or executing, the basics. Larger differences, however, can run much deeper and in most instances can be traced to – you guessed it ®“ the accountants.
Changes have taken place in ways that trucks are bought new, traded, refurbished, and sold as used. Purchasing options and leasing choices have expanded. Full-maintenance lease arrangements and outsourcing of some, or all, major maintenance tasks have become common industry practices.
The consequences of unscheduled downtime (road failures) have risen as a result of just-in-time delivery commitments and high equipment utilization. For example, many fleets no longer maintain equipment levels based on peak freight volumes, but plan ahead to secure leased trucks and trailers to accommodate shippers in high-volume holiday seasons.
Emphasis on driver comfort and retention has increased and is often factored into truck component selection. The days of simply buying a heavily specified/unique new truck and using it until it was worn beyond viable repair or relegated to local delivery service are, for the most part, history.
Many trade package details, such as length of service, mileage limitations, and trade vehicle conditions (including tire types and tread depths) are often spelled out at initial purchase. Potential used-truck purchasers and their equipment preferences are sometimes taken into consideration when finalizing new truck specifications. Tax planning, accounting practices, corporate structures, and business cycle timing now play large roles in equipment purchases or acquisitions.

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Not Simple Dollars and Cents

These and other factors affect tire cost comparisons in the old apple-to-apple sense. There are now lots of oranges and grapefruits in the mix, hindering comparisons. Tire expenses used to be just that – tire expenses.
Today, some of these costs are expensed while others are capitalized and shown on reports that never cross paths. On-the-road emergency purchases may be subjected to different bookkeeping practices, depending on provider contracts, and can even be different depending on where the purchase occurs.
The old practice of using trade vehicles to cleanse tire inventories of repaired, multiple retreaded, and aging tires is no longer possible for many new truck buyers, who are now restricted by trade package contracts and/or used truck purchasers demanding well-maintained, ready-to-run vehicles. Some users even report purchasing new steer axle tires for trucks about to be traded or sold.
Another consideration is the emphasis on minimizing any non-essential shop time and lowering labor costs. Such luxuries as periodic tire rotation and seasonal tire programs (in which the majority of new tires are replaced in the pre-winter season) are often no longer viable. New tire applications for specific axle locations and requirements that tires only be removed at wear-out or due to a road hazard are common guidelines today.
Maintenance personnel have historically gathered input data for tire recordkeeping, usually during scheduled visits to company facilities. As operators switch to partial or complete outsourcing, accurate and complete tire mileage and removal data has become more difficult to obtain.
The bottom line is that it’s increasingly difficult to make meaningful comparisons with cost-per-mile figures from neighboring fleets. In fact, even historic costs within a fleet may not provide a reliable benchmark.

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New Guidelines

Responsible fleet management, of course, requires studied fact-based decisions. Some suggestions:
®′ Base decisions on experience and known quality products and services.
®′ Seek counsel from respected peers with similar operations and a history of dealing with service providers.
®′ Consider controlled evaluations of new products, using smaller but statistically significant volumes, to develop product comparisons. It’s possible to find some identical vehicles in similar service conditions, though using larger numbers of units would be impossible to follow.

®′ Use service providers to assist in equipment surveys on a quarterly or semi-annual schedule. Have one of your own people participate in the data gathering and analysis.
®′ Concentrate on out-of-service tire inspection and analysis. Early removals and unscheduled tire replacements can quickly add dollars to tire program costs, compared to the few cents saved by small differences in original treadlife performance.
For many operators faced with one or more of these situations, acceptance of change, adaptability, innovative thinking, and common sense will separate the successful managers from those who resist.
And think apples®ƒapples…apples.

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