MUSCATINE, Iowa —Tire Management Solutions Inc. (TMS), a new Bandag Inc. subsidiary offering tire management/maintenance services to commercial fleets, has signed a contract with Roadway Express Inc., one of North America's three largest less-than-truckload freight carriers. The contract, announced Feb. 5, gives 2-month-old TMS total responsibility for supplying and managing both new and retreaded tires for Roadway's 10,000 tractors and 35,000 trailers. The Akron-based freight hauler has approximately 200,000 tires in use at any given time, a company spokesman said.
Roadway reported annual tire-related expenses of approximately $14.7 million in 1997, according to the August 1998 issue of Commercial Carrier Journal, a business magazine serving the trucking industry.
Bandag declined to elaborate on what other services it will be performing for the trucking company, whether it had bought out Roadway's existing tire inventory or how long the new contract will run.
Although the contract's specific terms were not disclosed, the Muscatine, Iowa, supplier of retread materials and equipment said the deal will have no material impact on its 1999 earnings.
Bandag, in announcing the Roadway-TMS agreement, noted that outsourcing tire management is not a new concept. Albeit on a smaller scale, commercial tire dealerships long have offered such services in various forms to local fleet customers, the company said.
What is unique about the Roadway-TMS contract, Bandag said, is that a network of more than 70 dealer members of the Bandag Strategic Alliance will be providing such service for Roadway terminals across the U.S. and Canada.
Despite the agreement, a Roadway spokesman said the trucking company anticipates no major changes in its present tire-related service operations—nor does it plan to lay off any of its approximately 800 mechanics. ``Whatever is done in our shops now, we'll continue to do,'' the spokesman said.
Routine tire inspection and replacement currently are carried out at Roadway's 24 service garages and 50 relay stations, where the company's rigs receive a change of drivers after every 10 hours on the road, he said.
In announcing the Roadway agreement, Bandag said the specifics of future service contracts will vary according to the needs of the fleet and the transportation segment in which each customer is operating.
Bandag said such agreements are intended to get the fleet customer out of the tire business so that management can concentrate on its core business and obtain the maximum return on its tire investment.
Bandag said such contracts can provide services ranging from tire selection by wheel position and application to the mounting and demounting of tires, tire repair and wheel reconditioning, emergency roadside service, inventory management and scrap tire disposal.
TMS Vice President Mike Tirona predicted the newly formed Bandag subsidiary will ink many more such national management contracts.
Mr. Tirona said Bandag, in its 40 years of helping fleets reduce operating costs and solve tire-related problems, has gathered ``a wealth of information about how tire products run in various applications and industry segments.''
He said Bandag's Strategic Dealer Alliance, with more than 1,600 sales and service locations in North America, is in a ``unique position to deliver the consistent quality in products, programs, information and services,'' that such agreements necessitate.
The company said it will use a variety of new-tire brands in servicing its various TMS accounts. A spokesman said the company wants the flexibility of recommending the best possible tire for each customer's application.