Dollars and Sense
26 OVERDRIVE OCTOBER 2008 Dollars & Sense Max Heine Do you have ideas for this column? Call Heine at (800) 633-5953, Ext. 1038, or email at mheine@rrpub.com Retread value The idea that a retread is far inferior to a new tire is a bit like Bigfoot some people don't believe in it, some do, and don't confuse those true believers with the facts because their minds are made up. For the sake of argument, though, let's play with a few facts and per-ceptions. Assume retreads are less durable. That's the perception of 43 percent of respondents to the 2008 Owner-Operator Market Behavior Report. Among those skeptics, almost half believe retreads give them 7 or 8 miles to every 10 miles they get with a new tire before replacement. However, before they rule out retreads, they need to con-sider price: If a retread cost less than 70 percent of a comparable new tire, and other attributes such as reliability are equal, then it's a deal. A top-brand new tire in two of the most common sizes often sells for $400 to $450 or more, says Harvey Brodsky, managing director of the Tire Retread & Repair Information Bureau. Compare that to $150 for retreading your tire casing or $200 for buying a recently retreaded casing outright and it's a no-brainer, he says. The savings can easily exceed 50 percent, which is why the best-run fleets in the world use retreads, Brod-sky says, citing Schneider National, Yellow Transportation, FedEx and UPS, among many others. Furthermore, the major tire mak-ers would not operate retread divi-sions and advertise that their tires are good for retreading unless the prod-ucts were sound, he argues: Those tires are designed for multiple lives. To be fair, if you're weighing value under the assumption that retreads have a shorter life, you need to count the cost of extra downtime and labor for tire replacement. Still, this should be relatively infrequent, and therefore arguably covered by the difference in purchase price. For owner-operators who believe retreads hold up as well as new tires, buying retreads is an easy decision. And for those who doubt, it still makes economic sense to use retread tires, says Chris Brady of Com-mercial Motor Vehicle Consulting, which conducts the Market Behavior Report. In their view, the lower miles to replacement is more than offset by the lower purchase price. The same factors behind retreads' low cost reduced raw materials and production costs also make their use beneficial for the environment. It takes about 22 gallons of oil to make a new truck tire, most of which goes into the casing. It takes only seven gal-lons of oil to produce a retread. All tires are destined for the landfill. But with quality tire casings capable of being retreaded twice, use of retreads can dramatically slow the influx of tires into dumps. The average heavy-duty tire weighs 117 pounds. When the casing is ready for retreading, it requires only 27 pounds of rubber and other materials. How retreads' green grows O ye of little faith, try some reason when it comes to price and durability 90-95% 80-89% 70-79% 60-69% 40-59% 8% 8% 24% 48% 12% O ver driv e O wner -Oper at or M ar ket B eha vior R epor t Miles to replacement compared to new tire Percentage of owner-operators who perceive less durability Yes 42% Unsure 15% No 43% Do retreads have the same durability as new tires? Owner-operators' perceptions of retread reliability expected failure relative to new tires are similar to the breakdown on percep-tions of durability. While use of retreads gener-ally decreases with average length of haul, perceptions of retread durability is the same for owner-operators across all lengths of haul.