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Why Tire Pressure Monitoring Systems Saves YOU Money !

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Transcript of "Why Tire Pressure Monitoring Systems Saves YOU Money !"

  1. 1. Rev  5/20/13   1  /  4   Tiro  Technologies   Payback  Report         TiroGage ™ Payback  Report  Based  on  Primary  Source  Literature  for   TPMS  Benefits  Published  by  NHTSA,  FMCSA,  USDOT,  and  Other   Public  and  Private  Agencies.   The  following  payback  analysis  is  based  in  part  on  averages  from  the  Technology  and   Maintenance  Council  of  the  ATA  and  the  findings  of  various  research  reports.    These   reports  include  the  NHTSA’s  Commercial  Vehicle  Tire  Condition  Sensor  Study  (CV  Sensor   Study,  2003),  the  FMCSA’s  Tire  Pressure  Monitoring  and  Maintenance  System   Performance  Report  (TPMSSP  Report,  2007),  the  NHTSA’s  Evaluation  of  the   Effectiveness  of  TPMS  in  Proper  Tire  Pressure  (Sivinski,  R.,  2012,  November),  and  many   other  federal,  public,  and  private  date  resources.  Tire  and  other  specific  costs  for   different  fleets  will  vary  in  many  regards,  including  current  tire  pressure  maintenance   (TPM)  procedures,  in-­‐house  or  outsourced  TPM,  retread  policies,  wages,  current  fuel   costs,  etc.  Different  costs  for  tires  at  different  wheel  positions  (in  the  calculation   portion)  are  also  based  on  various  industry  reports  and  private  surveys.    Primary  public   data  references  are  available  on  our  web  site  at  www.tirogage.com.   A  general  statement  on  tire  inflation  issues  by  Ms.  Peggy  Fisher  from  2001:   "The  cost  of  poor  tire  maintenance  is  huge.  Tire  related  costs  are  the  single  largest  maintenance  cost  item  for   commercial  vehicle  fleet  operators.  Nationwide,  average  tire  related  costs  per  tractor-­‐trailer  are  about  1.9  cents   per  mile  –  or  about  $2,375  for  a  125,000  annual  mileage  operation.  For  the  average  fleet  in  the  U.S.  improper  tire   inflation  increases  the  annual  procurement  costs  for  both  new  and  retread  tires  by  about  10-­‐13%  and  fuel   economy  loss  due  to  poor  tire  inflation  is  about  0.6%  for  typical  truckload  (TL)  and  less-­‐than-­‐truckload  (LTL)   operations.       Improper  tire  inflation  is  also  responsible  for  about  1  road  call  per  year  per  tractor-­‐trailer  combination.  A  road  call   averages  about  2.55  hours  of  lost  travel  time  and  costs  the  typical  fleet  operator  about  $750.  This  does  not  include   the  cost  of  a  new  tire,  driver  delay  wages,  lost  customer  goodwill,  or  penalty  charges  for  late  freight  delivery."     -­‐-­‐  Peggy  Fisher,  President,  Fleet  Tire  Consulting          Technology  and  Maintenance  Council  of  the  American  Trucking  Association          Chairman,  Tire  Debris  Prevention  Task  Force,  ATA          Chairman,  Tire  &  Wheel  Recommended  Practices  Update  Task  Force,  ATA         Since  2001,  the  per  mile  tire  costs  have  increase  to  approximately  2.4  cents  per  mile,  or  about   $3,000/vehicle/year  for  a  125,000  annual  mileage  operation.  
  2. 2. Rev  5/20/13   2  /  4   Tiro  Technologies   The  financial  implications  of  poor  TPM  practice  do  not  stop  with  the  above.    Countless  studies  show  that   underinflation  leads  to  wasted  fuel,  prematurely  worn-­‐out  tire  tread,  needless  costs  of  tire  blowout  and  both   penalties  and  lost  customers  as  a  result  of  missed  delivery  schedules.    The  end  result  is  that  at  least  20%  of   trucking  companies’  maintenance  budgets  now  go  to  tires  and  tire  problems,  vying  for  second  place  with  fuel   and  labor  in  overall  operating  costs.    Tire  problems  account  for  over  half  of  all  on-­‐road  problems,  with  electrical   problems  coming  in  a  distant  second  at  about  16%  cumulatively.     Large  commercial  carriers  in  the  United  States  have  generally  been  slow  to  invest  in  electronic  tire  pressure   monitoring  systems  (eTPMS)  before  they  find  out  what  is  in  store  for  them  when  the  NHTSA  extends  the  TREAD   Act,  (SAE-­‐J2848)  to  the  commercial  realm.      They  find  current  electronic  TPMS  costly  and  the  ROI  ambiguous,  and   have  been  slow  to  adopt  the  new  technology  until  their  competitors  are  equally  compelled  by  government   action.    Major  criticisms  of  many  available  commercial  TMPS  include  system  complexity,  high  upfront  capital   costs,  and  ambiguous  total  costs  of  ownership  (TCO),  which  all  contribute  to  the  ambiguous  ROI.  TiroGage™ addresses  these  criticisms  directly  by  providing  a  simple  solution  at  a  reasonable  upfront  cost  and  predictable   TCO.  Herewith,  a  more  detailed  analysis  on  potential  costs  that  can  be  mitigated  with  better  TPM.      
  3. 3. Rev  5/20/13   3  /  4   Tiro  Technologies   Payback  Analysis   Fuel     Fuel  Consumption,  Large  Fleet     1)  In  the  U.S.  overall,  0.6%  fuel  economy  is  lost  due  to  under  inflation       a) Average  rig  travels  125,000  miles  per  year       b) b.  125,000  /  6  miles  per  gallon  x  $4.01/  gallon  diesel    x  .006  =   $501       Labor       Preventive  Maintenance  Labor,  Large  Fleet     2) Pre-­‐trip  PSI  checks  every  3000  miles  =  41.67  checks  yearly  @  20  min  apiece,     or  13.89  hours  annual.    At  $15.6/hr    driver  wages  comes  to   $217   Blowout       Blowout  Roadside  Assistance  Fee,  Large  Fleet  (average  cost  is  higher)     3) One  road  call  per  rig  per  year  due  to  blowout,  due  to  under  inflation.     $388   Blowout  Driver  Labor,  Large  Fleet     4) 4.  2.5  hours  lost  on  average  x  $34/hr.   $85   Blowout  Tire-­‐Replacement,  Large  Fleet     5) Steer  tires  only  rarely  blow  because  of  consistent  loads  &  frequent  checks.     6) An  average  of  one  blowout  per  rig  per  year  is  due  to  underinflation.       a) 5%  of  the  time,  this  blowout  occurs  with  a  drive  original  tire.     b) 7%  of  the  time,  this  blowout  occurs  with  a  trailer  original  tire.     c) 45%  of  the  time,  this  blowout  occurs  with  a  drive  retread.     d) 43%  of  the  time,  this  blowout  occurs  with  a  trailer  retread.     7) Steering  tires  cost  for  large  fleets.   $315   Drive  tires  cost  for  large  fleets.   $305   Trailer  tires  cost  for  large  fleets.   $272   Retreads  relined  onto  original  sidewalls  cost  for  large  fleets.   $125   8) Blowouts  occur  on  average  about  halfway  through  a  tire’s  expected  tread  life.       9) Each  blowout  requires  an  original-­‐tire  or  new-­‐retread  purchase       a) 5%  x  avg.  $305  for  drive  original  tire    x    one-­‐half  expected  life  =   $6.1   b) 7%  x  avg.  $272  for  trailer  tire    x    one-­‐half  expected  life  =   $7.8   c) Drive  retread  45%  of  the  time,  generally  relined     45%  x  avg.  $125  for  relined  original  tire    x    one-­‐half  expected  life  =   $27.7   d) Trailer  retread  43%  of  the  time     43%  x  avg.  $125  for  relined  original  tire    x    one-­‐half  expected  life  =   $26.3   Other  Blowout  Costs,  Large  Fleet     10) Vehicle  overhead  costs  computed  at  $1.25  per  mile.     a) 60  miles  per  hour  used  as  overall  speed.     b) 2.55  hours  lost  time  x  60  miles/hour  x  $1.25  per  mile  =   $191   11) Penalties,  lost  revenue  for  late  delivery,  and  lost  revenue  for         interruption  of  trucking  and  supply  schedules.5    =   $240      
  4. 4. Rev  5/20/13   4  /  4   Tiro  Technologies   Payback  Analysis  (cont’d)   Tread       Tread  Life,  Large  Fleet     12) Average  rig  travels  125,000  miles  per  year.     13) Steering  tires  last  200,000  miles,  then  must  be  replaced.       2  steering  tires  x  $315  x  125,000  /  200,000  (per  rig  per  year)  =     $  393.75     14) Fleets  retread  drive  and  trailer  tires  2  times.       a) 66%  of  drive  and  trailer  tires  on  road  would  be  retreaded  from  current   sidewalls.     b) 34%  of  drive  and  trailer  tires  on  road  would  be  original  tires.     15) 8  Drive  tires  x  34%  are  original  tires  =  2.7  drive  tires  are  original  tires         16) 2.7  tires  x  $305  x  125,000  /  175,000  (per  rig  per  year)  =   $  588.21   17) Trailer  original  tires  last  162,500  miles  on  average.       a) 8  Trailer  tires  x  34%  are  originals  =  2.7  trailer  tires  are  originals         b) 2.7  tires  x  $272  x  125,000  /  162,500  (per  rig  per  year)  =   $  564.92   18) Retread  tires  last  125,000  miles.     a) (8  drive  tires  +  8  trailer  tires)  x  66%  are  retreads  =  10.6  tires  are  retreads         b) 10.6  retreads  x  $125  x  125,000  /  125,000  (per  rig  per  year)  =   $1,325   19) Total  tire  replacement  costs  per  rig  per  year     $381  +  $588.21  +  $564.92  +  $1325  =   $2,859.13   20) Under  inflation  increases  tread  wear  an  average  11.5%,  x  $2,859.13  =   $328.8       21) Under  inflation  has  already  caused  1  out  of  the  16  non-­‐steer  tires  to  blow.     15  /  16  x  $328.8  =   $308   Total  loss  per  rig  per  year  due  to  underinflation  (1.+2.+3.+4.+9.+10.+11.+21.)     =   $1,998   Average  %  of  loss  mitigated  by  TPMS  per  Commercial  Vehicle  Tire  Condition  Sensor  Study   (2003)     80%   Total  Cost  Mitigation=(80%)  x  $1,998  =   $1,598   Payback     Payback  Calculation  for  Large  Commercial  Carrier     22) TiroGage™  costs  $49.95  x  18  +  (8  inside  duals  x  $9/  valve  fitting)  +  (1.5h   installation  x  $30/h)  =  $1,016  per  18  wheels     $1,016  /  $1,598    x    12  months  =  Payback  in.   7.6  months      

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