Adopting Tire Inflation Systems
Why are adoption rates for proven fuel-saving technologies so low? It looks like a classic case of stepping over a dollar to pick up a dime.
December 2013, TruckingInfo.com - Department
Talk about perseverance. Pressure Systems International is celebrating 20 years in business this year. PSI began pumping its automatic tire inflation systems into the market in 1996. Since then, with about 675,000 units delivered worldwide, PSI Executive Vice President Frank Sonzala, estimates the company has captured maybe 25% of the total available trailer market in North America.
ATIS and TPMS do more than prevent good tires from coming apart. ROI also includes improved fuel economy, longer tread life and higher casing value.
Sonzala says the first years in the market, 1996 to 2004, were challenging. Fuel was still relatively cheap, and tires were too. Few but the really forward-thinking fleets even let him in the door, so to speak. After partnering with Meritor in 1999, it was another four years before things began moving. Since 2005, except for the Great Recession, the graph has been climbing steadily.
While PSI deserves credit – as would any company – for remaining in business 20 years, it’s shocking that a product with relatively tame upfront costs that can save fleets money in so many ways has taken so long to catch on.
The story is similar at all the suppliers of tire inflation and pressure management systems, not just PSI. In July, the North American Council for Freight Efficiency, in partnership with Cascade Sierra Solutions, released a report called Barriers to the Increased Adoption of Fuel Efficiency Technologies in the North American On‐Road Freight Sector.
Using results from a hundreds-deep fleet survey and dozens of follow-up interviews, NACFE identified five key bottlenecks to nationwide implementation of available technologies that could deliver thousands of dollars in fuel savings. The first report, focusing on tire pressure monitoring systems and automatic inflation systems, cites a lack of credible information on payback as the largest hurdle. That was followed by a lack of access to capital, insufficient reliability, the high initial cost of trucks and unavailability of technology.
The pool from which the NACFE survey drew its conclusions contains 40,000 tractors and about 60,000 trailers. Among the fleets responding to the survey were NACFE members, described by executive director Mike Roeth as “probably a small slice of the industry, but generally ahead of the adoption curve and with a very scientific approach to equipment acquisition.”
Among that group, adoption rates for automatic inflation systems was at about 35% in 2012. Adoption rates for trailer tire pressure monitoring systems was about 10% and for tractors about 2%.
All about payback
Most fleets and owner-operators in the NACFE survey indicated they expect a payback on a fuel-saving product in 18 to 24 months, or in the first half of a three- to four-year trade cycle.
In recent years, several independent studies of ATIS and TPMS technologies – including a two-year study of two fleets conducted by the Department of Transportation – concluded there were indeed quantifiable benefits to both types of systems. Chris Flanigan of the Federal Motor Carrier Safety Administration’s Office of Analysis, Research and Technology shared the results of the agency’s Tire Pressure Monitoring Field Operational Test at the Technology and Maintenance Council annual meeting in Tampa, Fla., in 2012.
“The program goals were to assess the cost/benefit, to determine if the systems could influence maintenance intervals in a positive way and to determine their impact on performance and safety,” Flanigan told the group. “We saw an increase in fuel economy in both fleets of 1.4%. Based on current fuel costs [about $4 a gallon] and equipment costs of about $1,500 per tractor-trailer unit, the ROI comes in under one year.”
Asked to account for the apparent discrepancy between what the fleets say they need and what tire technologies have proven to deliver, Roeth said it comes down to awareness of costs.
“ATIS and TPMS offer three benefits, in varying degrees: fewer roadside breakdowns, longer tire life and better fuel economy,” Roeth says. “Rarely in our interviews did we come across a fleet that looked at all three. They typically focus on one or two out of the three, usually breakdowns and tire wear, which led us to conclude that fleets are being a little conservative in recognizing all the benefits.”
Roeth says one TPMS supplier told him during the follow-up interviews that his first question to a potential customer is about tire costs.
“When I talk to a fleet for the first time, I ask them what their tire expenses are,” the supplier rep told Roeth. “If they can’t tell me quickly what their costs are, I leave and go find a fleet that can.”
Roeth called that anecdote a real eye-opener. “That supplier recognized that there was no point trying to sell a cost-saving system to a fleet that isn’t aware of its costs.”
Maybe “a lack of credible information on payback” means, “we don’t know how much this device will save us so we’re not going to buy it.”
More wheels means more exposure to tire problems, and greater potential for savings.
Coveralls or pinstripes
NACFE’s report details many reasons that came out in follow-up discussions that offer some insight into the spec’ing decision. Maintenance managers, while excited about the prospect of reducing the human and capital costs of tire maintenance, were afraid the devices would add another layer of maintenance to their overburdened shoulders. The finance people were concerned more with acquisition costs rather than life-cycle costs.
“On an order of 5,000 trailers, our system would add about $3.5 million. That’s a lot of money to find in the budget,” Sonzala says. “That’s why we’re now talking with the financial officers as well as the maintenance people. The numbers are out there. The savings we have documented speak for themselves. When we have the chance to explain it to the financial people, they can make sense of the equation.”
One fleet owner from Iowa, who was used to changing out all his trailer tires at least once every 16 months, told Sonzala that after 24 months of using the Meritor Tire Inflation System from PSI, those tires were still in service and would probably run a few more months.
“He gained at least six months wear from the tires, which translated into a saving of $576,000 for a 1,100-trailer fleet,” Sonzala says. “And that doesn’t include savings on road calls or fuel.”
The fleet owner also reported a total elimination of tire attention from the DOT. “They see the hoses on the wheels and just move on,” Sonzala says.
“The barriers are coming down,” Sonzala admits, “but it’s taken a decade worth of data and reports to make the case.”
Likewise for the TPMS crowd. Phil Zaroor, president, CEO and founder of PressurePro, says the doors are opening up more easily today than they once did. It was data that made the difference. Partnering with telematics providers allowed the product to demonstrate its own capabilities, he says.