Outsourcing Tyre management – Can You Afford Not To?

With haulage up 45 per cent in the last 20 years, average vehicle journeys up and the pay load being carried by commercial vehicles at a record high, the need for fleet inspections and tyre maintenance is growing in importance, as ‘down-time’ is expensive. An external source can provide a manager with a better view on its fleet’s tyre needs and cost structure and will aim to offer new cost reduction possibilities and more effective means of utilising resources, but more importantly can provide close follow-up on a fleet’s tyre programmes that otherwise might not be maintained. Most fleet management programmes now offer audit and analysis programs that provide a tailor made recommendation according to a fleet’s specific situation, needs and tyre policy.

It is important for tyre management providers to maintain good relationships with fleet managers so that they can make sure they deliver both what the customer wants and needs and that the service isn’t driven by the single desire to sell new tyres. Most tyre management schemes offer a combination of services, regrooving, retreading and tyre replacement as well as follow-up and management systems, management reporting, preventative maintenance and 24 hour roadside assistance.

Tony Stapleton, fleet sales manager CES, believes that fleets need to understand their operating costs more effectively, so that they can exert proper control over them. “Many managers accept fixed cost contracts and the problem is it becomes an unmanned cost, they don’t know if the service provider is making more money by charging a set price per kilometre than they should be.”

Many tyre management providers would like to see the end to a fixed cost approach. “Price per kilometre has often been misused as a way of gaining tyre business by simply quoting a lower rate but this does not lead to sound long-term relationships,” says Continental. The company likes to view its system as an open book, rather than the closed book method of many of its competitors and whilst they offer ppk the company advocates a structure that is appropriate to the fleet’s real costs.

Mr Stapleton admits that there are a varying degree of fleet operators that want to get to know and understand the ins and outs of their tyre costs. The challenge, he explains, is getting to the finer details of the operator’s costs. However, he does believe that most fleet managers would agree that tyre choices are important. Whether they fully understand the ramifications of their choices is another matter.

Fleet operators do not always focus on identifying all of the cost elements concerning their tyres. There is a tendency to concentrate on the price of the tyre alone and to pay insufficient attention to the costs of service and administration. Likewise they don’t analyse the cost of tyre damage, and so find it difficult to rectify any problems.

There is a high expectation that tyre management automatically reduces costs, but this is not guaranteed. Unless an operator is already analysing tyre costs in some detail then the most likely outcome of a tyre management programme is that it will identify the true cost of tyres in the fleet, a sum that is often higher than was previously thought. Tyre management can aid valuable changes within the business through means such as simple casing management and auditing and regular review of a fleet’s performance. But even with the help of an external source it is still often a case of trial and error combined with expertise to get a fleets’ exact requirements right.