Santa Ana, CA – Three years in, the pandemic has altered the commercial truck industry, including the tire segment. In this Q&A, Dan Funkhouser, Yokohama Tire vice president of commercial tire sales, looks at the ways the industry has adapted to the changes and what to expect moving forward.
Has the trucking industry fully recovered from the effects of the pandemic?
Dan Funkhouser: I don’t think recovered is the correct term. I think adapting to the changes caused by the pandemic is a better way to look at it. Trucking, like every other industry, had to make changes in order to limit the impact of the pandemic. Some of those, such as the use of technology to communicate, will remain and help in the future. Others, like the driver shortage, which existed before the pandemic, continue to cause issues.
Question: How has Yokohama adapted?
Funkhouser: We’ve adjusted very well to the post-pandemic world. We embraced on-line meeting techniques and evaluated travel policies to make sure we are as efficient as possible in how we go to market and service our channel partners. Our team was out in the field, where possible, the entire time. We focused on remaining close to customers and end-users and did not slow down on new product introductions.
Question: How will 2023 shape up for Yokohama and the commercial tire market?
Funkhouser: The market continues to be in flux. To be successful in 2023, you must remain focused on why you are in business. At Yokohama, filling our customer needs and solving their issues will always be our top priority. By focusing on their needs and the opportunities they offer us, we will achieve our business goals for 2023 and will continue to support the growth of our customers
Question: Which industry issues will have the largest impact on the market in 2023?
Funkhouser: The supply chain issues remain up in the air. We went from not having enough equipment and extremely high rates to a surplus capacity and rates decreasing. Other issues are also at play: Inflation will continue to lower the purchasing power of the public. Lower purchases will lower manufacturing and thus lower demand for trucks. Potential recession: A slowdown in the economy will cause a slowdown in trucking demand. Driver shortages: This has been an issue for a number of years and will continue to be. There was a loss of drivers during the pandemic and many of those probably won’t be replaced.
Question: What’s the major concern for Yokohama?
Funkhouser: Anything that would slow down the economy is obviously a major concern.
Question: What are the biggest issues for fleets these days?
Funkhouser: Overall, the workforce shortage. This includes both drivers and mechanics. There are not enough drivers to carry all the freight that is available. Another big issue is the lack of mechanics. This affects everything from repairs and overhauls to just general and scheduled maintenance. Tires are one of a fleet’s biggest expenses, and not maintaining air pressure increases not only the tire bill but also increases fuel consumption. Not doing both of these will have a negative effect on the equipment and the fleet productivity and profitability overall.
Question: What new trends do you see for the industry in the next few years?
Funkhouser: Communications have always been vital, especially
between the fleet and the servicing dealer to ensure they have the correct product needed in inventory. A trend you’ll see is the way this type of technology has improved and been adopted, which is so important right now due to the ongoing supply chain issues.
Question: Will the last-mile delivery segment continue to grow?
Funkhouser: Last mile will continue to grow, but not at the rates we have seen in the past. The cost of those deliveries has increased and consumers are starting to feel the pinch.
Question: How’s the ultra wide-base market doing?
Funkhouser: Yokohama continues to see double-digit growth in our UWB business year-over-year, thanks to extended treadwear (the original miles of our 902L drive tire is best in class) and enhanced fuel economy. Also, as demand for our UWB product continues to grow, our servicing dealer and truck stop providers are keeping more product in inventory to ensure our fleet customers’ needs. We also offer a complete line-up from drive tires, 902L and 709L; to trailer, 114R and 109L; and our newest offering, the 716U, for use in the refuse application. Lastly, our fleet customers tell us Yokohama has the most retreadable UWB casing in the industry.
Question: Will electric trucks and self-driving trucks gain traction?
Funkhouser: They will, but it’s not going to be an overnight change. Battery technology, charging infrastructure, acquisition costs and the required operational investment have a long way to go before we see a massive shift in this direction. For now, and into the near-future though, we’ll continue to see adoption on smaller scales and specific operations, and locations.
Question: How will all the major mergers/acquisitions affect the industry?
Funkhouser: Both the dealer and fleet mergers and acquisitions we’ve seen thus far will continue. The dealers are growing their footprint to provide better service to their fleet customers. Fleets are going to need at least two brands of tires to ensure they have the product needed to keep the trucks on the road. Yokohama has partnered with the best servicing dealers in the industry. These mergers and acquisitions offer us opportunities to grow our business as our partners grow.
Question: Any new sectors to watch?
Funkhouser: Not ‘new sectors’ per-se, but as mentioned, we expect last mile to continue to grow and we’re expecting a rebound in and around the oil fields, which were relatively slow in 2022. Regional applications and operations as a whole will be a driving force in 2023.
Question: What’s new for Yokohama in 2023?
Funkhouser: Yokohama Tire Manufacturing Mississippi (YTMM) set new production standards in 2022 in volume and quality. This momentum will carry into 2023 and beyond and help us launch new products faster. The team assembled in Mississippi continues to build best-in-class tires. YTMM has produced several of the new products we have introduced in the U.S. market, including the 504C, 505C, 712L, 715R and our soon-to-be-launched 114R regional trailer tire.
Also, what’s old is new again. This year marks the 11th anniversary of our extremely successful SmartSolution marketing campaign. This program summarizes everything that makes Yokohama the go-to company for fleets that demands the lowest cost-per-mile product.
SmartSolution is built upon our four market pillars: LEAD (Longevity, Availability, Efficiencies and Dependability). Longevity is about delivering the longest, cradle-to-grave life of any tire in the industry. Availability means we have partnered with the premier dealers, truck stops and OEMs so our tires are accessible just about anywhere a fleet would be asked to travel. Plus, our dedicated sales are always available to answer any questions that our customers have.
Efficiencies signify Yokohama’s total dedication to producing extremely fuel-efficient products. That continues today with tread designs, tread compounding and our casing technology. When you put everything together you get Dependability: from the performance of the product during the original life and into the retreading stages, to the Yokohama team who are always there when needed. And finally, to our sales network and partners who have the product and the best servicing capabilities in the industry to keep your fleet rolling down the highway.