Perusing our annual Mid-Year Tire Report, featuring input from a number of top tire manufacturers, there's a sense that it's been business as usual in the tire industry so far this year.
In the large and endless wake of COVID-19, maybe that's a good thing.
Tire makers are ramping up production, expanding size ranges and releasing new, inventive products for the market. Tire dealers are making record sales.
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"So far, 2022 has been a carryover from the trends of 2021," Michael Graber, president and CEO of Toyo Tire U.S.A. Corp., told us. "We came into this year with heavy back orders and have seen the same trends through the first half. We have recently seen an easing of the supply chain bottlenecks, so we have been able to get supply to the market more quickly and efficiently than the last two years."
We would contribute the "business as usual" mentality to the adaptability of the industry, because many challenges remain. Prices continue to increase, but manufacturers are not taking their foot off the gas.
The biggest issue tire makers see affecting the year so far is the supply chain.
When asked if freighters continue to be the biggest bottleneck in the supply chain, Walter Weller, senior vice president of CMA Double Coin Holdings Ltd., answered, "Yes, absolutely.
"In 2021, we were blind to where containers were after they were put on the ship. At the height of the supply-chain issue, we had containers that were at the docks in Long Beach and Los Angeles ports but couldn't be located due to the tremendous number of containers they were handling. ... 2022 has been better, but the challenge for us as well as our customers is handling and scheduling multiple containers for delivery."
Bridgestone Americas Inc. Chief Operating Officer Scott Damon told us that the company is seeing some "relative" improvement on the container side.
"... But I would say other parts of the supply chain are not," Damon said. "The at-risk material supply is as bad as it's ever been, though the containers from the West Coast are slightly improving."
Laren Harmon, senior vice president of Carlstar Group L.L.C., said the company believes availability of ocean freight containers will stabilize, "however we do not expect any relief with regards to cost."
John Hagan, Nexen Tire America Inc.'s executive vice president of sales in the U.S., said while the supply chain is showing some improvement, it's not enough.
"It's getting slightly better, but it needs to dramatically get better for everyone to breathe easy. We went so far backwards as an industry with regard to on-time shipments, inventory fulfillment and customer expectation, that there is still a lot of work to do."
Tommi Heinonen, vice president of sales at Nokian Tyres North America, told us the company has been able to leverage its growing capacity at its plant in Dayton, Tenn.
"It is hard to say when the (supply chain) situation will return to normal, but our increase in domestic production at our Dayton factory is helping reduce supply impacts and will only help us more in the future."
Trelleborg Wheel Systems President Paolo Pompei said the company is also leveraging its U.S. factories.
"There is a long lead time to get the shipments arriving in the country," he told us. "And then, of course, inflation, because the containers have gotten extremely expensive when you ship from Europe or from Asia to the United States," he said.
Both of Trelleborg's U.S. factories are running at full capacity, he said.
With record inflation, a war in Ukraine and oil prices the highest in history, it doesn't bode well for a quick end to supply-chain challenges. But as long as demand for tires remains high, the only advice we can offer is this: Ride out the storm.
