At the recent 60th birthday celebrations for Bandag, I took the opportunity to talk with Heath Barclay, Managing Director at Bridgestone Australia & New Zealand, and Claudio Sodano, Sales Director at Bridgestone Australia, to learn more about the fleets that are using retread truck tyres, and how it’s saving them money and reducing carbon emissions.
I started by asking about the customer for retreads in Australia.
“It’s really the largest, most sophisticated fleets in Australia that use Bandag retreads,” explains Sodano. “Companies like Toll and K&S Corporation are buying retreads because they understand that they’re cost effective. They understand by using retreads they will lower their total cost per kilometre. They measure it, they feel it, they experience it and know it benefits the bottom line.”
And what markets are challenging for retreads?
“The bigger challenge is the customers that go from purchase to purchase that think ‘I’ve got this amount of money and I need to reduce my purchase cost from the start’. And maybe they lack a little bit of a confidence in the quality of a retread.
“So, to combat some of this, what we’ve done in terms of a warranty for a Bandag retread is better than that of a new tyre. A new tyre warranty is on a pro-rata basis. For our retreads, in the unlikely circumstance you have a manufacturing fault, it doesn’t matter if the tyre is basically worn out, as long as it’s legal. We will give you a free replacement and then whatever vehicle damage there is, we will pay for the vehicle damage as well.
“And it’s really simple when you’re talking to the smaller fleets,” says Sodano. “Do you think all these large fleets that are spending $10-20 million dollars a year on tyres, do you think they would be using retreads if they were of poor quality? Or, if they weren’t contributing by improving their total cost per kilometre?
“What we’re finding now, more recently, is the larger fleets, that typically haven’t used them, they’re just gearing themselves to use a greater retread percentage. We’ve got recent fleets now that weren’t using any retreads, that are now using a vast majority of retreads because we’ve been able to put retreads on, and they’re experiencing the mileage, or better cost per kilometre. And we’ve converted fleets over that weren’t using retreads to almost entirely using retreads. But they’ve got to understand it and they’ve got to measure it to understand what the benefit is to the bottom line. Then, they experience running Bandag for a year or two, they have no durability or quality issues. You’ve got to experience them, you’ve got to use them to understand what the benefit is.”
Then we talked about the sustainability angle. According to Bandag, the manufacture of a retread sees a 34 per cent reduction in carbon emissions compared to a new tyre – the equivalent of 73kg per unit, based on a commissioned life cycle analysis of the Bandag process. This reduction is then compounded with each time a tyre is retreaded, to a 51 per cent saving on the third time, or 110kg.
“It’s not just the cost factor anymore,” says Barclay. “There’s also a sustainability factor. A lot of companies now are looking at it from the CO2 emissions that have been generated, and the waste that goes into the waste stream. So there’s a sustainability push, particularly now as we’re seeing large industry asking how our products will reduce their emissions in tender documents.”
“There’s a saving now (financial and in emissions) by using a case and turning it into a retread, and then putting it back through the process as many times as you can, because our technology makes sure that it’s going to be safe and reliable. There’s no reason that we can’t use a new case two, three, or four times as a retread.
“And as you know, scrap tyre pricing is increasing in some states. Now it’s about $25 to dispose of a truck tyre,” adds Sodano. “It’s a fair chunk. Why not retread it?”
Bandag is a global brand, and New Zealand is a big market for Bridgestone, so I asked about the differences in the retread market between Australia and NZ.
“In New Zealand we sell a higher rate of retreads to new tyres,” explains Barclay. “And that’s been historically like that. When you talk about casing value, there is a casing shortage in New Zealand, and there is a difference in size in the New Zealand market – more 19.5″ versus 22.5” in Australia. So there’s a casing shortage. We are looking at ways to combat that with getting them in from other countries or again, extending the usage of that tyre through multiple retread processes. So yes, there is some differences, sizes, availability. In Australia seeing more and more customers wanting to use retreads to manage cost and manage their footprint.”
Being such a smaller country, I asked if New Zealand has the same type of road transport market as Australia?
“Completely different,” advises Barclay. “A lot of primary industry, like forestry, livestock, and diary, there’s not the same level of line haul. Australia’s a huge continent, so there’s a lot of line haul here. In New Zealand, there’s a lot more short distance hauling, but on quite harsh roads – lots of coarse volcanic chip roads, high rain fall, and different camber. The wear rates are lower. So using retreads is good for that because we can extend the life as much as possible using different compounds. Retreading suits New Zealand equally as well.
And finally, I asked about price. Pre-pandemic, shipping a container from China to Australia was cheaper than sending one from Sydney to Perth. This allowed Chinese tyre manufacturers to flood the market with thousands of cheap truck tyres. So post-pandemic, with ridiculously high shipping rates, are we in a sweet spot for retreads and local manufacturing?
“Obviously the difference in the retread is that you’re only importing some of the goods to make the tread,” explains Barclay. “The rest of that happens domestically, so you do have a significant saving when you’re at domestic retreader in terms of the ability to now compete with the alternative of a new tyre from China in terms of landed price into that market.”
Sodano continued, “As you know, all the competitors have increased truck tyre price in market recently. The advantage for us is we didn’t have to increase Bandag retreads as much because essentially the cases are here, we make them here, so we were sheltered a little bit from the ocean freight charges of bringing a new tyre in. And while we did that, some of the other companies offering retreads had to freight the tread, and even freight the cases in. So we were able to provide a lower cost to the end user because we’re making it locally and there’s no roll on effect of the increased ocean freight charges coming into it.”
