181716303 | Mr.siwabud Veerapaisarn | Dreamstime
Supply Chain Shippers Port 181716303 Mr siwabud Veerapaisarn Dreamstime 613f9faf03e6b 615f3d4c68c97

Tire shortages and supply chain stress

Oct. 8, 2021
The latest round of price increases from the tire companies may reflect more supply and demand issues than rising raw material and energy costs. Natural rubber prices have fallen over the past few months.

For the past year and half, we have learned a lifetime of lessons because of the pandemic. As if dealing with the virus wasn’t enough, our dependency on the global supply chain was exposed, and some experts believe it may take more than a year to recover in certain areas, like semiconductors. Dealing with shortages and finding alternatives has been a constant struggle because there are going to be instances where products are just not available. 

I learned this lesson firsthand over the summer when my 17-year-old central air conditioner bit the dust. It took six long and hot weeks from the end of June to the beginning of August for all of the components to arrive. Everything from labor shortages to port delays played a role in the delay. The contractor had so many units on backorder that customers were called once a week and updated on the status of their orders and assured they were still on the list. Apparently, we weren’t the only ones enrolled in supply chain school. 

Recent news from the U.S. Tire Manufacturers Association (USTMA) suggests that homeowners in need of central air conditioning units are not the only ones learning lessons on supply and demand. USTMA recently updated its truck tire shipment projections with both original equipment (OE) and replacement tires showing double-digit increases when compared to 2020. OE projections are up 25.3%, from 4.7 million to 5.9 million; replacements are up 14.6% from last year with an increase from 19.2 million to 21.9 million.  

The latest round of price increases from the tire companies may reflect more supply and demand issues than rising raw material and energy costs. Natural rubber prices have fallen over the past few months, and there hasn’t been any news out of Southeast Asia that indicates there will be constraints on supply for the rest of the year. Oil prices have been on the rise since the first of the year, but they are still well short of the $100-plus/barrel prices from 2011-2014. However, prices have been steadily rising since the 15-year low at the beginning of the pandemic. Steel is up more than 200% since March 2020, but that typically wouldn’t be enough to raise tire prices by 10%. 

Economists and investors fear uncertainty. There is no historical data to predict how, when, or if we fully recover from the pandemic. When new variants develop at an alarming rate and vaccination remains controversial, there is literally no predictable end in sight. Will there be another lockdown, or will we have to find ways to live with COVID-19 for the foreseeable future? The lockdown created a majority of the supply chain issues we are currently struggling with, so let’s hope we choose to continuing living in a much different world. 

And with recent reports of significant backlogs for new Class 8 tractors in North America, fleets should expect truck tire shortages, specifically in the premium steer and drive markets. Combine that with the fact that used Class 8 prices are the highest they’ve been in six years, and projections for demand are not promising with an already limited supply. The OEMs have priority for top-of-the-line steer and drive tires, which puts stress on the replacement market under current market conditions. Backlogs in the new trailer sector are having similar effects on availability. Fleets can still find tires, just not the ones they want. 

Some fleets will just have to forget about getting the premium models from the major manufacturers. Between allocations and price increases, that top-of-the-line steer or drive tire may not be much of an option if one at all. Of course, retreading is a solution when the foundation is a good casing. Name brands are generally a safer bet than offshore because they are engineered for life beyond the original tread. If ever there was a time to embrace the benefits of retreading, it’s right now. 

Earlier in the year, I was visiting a large commercial tire dealer and noticed a new tire that looked more “new” than normal. I checked the date code and was surprised that it was only a few weeks out of the mold. Typically, it’s months between manufacturing and actual delivery to the dealer. This tire was literally less than a month old, so it would appear that inventories are either low or completely gone. Tires are out the door as fast as they can be produced under unprecedented circumstances, putting even more stress on an already stressed supply chain. Fleets should plan accordingly. 

This article originally appeared on FleetOwner.com.

About the Author

Kevin Rohlwing | Senior Vice President of Training

Kevin Rohlwing is the Senior Vice President of Training for the Tire Industry Association (TIA). He started in the tire business more than 32 years ago as a technician in his family’s dealership in Elgin, Illinois, where he also worked as a salesman and service manager.

In 1996, he joined the International Tire and Rubber Association (ITRA), the predecessor of TIA, as the Director of Commercial Tire Service. Kevin created and produced the Association’s training and certification programs that have educated more than 90,000 technicians since 1997.

In 2011, he was awarded the Silver Spark Plug for excellence in fleet maintenance from the Technology and Maintenance Council of the American Trucking Assns.

Sponsored Recommendations

Fleet Maintenance E-Book

Streamline your fleet's maintenance and improve operations with the Guide for Managing Maintenance. Learn proven strategies to reduce downtime, optimize in-house and third-party...

Celebrating Your Drivers Can Prove to be Rewarding For Your Business

Learn how to jumpstart your driver retention efforts by celebrating your drivers with a thoughtful, uniform-led benefits program by Red Kap®. Uniforms that offer greater comfort...

Guide To Boosting Technician Efficiency

Learn about the bottom line and team building benefits of increasing the efficiency of your technicians in your repair shop.

The Definitive Guide to Aftertreatment Diagnostics

Struggling to clear aftertreatment fault codes? Learn more about different aftertreatment components, fault codes, regen zones, and the best maintenance practices to follow.