Truck Stops a Growing Sales Channel for Tire Makers
Consolidation Facilitates Full Range of Services
By Dan Calabrese, Special to Transport Topics
This story appears in the Jan. 28 print edition of Transport Topics.
As truck stops become more consolidated into a few large national networks, tire manufacturers are finding that they can provide fleets with a full range of tire services — not simply emergency repairs and replacements — while trucks are on the road.
Truck-stop operators said tire sales represent a significant proportion of overall revenue from their maintenance and shop operations. And the biggest component of that revenue derives from the execution of national accounts between fleets and tire manufacturers, tire executives said.
“We have a dedicated salesperson for the truck-stop channel,” said Dave Beasley, director of commercial tire sales for Goodyear Tire & Rubber Co., Akron, Ohio. “We have grown in this channel the past five or six years because we’ve made a concerted effort.”
“From our perspective, the truck-stop channel is a real key element,” said Kurt Danielson, vice president of commercial tire marketing, truck and bus tires, for Bridgestone Firestone North America Tire.
Nashville-based Bridgestone announced Jan. 11 that it signed a new seven-year deal with TravelCenters of America, making it the exclusive supplier of “premium” tires to TA and Petro truck stops. TA also will distribute Bridgestone tires through its RoadSquad emergency service.
Goodyear’s Beasley estimated that just more than 5% of all truck tires are sold at truck stops and said Goodyear’s percentage is slightly higher than that.
Citing data from the Rubber Manufacturers Association, Marc Laferriere, vice president of marketing for Michelin Americas Truck Tires, Greeneville, S.C., said truck stops account for 5.5% of all truck tire sales in the United States — although he would not reveal the equivalent percentage for Michelin. A Bridgestone representative also declined to say what percentage of its tires are sold through truck stops.
Laferriere said fleets demand the convenience of tire service and maintenance at truck stops.
“The simple fact that fleets are operating on such a tight schedule, and they need to be up and running all the time if they want to have a positive bottom line, makes it important for them to optimize everything they do,” Laferriere said.
“So, having the truck loaded 98% of the time, making sure the truck is on the road all the time, making sure they spend less time doing preventive maintenance, all converge to a very optimized operation,” he said.
That practice has led to more maintenance occurring on site at truck stops, Laferriere said, and those visits to truck stops have increased the market opportunity for tire manufacturers there.
The trend is accelerated by consolidation in the truck-stop industry, resulting in smaller, independent truck stops either closing or selling out to larger chains.
There are about 5,000 truck stops in the United States, said Mindy Long, vice president of communications for NATSO, which represents the industry.
One of the biggest and most recent examples of consolidation is the May 2007 acquisition of Petro by TA, which now operates 233 TA travel centers and 41 Petro Stopping Centers in the United States and Canada — and sells truck tires at all of them.
Another influential but somewhat different chain is AmBest, which has developed an extensive network of 39 service centers in conjunction with independent truck stops throughout the country.
Paul Rickey, general manager of the AmBest Service Center at the Jubitz Truck Stop in Portland, Ore., said tire sales are a crucial part of his operation’s revenue stream — a part that depends on almost pit-stop-fast turnarounds.
“It’s in and out really quick,” Rickey said. “I’d call us a trip continuation. When they’re not running, it costs them money. So, what makes the difference is the speed and the accuracy of the way we perform the tire service.”
Rickey said his service center, which is across the street from the main travel plaza, sees anywhere from 10 to 30 customers per day — of as many as 1,200 who stop at the plaza. Out of these, between 20% and 30% buy tires.
But if quickness is crucial in generating some tire sales, other sales may depend on the driver’s staying longer and doing more to take a sale away from a tire dealer.
Randy Haines, service center division manager for Bosselman Travel Centers, Grand Island, Neb., said that while tire sales are a major percentage of his service center’s overall revenue, tire purchases are often not the primary reason a driver stops.
“We also offer alignments, which brings us a lot of tire business as well,” Haines said. “We have three profit centers, which are tires, oil changes and repairs. Tires are probably our number one, dollarwise, in revenue. But in some areas, it’s the most competitive as well, because you’ve got all those other tire dealers and all the retail operations out there.”
Truck-stop tire sale operations depend heavily on customers’ access to national account programs through manufacturers. Under such arrangements, truck stops are able to sell tires to customers at discounted rates negotiated between the manufacturers and their national accounts, with the manufacturers reimbursing the truck stops.
That reimbursement encourages more customers to buy more tires in a given stop and makes it easier for them to use truck stop tire sales for more than just an emergency replacement.
And though these arrangements typically are between fleets and tire manufacturers, owner-operators often are able to make them as well.
“We sell quite a number to owner-operators,” said Fred McGuire, service center manager at All-American Plazas, which has four locations in Pennsylvania and one in Virginia. “They’ll come in and buy 10 tires at a time and completely redo their tractor, usually when they hit 400,000 or 500,000 miles.”
Rickey said owner-operators’ access to national account programs is crucial to tire sale activity because the owner-operators don’t have to write a check to the truck stop.
Manufacturers try to prevent oversaturation, however. Haines said Bridgestone/Firestone won’t authorize a dealer in an area it considers already sufficiently served and, because Bosselman has a well-established relationship with the manufacturer, its territory is fairly well-protected as a result.
For manufacturers, one of the keys to successful use of the truck-stop channel is the ability to offer consistent pricing to fleets.
“The larger fleets require a consistent program across the country,” Danielson said. “We have programs like that for them, just as all the manufacturers do, so he’s getting consistent pricing and that’s really important — that he’s got that stability and he can bank on how much he’s going to spend.”
Other factors, however, may limit a fleet’s willingness to make truck stops their major source of tire purchases.
Steve Graham, vice president of purchasing for Schneider National, Green Bay, Wis., said the company makes a very small percentage of its planned purchases at truck stops. This is for three reasons, Graham said:
• Schneider’s preference for Goodyear tires, which are distributed more widely through Goodyear’s company-owned Wingfoot dealers than through truck stops.
• Schneider prefers to use 16-ply steer tires, which is necessitated by its trailers pulling more closely behind its tractors to improve fuel economy. Most tires at truck stops, Graham said, are 14-ply.
• Schneider likes to use retreads, which are hard to find at truck stops.
This story appears in the Jan. 28 print edition of Transport Topics.
As truck stops become more consolidated into a few large national networks, tire manufacturers are finding that they can provide fleets with a full range of tire services — not simply emergency repairs and replacements — while trucks are on the road.
Truck-stop operators said tire sales represent a significant proportion of overall revenue from their maintenance and shop operations. And the biggest component of that revenue derives from the execution of national accounts between fleets and tire manufacturers, tire executives said.
“We have a dedicated salesperson for the truck-stop channel,” said Dave Beasley, director of commercial tire sales for Goodyear Tire & Rubber Co., Akron, Ohio. “We have grown in this channel the past five or six years because we’ve made a concerted effort.”
“From our perspective, the truck-stop channel is a real key element,” said Kurt Danielson, vice president of commercial tire marketing, truck and bus tires, for Bridgestone Firestone North America Tire.
Nashville-based Bridgestone announced Jan. 11 that it signed a new seven-year deal with TravelCenters of America, making it the exclusive supplier of “premium” tires to TA and Petro truck stops. TA also will distribute Bridgestone tires through its RoadSquad emergency service.
Goodyear’s Beasley estimated that just more than 5% of all truck tires are sold at truck stops and said Goodyear’s percentage is slightly higher than that.
Citing data from the Rubber Manufacturers Association, Marc Laferriere, vice president of marketing for Michelin Americas Truck Tires, Greeneville, S.C., said truck stops account for 5.5% of all truck tire sales in the United States — although he would not reveal the equivalent percentage for Michelin. A Bridgestone representative also declined to say what percentage of its tires are sold through truck stops.
Laferriere said fleets demand the convenience of tire service and maintenance at truck stops.
“The simple fact that fleets are operating on such a tight schedule, and they need to be up and running all the time if they want to have a positive bottom line, makes it important for them to optimize everything they do,” Laferriere said.
“So, having the truck loaded 98% of the time, making sure the truck is on the road all the time, making sure they spend less time doing preventive maintenance, all converge to a very optimized operation,” he said.
That practice has led to more maintenance occurring on site at truck stops, Laferriere said, and those visits to truck stops have increased the market opportunity for tire manufacturers there.
The trend is accelerated by consolidation in the truck-stop industry, resulting in smaller, independent truck stops either closing or selling out to larger chains.
There are about 5,000 truck stops in the United States, said Mindy Long, vice president of communications for NATSO, which represents the industry.
One of the biggest and most recent examples of consolidation is the May 2007 acquisition of Petro by TA, which now operates 233 TA travel centers and 41 Petro Stopping Centers in the United States and Canada — and sells truck tires at all of them.
Another influential but somewhat different chain is AmBest, which has developed an extensive network of 39 service centers in conjunction with independent truck stops throughout the country.
Paul Rickey, general manager of the AmBest Service Center at the Jubitz Truck Stop in Portland, Ore., said tire sales are a crucial part of his operation’s revenue stream — a part that depends on almost pit-stop-fast turnarounds.
“It’s in and out really quick,” Rickey said. “I’d call us a trip continuation. When they’re not running, it costs them money. So, what makes the difference is the speed and the accuracy of the way we perform the tire service.”
Rickey said his service center, which is across the street from the main travel plaza, sees anywhere from 10 to 30 customers per day — of as many as 1,200 who stop at the plaza. Out of these, between 20% and 30% buy tires.
But if quickness is crucial in generating some tire sales, other sales may depend on the driver’s staying longer and doing more to take a sale away from a tire dealer.
Randy Haines, service center division manager for Bosselman Travel Centers, Grand Island, Neb., said that while tire sales are a major percentage of his service center’s overall revenue, tire purchases are often not the primary reason a driver stops.
“We also offer alignments, which brings us a lot of tire business as well,” Haines said. “We have three profit centers, which are tires, oil changes and repairs. Tires are probably our number one, dollarwise, in revenue. But in some areas, it’s the most competitive as well, because you’ve got all those other tire dealers and all the retail operations out there.”
Truck-stop tire sale operations depend heavily on customers’ access to national account programs through manufacturers. Under such arrangements, truck stops are able to sell tires to customers at discounted rates negotiated between the manufacturers and their national accounts, with the manufacturers reimbursing the truck stops.
That reimbursement encourages more customers to buy more tires in a given stop and makes it easier for them to use truck stop tire sales for more than just an emergency replacement.
And though these arrangements typically are between fleets and tire manufacturers, owner-operators often are able to make them as well.
“We sell quite a number to owner-operators,” said Fred McGuire, service center manager at All-American Plazas, which has four locations in Pennsylvania and one in Virginia. “They’ll come in and buy 10 tires at a time and completely redo their tractor, usually when they hit 400,000 or 500,000 miles.”
Rickey said owner-operators’ access to national account programs is crucial to tire sale activity because the owner-operators don’t have to write a check to the truck stop.
Manufacturers try to prevent oversaturation, however. Haines said Bridgestone/Firestone won’t authorize a dealer in an area it considers already sufficiently served and, because Bosselman has a well-established relationship with the manufacturer, its territory is fairly well-protected as a result.
For manufacturers, one of the keys to successful use of the truck-stop channel is the ability to offer consistent pricing to fleets.
“The larger fleets require a consistent program across the country,” Danielson said. “We have programs like that for them, just as all the manufacturers do, so he’s getting consistent pricing and that’s really important — that he’s got that stability and he can bank on how much he’s going to spend.”
Other factors, however, may limit a fleet’s willingness to make truck stops their major source of tire purchases.
Steve Graham, vice president of purchasing for Schneider National, Green Bay, Wis., said the company makes a very small percentage of its planned purchases at truck stops. This is for three reasons, Graham said:
• Schneider’s preference for Goodyear tires, which are distributed more widely through Goodyear’s company-owned Wingfoot dealers than through truck stops.
• Schneider prefers to use 16-ply steer tires, which is necessitated by its trailers pulling more closely behind its tractors to improve fuel economy. Most tires at truck stops, Graham said, are 14-ply.
• Schneider likes to use retreads, which are hard to find at truck stops.
