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Adding it up Asa Sharp May 1, 2001 12:00 PM Most fleet managers agree that tire costs are lower than they were a decade ago, and represent a smaller percentage of total running costs. In spite of this, there is still quite a disparity among fleets when they report actual tire costs. While all fleets are not created equal in terms of how efficiently they run their tires, perhaps the biggest discrepancies have more to do with how reported costs are calculated. For many operators, the days of buying a highly spec'd truck and using it till it wears out are history. Details such as length of service, mileage limitations, and vehicle conditions (including tire types and tread depths) are often spelled out at initial purchase. In fact, preferences of future used-truck buyers are sometimes taken into consideration when new vehicles are spec'd. In addition, tax planning, accounting practices, and corporate structuring play ever-larger roles in equipment purchases. Consequently, when we try to look at tire costs across fleets, we're no longer comparing apples to apples. Tire expenses used to mean just that — expenses. Today, however, some of these costs show up on balance sheets as expenses, while others are capitalized and appear on financial reports, not maintenance records. Over-the-road emergency purchases may be subjected to different bookkeeping procedures, depending on provider contracts; they can even differ depending on where the purchase occurs. And using trade-in vehicles to cleanse tire inventories of repaired, multiple retreaded, and aging tires is no longer standard practice. Trade-in contracts and used-truck buyers who demand vehicles that are well maintained and ready to run have pretty much put an end to this. Another factor 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. Common guidelines today include putting new tires on specific axle locations and removing them only at wear-out. In the past, the maintenance department would do all the recordkeeping of a fleet's tires, usually during scheduled visits to the shop. As fleets turn to outsourcing, or a combination of in-house and outsourced maintenance, obtaining accurate and complete tire mileage and removal information is not easy. The bottom line is that when it comes to tires, it's difficult to make meaningful cost-per-mile comparisons among fleets. In light of this, here are some suggestions for making responsible tire-related decisions for your fleet. First, get information from fleets with operations similar to yours that have experience with the service providers you're considering. When you're thinking of switching brands or models, consider running a controlled evaluation using a small, but statistically significant, number of the new product. Try to find identical vehicles that run in relatively similar service conditions and track the equipment carefully. Ask service providers to help you collect information quarterly or semi-annually, but also try to have someone from your fleet involved in the process if possible. Finally, concentrate on out-of-service tire inspection and analysis. Early removals and unscheduled replacements can quickly add dollars to tire program costs, compared to the few cents saved by small differences in the performance of a tire's original tread life. Focus on improvements in your operation, and don't be misled or discouraged by claims of other operators. |
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