Analyze CPM To Learn Your True Tire Cost

By Doug Siefkes

With all the pressure to reduce maintenance expenditures, it’s easy to consider buying parts or components based on the initial purchase price rather than long-term cost. Tires are no exception. Some people still view tires as a commodity – they’re black with a big hole where the wheel fits. It’s easy to assume that if they all look alike, they probably perform about the same.

“But, one size does not fit all, especially in performance,” asserts Tim Miller, Goodyear’s marketing manager for commercial tires.

Tires are what keep a fleet rolling and can cost a fortune unless you adopt a plan to control those costs.

“Treads may look a little different amongst competing brands, but it’s what you don’t see that can make a difference in cost/performance.”

Still, it’s difficult to look at two tires and see the performance difference, which prompts some people to buy on price. For most trucking operations, experienced fleet managers know the initial purchase price is the first part of the equation and not the whole story. Cost per mile (CPM) is what they’re after, along with customer support from their tire provider.

To begin with, what’s considered a “premium” product? “These are tires usually, but not always, produced in the United States or Canada,” says Miller. “On the other end of the spectrum are tires, typically produced overseas, that are priced considerably less.”

Premium brand tires are often called “Tier 1” tires to those in the industry. Some lower-priced imports are generally referred to as “Tier 3” tires. In the middle is a group of tires called “Tier 2.” The lines of distinction between the tiers are a bit cloudy, but there are pricing and expected performance differences between the premium and the Tier 3 tires.

So, what do you typically get with premium tires that you don’t get with other products? Although this could vary from brand to brand, the majority of premium products have some combination of the advantages listed below:

  • Innovative tread design for enhanced grip and more uniform wear
  • Longer treadwear mileage
  • Application-specific attributes that meet application-specific needs
  • Tough casings
  • Higher rates of retreadability
  • Greater casing values
  • Wide availability
  • More comprehensive warranties

Price and Value

Tire companies use their latest technologies in their premium brands. High-tech, low-rolling resistant tread, high-scrub resistant compounds, high-tensile steel body plies and belts, plus the latest mold shapes help give premium tires advantages that may go

The first step in a tire program is maintaining the recommended air pressure.

beyond miles until removal. Goodyear has even included a built-in sealant in some tires.

“All in all, tire companies with premium brands invest heavily in research and development,” says Miller. “Goodyear strives to develop new and innovative tires that have a positive return on investment and are what we often consider ‘best in class.’

“But, while we do our own analysis to make sure new products have a payback and earn their keep as a premium tire, we encourage fleets and owner-operators to do the same. They need to prove to themselves what’s the best value for their operation.”

Gathering Data

Although it takes some time to get valid results, treadwear tests can be run to find out the wear rates of various tires in a fleet. When worn out, tire casings can be scrapped, sold or retreaded. “The path the casings take plays a huge role in the calculation of your CPM for any particular tire,” says Miller. “A tire with one tread life, and then a trip to the scrap pile, is probably not a great

Regular inspections and good records are important.

value. If the casing has value on the open market and can be sold, that can be cost-effective. Or, if a casing can be retreaded – multiple retreads are what you’re after – then the overall tire costs in a fleet can be greatly reduced.”

Life cycle costs include the initial cost of the tire, tire mounting expenses, and subtracting the casing credit or adding the cost of retreading. Include the cost to dispose of the tire. In concert, you should track the original miles on the tire, and the mileage you get on each retread, then divide total miles driven by actual costs.

“Once this data is gathered, it’s just a matter of crunching the numbers to determine the cost per mile and the overall costs of running one brand versus another,” says Miller. “Goodyear has a program called Tire Valu Calc that makes the number-crunching part easy.”

Crunching the Numbers

“For our calculation, we will make a series of assumptions,” says Miller. “First of all, tire pricing was based on typical 19.5-inch tires. The cost differences would be less for vehicle using 16-inch tires and greater for 22.5- or 24.5-size tires on larger vehicles.

“Certainly, for a fleet to get a true view of the price versus cost situation, real life numbers can be used. The example is intended to provide some food for thought.”

  • Premium tires generally cost up to one-third more than lower-tier tires.
  • Casings on premium tires have a local market value depending on condition and the number of retreads on them.
  • A Tier 3 tire often has no value and is generally not retreaded.
  • Operators can get up to one-third more miles to removal on premium tires than on Tier 3 tires.
  • Premium tire casings are retreaded and used in 50 percent of the drive wheel positions.
  • The cost of a retreaded premium tire is about one-third the cost of the original tire, and the cost of a retreaded Tier 3 tire is about two-thirds the cost of the original tire.

Run Your Test

“For illustrative purposes, let’s say you run a fleet of five single-axle tractors and each of them travels an average of 35,000 miles per year,” Miller says. “And let’s say your tire change cost is $50 per tire. For the purposes of this illustration, we’ll consider a tire change to be pulling the vehicle into the shop, removing the old tire/wheel from the vehicle, dismounting the old tire, mounting a new one, and placing the new tire/wheel assembly back on the vehicle.

“We’ve calculated the initial cost per mile of running a new premium tire versus an inexpensive tire to be identical,” says Miller.

Tread depth is critical...

“That’s really no surprise since the lower end tires cost a third less, but run a third less total miles to removal.”

But the savings with premium tires come in total tire costs, Miller adds. That’s because the tires don’t have to be changed as often. Over a year’s time, the five-unit fleet running Tier 3 tires can expect to pay $390 more to change tires than a similar fleet running with premium tires.

The casings on low-end tires also may not retread as well as premium tire casings. In many cases, they’re not retreaded at all.

“That’s why when we look at tires on the drive positions in this comparison, 100 percent of the low-end tires are new and not retreads,” Miller says. “But with the premium tires, 50 percent of the drive tires have retreaded casings.” (It’s assumed the other 50 percent are new premium tires – original equipment on the tractor when it was new.)

Because retreads on premium tire casings cost less than new low-end tires, fleets enjoy even bigger overall cost savings from the premium tires. In this case, the combined savings from lower total tire costs (new premium tires and retreads) plus the reduced tire change costs might result in an annual savings of over $2,000 for this fleet of five trucks.

Some may argue that it is unfair to assume that none of the Tier 3 tires could be retreaded, but if half are retreaded, the number still comes out with $1,000 savings with the premium tire.

Miller says that fleet evaluation after fleet evaluation confirms that in the long run, cheaper is not always synonymous with less expensive. “That’s why we always encourage fleets to run tests if they’re not convinced they can save money using premium tires. If done correctly, the numbers will speak for themselves.”

Value-Added Service

Miller says that fleets need to consider other benefits of working with a tire dealer offering premium tires. “That’s service after the sale. If you’re a preferred fleet or national account running Tier 1 tires, you can expect your dealer to help you with your entire tire program. This may include wheel refinishing, mounted tire programs and tire management information systems. Most fleets find these services much less expensive when provided by tire professionals than when done in-house,” says Miller.

And then there’s emergency roadside service. The Achilles’ heel for any construction company is down time. And, with nails and other road debris, the possibility of a flat tire exists.

“And that’s exactly why Goodyear offers fleetHQ,” says Miller. “Our emergency roadside service’s mission is to respond to customers quickly and get them back on the road in as little time as possible. And we do it in a cost-effective way. What’s more, our customers are billed the same price for tires on the road as they pay at home with their servicing dealer. That’s a huge benefit to our customers. They just need to develop a program and pricing structure with their local dealer and they’re set.”

Doug Siefkes is the founding partner of

SiefkesPetit Communications

Issaquah WA

Eight Tips for Truck Tire Maintenance

Follow a tire inspection routine to help assure safety. Routine maintenance maximizes tire life, minimizes downtime and improves vehicle-operating efficiency.

1. Check tires for correct air pressures. Drivers or operators should have an accurate pressure gauge and be instructed to check the tires daily.

2. Conduct a visual inspection of your vehicle’s tires prior to operation. Look for signs of irregular wear in the tread or shoulder of the tire and examine the tire for bubbles or bumps caused by air infiltration or foreign objects.

3. Remove rocks or other debris caught in the tread and between tires mounted in pairs.

4. Check the vehicle’s owner’s manual or the vehicle load and tire information placard to determine precise air pressure. It should provide initial data on the weight of the vehicle and standard load.

5. Never apply heat to the wheel when the tire is mounted. This can cause serious damage to tires and can cause them to explode, causing personal injury.

6. Store tires properly when they are not in use. Place them in a cool, dry place away from direct sunlight to avoid premature aging.

7. Avoid mixing tires on your vehicle; i.e., avoid pairing a normal tread depth with a deep tread depth or a bias-ply tire with a radial.

8. Be sure to wash your tires. This helps to prevent premature aging of the tires and deterioration of the rubber.

This article ran in the January 2010 issues of the ACP magazines.

Leave a Reply

Your email address will not be published.

*