Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/449261
MTD January 2015 West Coast port problems North American container port demand has increased signifcantly the last three years. Record tire imports have added to the congestion problems at ports, especially in Los Angeles and Long Beach, Calif. Te Long Beach Board of Harbor Commissioners recently approved measures to relieve congestion. It also petitioned the Federal Maritime Commission "for permission to work in concert with the neighboring Port of Los Angeles." Te Port of Los Angeles also wants to work together. Te Commission gave preliminary approval "to a cap of four days for parking or dockage fees charged by the port to ships at berth," according to the Port of Long Beach. "Due to delays in cargo movement, ships have needed to stay at berth longer and have had to pay higher fees. With the dockage relief, the Port would forgo an estimated $150,000 in fees by allowing longer stays without charge during stays from Dec. 1, 2014, through March, 31, 2015." Te development of a new generation of "mega ships" and a shortage of "truck trailer frames used to haul cargo containers" have been partially blamed for causing botlenecks at ports around the country. Increased trade, although desired, has simply exacerbated the problems. Te growth of e-retailing , or e-tailing Tere is no question retail tire sales over the Internet are increasing. But at what rate? And what is the percentage of consumers who buy them online? W hen American Tire Distributors Inc. (ATD) launched TireBuyer.com in 2008, it estimated 3% of the tires sold in the U.S. — more than 7 million tires — were being sold to consumers over the Internet. According to its own research, consumers between the ages of 18 and 34 years of age, espe- cially women, were more likely to purchase tires online "and to shop exclusively online." W hen asked how likely they would be to purchase tires online in the future, 30% of the consumers surveyed by ATD indicated they were "very or somewhat likely" to do so. In 2013, Mathew Walker, managing director of Tireweb Marketing Inc., was quoted as saying 90% of shoppers preferred to purchase tires in the store. "We also know most of them start their research online, and about 50% will leave a website if it doesn't have pricing information on it." Te 2013 "Google Auto Tires Purchase" online study de- termined 10% of consumers purchased tires online in 2012. Tat jumped to 29% in 2013. Online tire buyers also were spending more money per tire, and considering more brands during online research. In terms of online purchasing dollars spent on automotive replacement parts, three categories represented half of the e-tail dollar volume in 2013 and none of them were tire- related. According to the Auto Care Association's "E-Tailing in the Automotive Afermarket" report, the top three product categories were braking systems, primarily pads and shoes; ignition and engine (fuel pumps, alternators, ignition coils, etc.); and glass, mirrors and lamps." When even Wal-Mart Stores Inc. is investing a considerable sum of money on e-commerce at the expense of store growth, retail sales online cannot be ignored. It should be noted, however, that for now, online-only retailers don't have to pay sales tax. Tat may change soon. "Te Marketplace Fairness Act" grants states the authority to compel online and catalog retailers, no mater where they are located, to collect sales tax at the time of a transaction. Tat would put them on a level playing feld with local retailers. However, the act requires states to simplify their sales tax laws before they can receive "collection authority." Simplifcation is required because two Supreme Court rul- ings cite "concern that collecting sales tax for multiple states would be too difcult." ■ Facts section: Tire shipments Chart 7 WORLD LEADERS IN NEW TIRE SALES (fscal year 2014; in billions of U.S. dollars 1 ) Tire company 2014 2013 Bridgestone Corp. $29.3 $31.0 Groupe Michelin $24.4 $25.5 Goodyear Tire & Rubber Co. $17.8 $18.9 Continental AG $12.9 $12.7 Pirelli & Cie SpA $8.0 $8.1 Sumitomo Rubber Industries Ltd. $6.9 $7.0 Hankook Tire Co. $6.4 $6.5 Yokohama Rubber Co. 2 $4.8 $4.9 Cheng Shin Rubber Ind. Co. Ltd. 3 $4.3 $4.5 Cooper Tire & Rubber Co. $3.5 $3.4 Kumho Tire Co. Inc. 2 $3.3 $3.4 Toyo Tire & Rubber Co. Ltd. $3.0 $3.0 U.S./CANADIAN LEADERS IN NEW TIRE SALES (fscal year 2014; in billions of U.S. dollars) Tire company 2014 2013 Bridgestone Americas Inc. $8.8 $9.3 Goodyear Tire & Rubber $7.3 $8.0 Michelin North America Inc. $7.3 $7.7 Continental Tire the Americs LLC $2.8 $2.8 Cooper Tire & Rubber $2.6 $2.5 Toyo Tire Holdings of America Inc. $1.5 $1.5 Hankook Tire America Corp. $1.3 $1.3 Yokohama Tire Corp. $1.3 $1.4 Sumitomo Rubber Industries 4 $.90 $.91 Kumho Tire U.S.A. Inc. $.70 $.74 Pirelli Tire North America $.64 $.65 1 The average exchange rates between foreign currencies and the U.S. dollar differed from 2013 to 2014 as follows: Japanese yen, up 8.2%; Korean won, down 3.7%; Taiwan dollar, up 2.2%. The euro was relatively unchanged. 2 Yokohama Rubber Co. and Kumho Tire Co. Ltd. signed a Memorandum of Understanding on Nov. 29, 2013. As part of the strategic alliance, the companies will share resources to "jointly pursue research and development of tire related technologies to compete with the Big 3," according to Kumho. 3 The Cheng Shin Rubber USA Inc. subsidiary does business as Maxxis International. 4 Sumitomo Corp. of America is run independently of Sumi- tomo Rubber Industries. 34