Why Are Tires a Key Factor in Optimizing Carrier Costs?

New regulations, environmental requirements, and innovations are shaping the truck tire market
Tires-a-Key-Factor-in-Optimizing-Carrier-Costs

Although their share cannot compare to wages or fuel, the procurement and replacement of tires represent a significant component of every carrier’s operational costs. According to industry estimates, tire costs can account for between 2% and 4% of the total operating costs of transport companies. This percentage may be higher for those transporting heavy loads or operating on challenging terrains, where wear and tear are more intense, and replacements are more frequent.

Increases in tire prices, whether due to inflation or new regulations, always place additional pressure on businesses and to some extent influence transportation prices.

The International Road Transport Union (IRU), in its latest report on price trends, noted that despite a decrease in transportation demand during 2024—which led to lower prices—rates remain significantly higher than in 2021, primarily due to the structural increase in operational costs. For instance, the cost index for vehicle insurance rose by 20 points, maintenance and repair costs by 21.9 points, and tire costs increased by 20.89 points over the past three years, mainly due to new regulations requiring better tire performance, which has driven up prices. All of this, combined with factors such as labor shortages and diesel market turbulence, has kept transportation prices at a certain level even in situations of reduced demand and economic crises.

Moreover, 2021 was a landmark year as the so-called EU tire label became mandatory. This initiative was introduced to improve transparency and inform consumers about key tire characteristics. The label provides information that helps buyers choose energy-efficient and environmentally friendly tires.

Analysts have recently predicted that the European Union’s new regulation—the European Deforestation Regulation (EUDR)—could pose an additional challenge for transport companies in 2025 and lead to increased tire prices.

The new EU deforestation regulation, which was initially set to take effect in December 2024, requires companies trading in beef, cocoa, coffee, palm oil, rubber, soy, and timber—as well as products derived from these raw materials—to conduct extensive supply chain due diligence to ensure that their goods are not produced in processes involving recent forest degradation. Although its implementation has been postponed by 12 months, this does not mean it should be ignored; companies will have more time to prepare and consider its impact on their supply chains. The new deadlines are December 30, 2025, for large operators and June 30, 2026, for small and medium-sized enterprises (SMEs).

If EUDR seems too distant to have a direct impact on the truck tire market and the transport business, remember that Germany’s Supply Chain Due Diligence Act recently drew public attention to this very topic. Serbian, regional, and German media reported that a major global truck manufacturer had suspended collaboration with a Serbian tire factory due to human rights violations, which are against this law.

What Affects Tire Prices

Regardless of regulatory changes, there is concern that manufacturers might raise prices due to other challenges they face, as well as numerous financial pressures.

The main factors affecting tire prices include labor costs, supply chain issues, research and development (e.g., for electric vehicles), raw materials (natural rubber prices are expected to remain under pressure due to shortages and diseases like white root rot), and the supply-demand balance (which is indirectly affected by transportation demand).

Tire manufacturers are likely to argue that they face constant pressure from all these factors: global inflation has increased wages, the war in Ukraine continues (although supply chains have somewhat adapted), and they are also dealing with the dual challenges posed by EU regulations and electric vehicle development. It is highly likely that truck tire prices in 2025 will face upward pressure due to inflation, raw material costs, and environmental regulations. However, factors such as a global economic slowdown or reduced demand in China could partially offset the price increase. The coming months will reveal how these factors evolve and impact truck tire prices.

Why It’s Important to Invest

Unfortunately, road transport is among the industries most responsible for pollution. Three main factors influence fuel consumption and, consequently, CO2 emissions: the vehicle’s propulsion system, aerodynamics, and tire rolling resistance. This makes it clear that choosing the right tires, maintaining proper pressure, and ensuring regular replacement and maintenance are important not only for controlling fuel costs but also for achieving environmental goals.

It’s also important to note that tire pressure control is crucial not only for fuel consumption but also for preventing accidents, which can be particularly serious for heavy vehicles. This is evidenced by the fact that the EU has included tire pressure monitoring systems (TPMS) as mandatory for all new trucks starting in the summer of 2024. These systems inform drivers in real-time about any changes in tire pressure (whether it increases or decreases) and help prevent critical situations.

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