[MonteQuest]

Tires. We almost take them for granted. In the post-peak world, tires may be worth their weight in gold, as the saying goes. Why? Tires are basically petro-chemical products. It takes 22 gallons of oil to manufacture one new truck tire, about 6-7 gallons for a passenger car. Retreads use about 1/3 of that, as most of the oil is in the casing. Passenger car tire consumption is approaching 250 million units a year, 50 million of which are on new vehicles. Truck tire consumption is on the order of 50 million, not including about 15 million retreads.

Most people think of a tire as being made mostly of rubber. There are actually many components that go into the construction of a tire. Some of those components include:
1. Raw Rubber 30%
2. Steel
3. Nylon
4. Polyester
5. Rayon
6. Carbon Black
7. Synthetic Rubber
8. Fiberglass
9. Aramid
10. Brass

http://www.tennessean.com/business/arch ... D=56543153


So, what will we do? I envision a rebirth of the railroad system. You don't need tires. You don't need a road; the roadbed and rails are much easier and cheaper to maintain than a highway. The trains are mostly diesel and can haul a bunch of stuff for far less energy. We might see the birth of communities near the railheads and rail-way stations of yore. The long-haul trucking industry will be gone. We won't ship across the country, and if we need to, the trains will do it.

What think ye?

[jato]

Yes. I can see trains being used. Steam trains powered by coal may make a re-appearance. Perhaps a new hybrid of steam turbine/electric motivation. Similar to diesel electric trains now, replacing the diesel engine with a coal fired steam turbine. Or maybe coal fired electric trains using overhead wires.

[pup55]

Gotta tell you some more about tires:

a. Technology exists to make tire compounds that give 3-5% improved vehicle fuel efficiency due to reduced rolling resistance, but the tire companies are sitting on this because you, joe consumer, will not pay an extra $x per tire to get the fuel savings, even if gas is expensive. This goes especially for the big truck fleets and OEM auto companies who do not care about this technology at all if it comes at a premium.

b. Technology exists to make tires that give extra 3-10% fuel efficiency on existing vehicles: It's called a tire gauge. Making sure tires are properly inflated reduces rolling resistance, and directly affects fuel consumption. Also makes it so you do not have blowouts and end up in the ditch.

c. Scrap tires are a good, but stinky, source of energy. They can be burned after use in cement plants and power generation places to recover BTU's. Problem: they contain a lot of sulfur, also heavy metals such as zinc and cobalt, so not good to spew forth into the air.

d. Importantly, retreading has all but died out in North America. 3/4 of the energy input into a tire can be saved by taking the old tire and retreading it a couple of times and extending its life. Technology exists for making good truck retreads (the pieces of scrap you see along the road come mostly from "new" tires). Truck fleets take advantage of this, but due to the fact that passenger tires are made so cheaply now (cost less than a good pair of running shoes) there is no useful life left in the carcass therefore cannot usually be retreaded. This could be fixed by making more heavy-duty carcasses, but, guess what: no one wants to pay a premium for this either. The trend is to make 'em lighter and cheaper.

e. Interestingly, the life of an F16 fighter tire is about 6 landings, and they cannot be retreaded due to the extreme forces on landing. Whole freighters full of tires must accompany aircraft carriers to keep the planes flying.

[MonteQuest]

$this->bbcode_second_pass_quote('pup55', '
')e. Interestingly, the life of an F16 fighter tire is about 6 landings, and they cannot be retreaded due to the extreme forces on landing. Whole freighters full of tires must accompany aircraft carriers to keep the planes flying.

[specsnreds]

I disagree on trucking companies not demanding better tires. I work for the largest north american trucking company and we just had Goodyear build us the G395 LHS to our specs. I personally know the guy that oversees all the Diesel and Tire(maintaince) contracts and he is batshit crazy about fuel economy. We even installed these little mini-heaters in the cabs so that the drivers don't run the engine just for heat. I went to lunch with this guy and talked Peak Oil and he thought that seemed to be a very reasonable theory and may have me speak with the CEO about it at a later date. He also mentioned that the federal govt's strict pursuant of emissions instead of fuel economy forces the development of engines in that direction. Fuel economy has gotten progressively worse as emissions rules are tightened. Now the question is how to balance those two opposing mandates. If you allowed a little more emissions yet drove up MPG sustantially would that maybe reduce overall emissions as well? We'll never know because the focus is clearly not MPG. He commented that we push hard for fuel economy but that govt mandates cause us to be a lost voice. Fuel economy is one of our vital business stats, its constantly being harped on. In the last few years we have also begun moving freight by intermodal train. My feeling is that when Wal-Mart builds its 1st store backed up to a traintrack for delivery its time to watch for massive transporation consolidation across the industry.

[Grond]

$this->bbcode_second_pass_quote('', 'I')nterestingly, the life of an F16 fighter tire is about 6 landings, and they cannot be retreaded due to the extreme forces on landing. Whole freighters full of tires must accompany aircraft carriers to keep the planes flying.

[lowem]

$this->bbcode_second_pass_quote('pup55', 'e'). Interestingly, the life of an F16 fighter tire is about 6 landings, and they cannot be retreaded due to the extreme forces on landing. Whole freighters full of tires must accompany aircraft carriers to keep the planes flying.

[jato]

F-16s do not operate on carriers, it's undercarriage is not strong enough. Carrier aircraft have to be designed with very strong undercarriage. The F-16 was designed to be used by the Air Force. Although the Navy does operate some now, they operate from land bases.

[mgibbons19]

One possibility for crossover technology might be highway trains? We've got the infrastructure in place, and it should be good for about 40 years or so. So, why wouldn't we find a way to use the infrastructure we have to meet some of our transportation needs?

Perhaps a contemporary highway tractor wouldn't be best, but trailers would be pretty easy to retrofit. Rolling resistance on highways would be higher, than a trad train.

In a period of gradually increasing shipping costs, this might not be so far fetched.

[MonteQuest]

$this->bbcode_second_pass_quote('mgibbons19', 'O')ne possibility for crossover technology might be highway trains? We've got the infrastructure in place, and it should be good for about 40 years or so. So, why wouldn't we find a way to use the infrastructure we have to meet some of our transportation needs?

Perhaps a contemporary highway tractor wouldn't be best, but trailers would be pretty easy to retrofit. Rolling resistance on highways would be higher, than a trad train.

In a period of gradually increasing shipping costs, this might not be so far fetched.

[Such]

I work for a large US tire manufacturer - for a number of years. If there are questions, especially in regards to the materials, I'd be more than happy to answer them.

[pup55]

a. The statement above was based on a paper at the International Tire Exhibition and Conference '96, "The Air Force Extended Life Tire Program". I will have to see if there is a free electronic link to the paper. I may be hazy on the details as to plane type, etc. but the presentation was quite interesting. They developed a simulation aircraft capable of duplicating runway conditions for various types of planes, etc. and videoed these things as they hit the runway. The slightest angle change, at the speed these things are going when they hit the deck, causes serious tread wear.
Part of the paper gave some stats on the landing rate on these top gun guys.

http://www.itectireshow.com/index2.asp?Year=1996

b. Whether it is an F-whatever, the point is, these things wear out really fast. My bad on this minor detail.

c. I have personally been in meetings with purchasing and technical types with large and famous tire companies in Akron Ohio wherein we were told that there was no premium for a fuel efficient truck tire, and we can, in essence, shove whatever innovation we came up with to give better rolling resistance unless we were willing to give it away. Now to be fair, it has been some time since this has happened, and they may be willing to revisit some of this. We calculated at the time that $1.25 diesel would be enough to make the trucking companies take another look at some of these compounding alternatives. Maybe your friend that works for the trucking company can tell us if he is willing to pay, say, an extra $20 per tire (new truck tires are in the $150 to $300 range depending on size), to give his truck fleet some better fuel efficiency, in which case PLEASE have him contact his tire company sales guy and tell him this, and hopefully a piece of the action will make it up the food chain to us. Until this happens, I will stick with my original statement.

[pup55]

To further embellish the point on tires, and for the entertainment of the forum, let us consider the sheer scale and magnitude of money that one of these big truck fleets is working with. All this stuff is about 5 year old information got from the horse’s mouth that people would be willing to pay big bucks to a market research consultant to get, by the way, so might be slightly different than current reality, so do not pick at me on details.

A large, well known truck fleet is operating in North America. They own 8000 tractors, with 10 tires each, and 25,000 trailers, with 8 tires each. This means that at a given moment, these guys own a total of 280,000 tires. The tractors travel, on average, 250,000 miles per year, and consume diesel fuel at a rate of on average, 6.6 mpg. The trailers mostly sit around. They do not consume fuel, in and of themselves, but when you move them, their tires start to wear out. Each trailer moves about 100,000 miles per year.

So, at $1.50 per gallon of diesel, this company’s fuel expense is just about $455 million, and a one cent increase in the cost of fuel hits this particular company in the tail end to the tune of $3 million.

It is fairly easy to reduce the rolling resistance of a tire by 10%, with normal technology, but much more difficult to do so without screwing up the treadwear. But assuming you can do so, this 10% reduction in rolling resistance leads to about a 2% increase in vehicle fuel economy. There is a fudge factor that compensates for the size and shape of the vehicle, etc. that is responsible for this difference.

So if this is the case, the 2% fuel economy improvement should give them about an extra $9 million. So, in theory, $9 million divided by 280,000 tires gives about $31 per tire that they should be willing to pay for the innovation that gives them the improved mileage.

But, they do not want to pay this much: For one thing, they do not get it all at once: they must wait and convert their fleet over as their existing tires wear out. Also, there is the problem that the trailers almost always get retreads, and certain positions on the drive axles get retreads, but the steering tires are new, so you have the whole issue of whether an “innovative retread” can be developed, since if you have a mix of innovative and regular tires, the advantage is diminished.

There are a lot of side issues: What if you are the tire manager, and make the decision to change your fleet to fuel efficient tires, and the fuel price drops temporarily, like it just did. You are the world’s biggest idiot, and are out of a job, is what.

The real problem is from the perspective of the tire company. You have a big, capital intense plant, that needs to run all the time. You have several equally big, equally desperate competitors, run by egomainacs who refuse to give way market share, and are willing to undercut you with their innovative tires, just so they can say they are the biggest, so the pie shrinks. You might have to pay your suppliers a little bit for the innovative technology, so you lose that piece of the pie. Plus you have imports coming in that are already $31 cheaper than yours, so as long as they wear as long as your current tires, and fuel efficiency is comparable, there is a point at which a truck fleet will be just as well off to do the cheaper tires and forget about the fuel.

Now, if the fuel were $5 per gallon, the value of the innovation becomes $103 per tire. With a pie that big, it becomes possible to make some changes in your entrenched technology to economize on fuel. That’s why in Europe, this kind of thing is a lot more realistic. The problem in Europe is the truck fleets tend to be a lot smaller and therefore less willing to understand and bother making the change.

If the tire guys really believed in Peak Oil, they would be going crazy with new product development, etc. in the anticipation of the $5 diesel cost, frantically trying to implement the innovations which have already existed at some time to take advantage. Guess what. Instead, they have laid off a lot of R and D types, and basically decided to focus new investment in Asia where the market growth is, and make cheaper tires. Go figure.

If and when, as the forum says, TSHTF, as Murphy’s Law of Uneven Distribution states, it will not be distributed equally. This big trucking company and these big tire companies are extremely vulnerable.

[mgibbons19]

$this->bbcode_second_pass_quote('MonteQuest', '
')Highway trains? Could you elaborate? Retrofit trailers to what?

[specsnreds]

Yes, excellent write up Pup. Also from our recent business statement regarding diesel price changes:

$this->bbcode_second_pass_quote('', 'A') one cent change in price impacts *name removed*'s cost by $175 thousand per month.

[pup55]

Road Trains

this is such a good idea that the Australians have been doing it for awhile, across the outback.

http://members.tripod.com/kingsley-fore ... s/id9.html

There are some photos here of what happens when these things wreck.

I think rail still more efficient fuel-wise.

[Rod_Cloutier]

I also work in the trucking industry- but in Canada. Almost all large carriers in Canada use the railway in one form or another. 28 foot trailers (pups) are carried long distances piggy-back on flat bed rail cars.

And then there is the container revolution. Containers look like large trailers- but with a difference- they can move from truck to rail to ship. A container loaded in China can go by truck to rail to ship then ship to rail to road to the destination country- without ever having to be handled or reloaded.

The big issue with carrier's in Canada right now is fuel surcharges. We pass the increasing cost of fuel right on to customers- altering surcharges week to week based on changing prices. As oil prices go up -the costs are quickly and efficiently passed on to companies moving freight. And those cost go right into the cost paid by the consumer.

[pup55]

I have been thinking of doing some analysis on this whole issue of fuel surcharges, and transportation costs in general, because I always found it pretty stupid that they would ship peaches from california to georgia, and corn from texas to iowa, etc.

I think the farther up the food chain you are, the less the fuel surcharge will affect you. Using the example of shipping a truckload of beef from Omaha to new york, about 1000 miles, used to cost about $1200 (Maybe you can tell me how close this is to current freight rates) so for 40,000 lbs of beef, shipping per pound only comes to 3 cents a pound or so. Even at $10 a gallon for diesel, the fuel charge direct passthrough, at 6 miles per gallon, would only be maybe another 6 cents a pound or so. This little bit of fuel surcharge is not enough to deter you from eating a good Nebraska steak.

Now if you are in the automotive business, maybe a lot different. 6 cents per widget to ship from the widget plant to a sub-assembly place, 6-12 more cents per widget to move it directly to the assemblers, you take 3000 sub assemblies and assemble them into a car in Kansas City and then ship the car to NY when you are done, maybe a lot. How much more, I do not know because it depends on the size of the widget, but the point is, the more complex the end use is, the more this surcharge will affect you, and the more likely joe blow consumer is to be deterred from buying the end product.

The reason the auto industry developed this way was to reduce complexity. It was simpler and slightly cheaper to build a car if you just buy parts from outside suppliers, assemble the parts, rather than make the parts on site and try to figure out how to assemble them, like Henry Ford did. However, at some point in the day, this fuel cost might turn the economics of this stuff upside down. This is kind of what was being said by Montequest the other day to the effect that more expensive shipping will mean decentralization and de-consolidation.

This I think is another miner's canary. Watch for people starting to do this.

[jato]

$this->bbcode_second_pass_quote('', 'H')owever, at some point in the day, this fuel cost might turn the economics of this stuff upside down.

[MonteQuest]

$this->bbcode_second_pass_quote('jato', '')$this->bbcode_second_pass_quote('', 'H')owever, at some point in the day, this fuel cost might turn the economics of this stuff upside down.