More Fleets Turn to Outside Service Providers as a Way to Cut Equipment, Training Expenses

This story appears in the March 1 print edition of Transport Topics.

Over the past decade, a growing number of fleets have begun outsourcing more of their tire maintenance needs as a way to save on machinery, equipment and training costs.

Tire manufacturers said their programs can be tailored to the individual needs of fleets, which can help a driver get back on the road faster when an emergency arises. Likewise, several fleet executives said outsourcing many of their tires needs have yielded multiple benefits.

“For us, it’s been an evolution that’s taken place over 25 years with Goodyear,” said Steve Graham, who is vice president of purchasing with truckload carrier Schneider National Inc. “Initially, we had asked them to own our inventory and, to some degree, we found a way to get that done. Then, from an emergency breakdown standpoint, we couldn’t have terminals everywhere, and Goodyear has close to 200 company-owned outlets.”

Since starting the relationship, it has been expanded by Schneider to let Goodyear cover emergency maintenance and play a role in functions such as mounting and retreading.

Besides Goodyear, several other tire manufacturers — including Bridgestone and Michelin — in conjunction with their dealer networks, also are jumping at the opportunity to build relationships with fleets.

Doc Hyder, president of Rowland Transportation, Dade City, Fla., said outsourcing emergency service made sense for this family-owned business whose owners had been personally handling emergency needs.

“Prior to [outsourcing], we would get a call in the middle of the night,” Hyder said. “Or if it happened during the day, we would have to get on the Internet and try to find a truck stop that was close, or get a driver to look through the phone book and find someone who had 24-hour tire service.”

Like Schneider, Rowland enrolled in Goodyear’s fleetHQ program, which provides dealers with products and a nationwide database to help them respond more quickly and accurately. In fact, since being introduced in 2008, Goodyear’s fleetHQ program has served about 21,000 fleets.

Although service is performed by local dealers who are members of Goodyear’s Wingfoot Network, company administrators provide updated data to help dealers get the right products for each fleet.

“FleetHQ creates the umbrella to house our fleet solutions,” said Doug Whittington, Goodyear’s general manager for replacement dealer sales. “And it’s not just a call center after hours. It’s what I would call ‘mission control’ for our fleet solutions.” The information provided through fleetHQ is similar to a person’s electronic medical files.

Bridgestone also offers outsourced tire maintenance, and its system allows dealers to customize a program for each fleet, said Guy Walenga, the company’s director of engineering, commercial products and technology.

“A dealer can say, ‘Mr. Fleet, I’m supplying all your tires. How about I supply them as tire wheel assemblies ready to go?’ ” Walenga said. “That means he can do all the repairs, retreads — he can sell new tires. And usually he can even refurbish the wheels, because the wheels have to be in good condition to be able to do this.” This allows fleets to avoid investing in high-cost maintenance infrastructure, he said.

A fleet “doesn’t have to worry about what condition the wheel is in. He doesn’t have to worry about having tire-mounting equipment or balancing equipment,” Walenga said. “The fleet could completely divorce itself from the tire-maintenance side of the operation.” Doing so saves time and money that would otherwise have to be spent on training, he said.

Bridgestone leaves sales calls to individual dealers because it will create a smooth relationship from the start.

“The dealer is the best and most accessible source of information for the fleet to have,” Walenga said.

Tire maker Michelin said it provides maintenance service through affiliations with various service providers across the country, and partners with Love’s Travel Stops and Country Stores.

In addition, Michelin operates 79 Michelin Retread Technologies shops through franchisees throughout the country.

Doug Jones, customer engineering support manager for Michelin, said the use of Michelin’s service facilities has grown in recent years as fleets have looked for more from outside sources.

“A fleet will want a dealer that he can establish a relationship with,” Jones said. “It’s more than just being able to provide a product. A lot of fleets don’t make a big distinction between tire [brands]. What they want is service.”

Aaron Murphy, a spokesman for Double Coin U.S., said his company has not yet ventured into full mounted-wheel programs but is considering moving in that direction. For now, Double Coin offers national accounts standardized pricing and strategic support through dealers.

“We put into play standard pricing for a fleet that is competitive for the fleet, as well as being profitable for the dealer,” Murphy said. “Even though we may be using different dealers, the fleet has the same coverage wherever they go, even at the OEM level.”

Goodyear’s Whittington said fleetHQ improves the experience for fleets needing service.

“I needed some way to provide consistency across the country for service,” he said. “We were outsourcing our call center for emergency service. The outsourced call service people answered the phone for doctors and trucks. So, we felt there was a better way, and we put our call center at fleetHQ. So now they will only answer fleet calls, and they will know what a trailer tire is. They will know how to speak to a truck driver on the road.”

The program is now introducing what it calls a “fleet dashboard” to make the information easier for dealers to access.

For Schneider, Graham said, the move to outsourcing has helped in several ways.

“As our business evolves to shorter length-of-haul, different load weights, different driver experience levels, there are different moving pieces to it, but we can say our operating cost has gone down as we’ve been able to consolidate with Goodyear,” Graham said.

Richard Sharpe, vice president of fleet services for MacKinnon Transport, Guelph, Ontario, said his fleet has been in markedly better condition since he began contracting out emergency and preventive tire maintenance to the Canadian firm Kal Tire.

“We’ve seen improvement to the fleet in wheel-end maintenance, tire selection and, without a doubt, the number of tire repairs on the road,” Sharpe said. “Any given tire repair on the road can cost you $500 just in raw materials and work, but there’s also the cost to the customer and the cost of service to the driver.” Graham said for Schneider, it became unfeasible to have maintenance terminals in enough locations to service drivers’ needs as the company grew.

“We couldn’t have our terminals everywhere,” Graham said. “Goodyear has close to 200 company-owned outlets, and even though we may only use them periodically for emergency work . . .  they understand how important a customer Schneider is, and we get pretty good service from all of them.”

Similarly, Hyder said Rowland Transportation, which has grown from 35 tractors and trailers five years ago to more than 100 today, has found that fleetHQ makes his monthly cost more predictable.

“It used to be so variable, what we paid in each instance,” Hyder said. “Depending on where the blowout happened, it would be hard to predict. I’d be pretty comfortable saying we’ve saved $150 on each callout just because we have control over pricing, as opposed to just taking a crapshoot of whoever you can find in the phonebook.”