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June 10, 1996 02:00 AM

ROAD CURVES AHEAD: TRUCKING SLOWDOWN TO IMPACT DEALERS

Gregory James Kennedy
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    ALEXANDRIA, Va.-The projected marginal growth in the trucking industry through 2004 is forcing transportation companies to change their operations in ways that will have widespread repercussions for commercial tire dealerships, according to tire and trucking industry experts. Large trucking companies, in their attempts to cut costs, will continue to gobble up smaller competitors, outsource tangential functions, demand cost-saving products, and look toward regional and national tire dealerships that can service their vehicles, industry experts predicted.

    The transportation industry, as a whole, is only expected to grow 24 percent over the 10-year period between 1994 and 2004, according to the second annual U.S. Freight Transportation Forecast study prepared for the American Trucking Associations Foundation by DRI/McGraw-Hill.

    The trucking industry will grow even less-about 21 percent-losing ground primarily to air freight and rail intermodal methods of transportation.

    Still, trucking will account for more than three out of every four dollars spent on U.S. freight transportation, and annual commercial truck miles driven will grow 29 percent to 197 billion miles by 2004, the ATA said.

    In terms of tire sales, Bridgestone/Firestone Inc. said it expects commercial replacement tire shipments to remain flat over the next few years while original equipment shipments for truck tires will dive by 20 percent in 1996, and by 10 percent next year, from the abnormally high 5.5 million units posted in 1995.

    The number of over-the-road tractors and trucks (Classes 6-8) will increase 13 percent over the next 10 years, the ATA said.

    To compensate for the industry slowdown, trucking firms will continue to outsource their tire and maintenance programs-functions once performed in-house, according to Walt Weller, vice president of truck tire sales at Bridgestone/Fire-stone Inc.

    Fleets that have cut their internal maintenance programs are instead looking for large regional commercial dealerships that can service their vehicles in a consistent manner.

    ``They are asking dealers to make decisions about how to squeeze every last mile out of that tire,'' Mr. Weller said.

    Trucking firms also are using acquisitions to grow their businesses in the mature industry. In other words, the large companies are getting larger and, as a result, looking for larger tire dealerships to service them, Mr. Weller said.

    ``Smaller dealers have to be more regional in scope,'' he said. ``That's not to say that every small dealer in the country is going to become a part of a larger dealership or die, but the trend is going in that direction.''

    Dealers also will have to contend with new tire innovations, developed to help cut costs for trucking companies.

    ``Tires enclosed behind (aerodynamic) fairings represent a new challenge in compounding for the industry,'' said Donn Kramer, general manager of commercial tires for Goodyear.

    ``Heat will still be the worst enemy of a truck tire. Tires made with heat-resistant compounds can help truck makers use aerodynamics to achieve greater fuel economy.''

    Haul distance, as well, is down and will continue to decline with increases in intermodal and rail transportation, Mr. Weller said. Fewer miles traveled per trip also will affect tire compounding.

    ``We see it as an opportunity,'' he said. ``You still have to get the goods (from the train) to the (end point), and the only way I know of doing that is by truck.''

    Both Goodyear and Bridgestone/Firestone are encouraging their independent dealers to use the latest computer technology and programs as a way of providing value-added service to their trucking customers.

    Programs such as Goodyear's CD-ROM, Tools to Manage Your Fleet, allow dealers to monitor fleet tires and can predict results in usage scenarios.

    ``Smaller organizations that lack resources to provide fleets and owner-operators the service they demand will simply disappear,'' Mr. Kramer said.

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