Concerning the radial truck/bus (TBR) tire market, the first half of 2022 saw great demand that was only hampered by supply constraints. We anticipate TBR demand to remain strong in the second half. If a recession comes to pass, consumer activity will cool off which will impact trucking.
High diesel fuel prices are putting extreme pressures on fleet operating profits, so fuel efficient TBR tires continue to be in great demand. Triangle TBR tires receive great reviews for quality, but tariffs and duties continue to hamper our competitiveness in the medium/heavy truck tire sector.
Triangle sells very few passenger and light truck tires in the U.S. due to high import tariffs and duties.
Has there been any improvement with the supply chain?
We anticipate the global logistics breakdown to gradually improve through the rest of this year but will continue to constrain supply as the U.S. economy remains strong and demand is outstripping supply. A recession could change that.
We anticipate OTR tire demand to continue to be very robust, especially with the infrastructure bill passing Congress.
Are you still seeing surcharges on freights?
Shipping container prices continue to be at high historical rates. Our surcharges are a function of our actual container costs pure and simple. When we have to pass through higher container rates to our customers, we take a very granular, customized approach that has been well received in the market.
Essentially, our customers are asked to carry only the minimum amount of burden necessary for each specific container, as opposed to a blanket surcharge amount more common in the market. We negotiate hard with our shipping suppliers, and when we are able to negotiate a better-than-expected rate, our customers pay a smaller surcharge. This granular approach requires more work on our end, but our customers really appreciate the effort and transparency.
The company recently nixed a proposed U.S. plant. What was the overriding factor in that decision?
The North Carolina plant project could not proceed due to the changing investment environment, with factors such as the pandemic severely affecting the project.
Triangle remains committed to the U.S. market over the long-term and our ability to provide customers with OTR, specialty trailer, TBR and consumer tires remains strong. We appreciate the support of our many customers and look forward to the continued growth of the Triangle brand in the very important American market.
How important is the North American market to continuing that growth?
The OTR tire market continues to drive Triangle's growth in the U.S. With our combination of price and proven performance, Triangle dealers are very bullish on our OTR radial and bias tires with their customers.
Our TBR tires, which also get strong reviews from dealers and end users, would be even more competitive with the relaxing of the current tariffs and duties. Triangle is very much committed to the American market over the long term.