Friday 21 November 08 - 22:40
 

Cargo Handling Tyres

Running out of rubber

A widespread tyre shortage is really starting to bite and terminal operators are left with few options when the black stuff wears thin. Alex Hughes reports

Tread carefully: judicious tyre use is the order of the day as supplies dry up

Whispers of a developing problem in the supply of industrial tyres to maritime terminals have been getting louder in recent months. And to add to the suspicions, Port Strategy’s approach to the major tyre companies for comment was met with a wall of stony silence.

However, a chat to terminal operators reveals the  true picture: that of a crisis on the horizon. For one, Cagliari International Container Terminal (CICT), which forms part of the Contship Italia group, states unequivocally that we are passing through a very difficult period as far as the supply of industrial tyres is concerned. It is having more problems than previously in purchasing heavy industrial tyres and is having to book several weeks in advance in order to secure supplies.

“We believe the main reason why the market is so difficult at the moment is that supplies are going mainly to markets in China and India,” comments a terminal spokesperson.

Genova box terminal operator Southern Europe Container Hub (SECH) is also suffering. It characterises the current state of the market as a difficult one, particularly for container terminals. SECH tells PS that it is definitely more difficult at present to obtain heavy industrial tyres.A terminal spokesperson concedes that part of the problem is that manufacturers are now having to produce additional tyres for military campaigns in both Iraq and Afghanistan, which has left civilian users chasing an ever diminishing pool of available industrial tyres.

“We also believe that there is increasing demand in the Far East, where construction companies are asking for ever greater number of tyres, as the number of projects they work on grows,”states the spokesperson. Prices are also on the increase, with CICT experiencing annual hikes in the region of 10%, which it attributes in part to the rising cost of raw materials.

“Our suppliers are advising us to stock up on tyres where possible,but this does have the negative bottom line effect of us having to tie up more capital in these, which are then simply remaining in the warehouse without actually adding any value,” notes the CICT spokesperson.

The terminal does already use remoulded tyres in its terminal as a way of saving money.“We try to keep our tyres in operation as long as possible by periodically checking them over to identify any that need repairs, whilst also insisting that the correct pressure is always maintained.”

In the Middle East Gulf, a similar pattern is emerging. United Arab Emirates-based Gulftainer confirms that demand for tyres is currently much higher than supply. The company believes this is due to the construction boom taking place all over the world, especially in countries like the UAE and Qatar in the Middle East. “We expect this situation to continue for at least another one to two years,”says a spokesman.“Overall, there is a capacity shortage for all off-road tyres. Production capacity cannot be increased overnight, so we are looking at a potentially long-term headache.”

He explains that, because moulds have to be ordered too, the shortage of tyres is being exacerbated, since it can take 12-18 months for a mould to be manufactured and supplied. However, reputable manufacturers have now set up factories in China, where production is under way, which Gulftainer hopes will result in a slow build up in capacity.

“Due to huge demand, manufacturers have increased prices by 20 in the current year and these prices are still expected to escalate, due to the increased cost of rubber and raw materials,” the company tells PS.

To make matters worse, terminal operators are unable to store tyres as a hedge against future shortages.“Whenever tyres become available,they are immediately sold due to the large back orders pending.”

According to Genova’s SECH, the cost of tyres has been on a seemingly ever upward path for some time now, which could be the result of demand outstripping supply, but also because the basic cost of raw materials is on the rise.However, the terminal operator has resisted the temptation to hoard tyres, given the implied extra cost this would have. Instead, a small number of tyres are kept in continuous stock, but sourcing is now done across a small number of suppliers.

“Given this perceived shortage of available tyres, we can only hope that manufacturers are seriously looking at innovative ways of making tyres using new types of raw materials,” comments a SECH spokesperson, who laments the fact that there is still no really good advice out there as to how operators can extend the working life of existing tyre stocks.

As to whether new materials are being experimented with to replace costly existing ones, Gulftainer suggests that tyre manufacturers continue to update their basic products and, from time to time, introduce innovative new compounds as part of their research and development. However, users are not made aware of these until they are proven, tested and successful.

“At Gulftainer, we are well aware that operators should conduct a physical inspection of the tyres on their equipment on a daily basis. They have to check and maintain tyre pressures; look for cuts and other damages and rectify them before they get worse. Many cuts can be repaired if noticed in time and tyres can also be re-treaded if the casings are in good condition.”

Images for this article - click to enlarge

Tread carefully: judicious tyre use is the order of the day as supplies dry up
Boxport blues: container terminals like SECH, pictured here, are finding the tyre shortage particularly difficult

Unless otherwise stated, all images copyright © Mercator Media 2008. This does not exclude the owner's assertion of copyright over the material.

Motorship