Import duties debate shaped commercial industry in 2016

In a year dominated by the machinations surrounding the U.S. government's investigation into possible dumping duties on truck and bus tires from China, the commercial tire industry dealt with a relatively stagnant replacement market, a down original equipment market and a struggling retread sector.

In the end, the U.S. International Trade Commission (ITC) voted against imposing elevated import duties on Chinese tires after initially determining there was probable cause to do so. That initial assessment from early 2016, however, had a chilling effect on enough Chinese brands that imports of truck/bus tires from China fell 14.4 percent.

One change that bears watching will be the move by nationwide truck stop chain TravelCenters of America L.L.C. (TA) to build what it claims will be the "largest independent commercial tire dealership" in the U.S. with the roll out of the TA Truck Service Commercial Tire Network.This article appears in the April 10 print edition of Tire Business. The Westlake, Ohio-based company operates 243 truck service locations in 43 states and Canada, principally under the TA and Petro Stopping Centers brands. Those facilities include about 1,079 repair bays, nearly 3,000 technicians and a fleet of more than 1,600 of its RoadSquad Connect emergency roadside assistance vehicles, along with a growing fleet of OnSITE mobile maintenance vehicles.

TA features Goodyear brands (including Kelly and Marathon) through its travel centers, and it offers a range of other tire brands, including BFGoodrich, Continental, Roadmaster and Yokohama. It also offers Bridgestone and Michelin through national account programs and recently added the Pirelli brand and its Formula associate brand.

TravelCenters' move parallels to an extent a similar strategy by Love's Travel Stops & Country Stores to get more deeply involved in the tire side of the business through its Love's Truck Tire Care initiative.

Love's operates 409 travel stops in 40 states, after opening 46 locations in 2016. The company operates truck tire care facilities at about three-fourths of the stops and last year disclosed it is planning to expand the range of truck maintenance services beyond the existing truck tire care and light mechanical options.

The additional maintenance offering focuses on oil change service in the motor, transmission and gear boxes and is complemented by preventive maintenance services including fluid levels, fluid and filter quality checks and lube services, Love's said.

Independent dealers are mixed in their reaction to the growing influence of truck stop chains, ranging from total dismissal to top priority in strategizing.

As for the ranking of top dealerships, Southern Tire Mart L.L.C. maintained its hold on the top rung, chalking up $875 million in commercial-related sales in 2016.That was more than twice the revenue reported by Best One Tire & Service L.L.C., Pomp's Tire Service Inc. and Kal Tire, the second-, third- and fourth-ranked companies.

Green Bay, Wis.-based Pomp's Tire is likely to move into second place this year after its late 2016 acquisition of Cross-Midwest Tire Co. of Kansas City, Kan. The combined firms' annual revenue should easily top the $500 million mark.

Founded in Kansas City in 1980, Cross-Midwest will be considered a division of Pomp's Tire but will continue to operate under the Cross-Midwest name, according to Pomp's Tire President Jim Wochinske. The dealership operates a dozen commercial locations throughout Illinois, Kansas and Missouri, and it has three Bandag retread plants.

Kal Tire dropped to fourth from second, partially because of a swing in the value of the Canadian/U.S. dollar exchange rate.

Besides the Pomp's Tire/Cross- Midwest merger, there was a number of blockbuster deals this past year involving independent commercial dealers, including:Belle Tire Distributors Inc. and Tredroc Tire Services agreed to merge their commercial divisions into a joint venture that will operate 24 locations in six states — along with seven Bandag-system retread plants — and generate close to $300 million in annual sales. 

The venture, to operate under the Tredroc Tire Services name, has locations in Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin. It also will incorporate the partners' existing Belleroc Tire Services joint venture, which encompasses their respective OTR tire servicing assets in Michigan and Ohio.

BestOne Retreading of Great Bend, a member of the BestOne Tire network, acquired Becker Tire & Treading Inc.'s Bandag retread plant in Great Bend, Kan., as part of a change in ownership for Becker Tire. K&M Tire Inc. took over Becker's wholesale business and My Tire Place of Alexandria, La., took over Becker's seven retail/commercial outlets in Kansas. 

Purcell Tire & Rubber Co. expanded its footprint into the Pacific Northwest, including Alaska, with its mid-2016 acquisition of Phelps Tire of Seattle and the purchase in late 2016 of a Goodyear Commercial Tire Systems' retread plant in Wasilla, Alaska. The deal added eight service locations — five in Washington and three in Alaska — and a retread plant to Purcell's growing network. 

Phelps Tire generated an estimated $20 million-plus in annual revenue.At the same time, Purcell sold its activities in Pennsylvania.

Among tire makers, Michelin North America expanded its Michelin Commercial Service Network (MCSN) in the U.S. by a dozen locations in the past year with the addition of three new partners and initiated the network in Canada, signing 20 dealers with 82 points of service for coast-to-coast service.

The new U.S. signings — Pete's Road Service in Southern California (nine outlets), Youngblood Automotive & Tire of Austin, Texas (two locations), and Fleet Tire Inc. of Knoxville, Tenn. (one outlet) — expanded the MCSN to 630-plus locations. The network totals 25 dealers, including Michelin's Tire Centers L.L.C. subsidiary, which operates 65 outlets in 15 states.

Michelin describes the commercial network as designed to help fleets maximize uptime and ensure consistent, high-quality service from a nationwide franchise network.

Among the Canadian dealerships now involved are: Casselmann Tire Inc.; Cornwall Tire Service; Frisby Tire Co. Ltd.; Kamloops Tire Ltd./Tirecraft; Kirk's Tirecraft (nine locations); K.K. Penner Tire Centers Inc.; Les Pneus Robert Bernards Ltee. (10); MacMillan Tire & Service Inc.; Miller Tire Services Ltd./Tirecraft (nine); Midway Tirecraft (three); Pneus Belisle (nine); Son Tirecraft; Sussex Tire Service Ltd.; Tirecraft Ontario Inc. (22); Tirecraft Lac La Biche; Tirecraft Claresholm; Tirecraft Fort Saskatchewan; Tiremaster Ltd. (five); Valley Equipment Ltd.; and Valley Tire Ltd. (three).

Other changes worth noting:Bauer Built Inc. acquired a commercial tire center in Mankato, Minn., as part of an effort to expand services throughout the southern part of the state. The center, a former Mankota Oil & Tire Co. Inc. location, will be Bauer Built's ninth location in Minnesota and 33rd commercial center throughout its seven-state footprint.Beasley Tire Service opened commercial service locations in Corpus Christi, Pleasanton and Victoria, Texas, and added retreading to its business portfolio.Michelin remained the No. 1 brand among the largest independent commercial dealerships last year, being listed by 40 of the top 50 companies, according to Tire Business' analysis of the marketplace.Yokohama was the second most popular brand, carried at 33 of the top 50, followed by Continental (31), BFGoodrich (29), General (28) and Bridgestone (26).

On the retread side of the ledger, Goodyear Commercial Tire Systems held onto the top spot among medium truck tire retreaders, but the gap to No. 2 Southern Tire Mart narrowed measurably.

Bridgestone Americas' GCR Tires & Service business unit remained at No. 3, while Snider Fleet Solutions increased output slightly and overtook Best One Tire for fourth on the ranking of top truck tire retreaders.

Among those firms that made noticeable advances up the rankings were:

McCarthy Tire Service Co. Inc., up to eighth from 10th on 15-percent growth;

Tredroc Tire Services, up to 12th from 15th, on 39.6-percent growth;

New to the rankings this year are:Graham Tire Co. of Spencer, Iowa, and Sioux Falls, S.D., debuting at No. 34.Wonderland Tire Co. of Byron Center, Mich., debuting at No. 43.Returning to the list year were White's Tire Service of Wilson Inc. and Allied Oil & Tire Inc., at Nos. 39 and 40, respectively.

In the OTR sector, NRI Inc. of Portland, Ore., retained the No. 1 spot despite a 15-percent drop in production.

Eastern Tire Service Ltd. of New Glasgow, Nova Scotia, and Techno Pneu Inc. of Rimouski, Quebec, shared the No. 1 ranking among passenger and light truck retreaders.