Lunch with Edouard Michelin December 5, 2005 – The 18-wheeler is going the way of the dinosaur. Difficult to believe those long-haul vehicles that put on over 130,000 miles per year, averaging 6 mpg and use 18-wheels to haul everything in your entire house are going away, but they are. And the happiest company to see them go is the Michelin tire company.
Founded in 1889, the family-run firm has been a leading innovator since inception. Yesterday CEO Edouard Michelin sat down to lunch with a group of foreign journalists in Greenville, SC. There were many questions about the tire industry and how Michelin ranks in that industry. There were questions about Formula One that Mr. Michelin answered with safety issues and finished by saying he wouldn’t mind reducing the number of race teams they sponsor.
The question that grew the most passion from Mr. Michelin was the importance of Challenge Bibendum to Michelin. Challenge Bibendum was founded by Michelin to bring all countries together with a commitment to improving the state of the world in the field of transportation. The theme of the last Bibendum rally in Shanghai was “Rallying together towards sustainable mobility.” The Challenge Bibendum is fast becoming known as the catalyst for developing solutions to pollution and ways of getting off the dependence on fossil fuels.
“People ask me how much we spend on sustainability. We spend $18 billion a year making good tires. Challenge Bibendum challenges all companies about mobility problems, accidents, safety, and congestion. It has to be your mission to research your behavior to be in sync with a better future in your field. Michelin is fully aligned with this for the future.”
According to Thierry Coudurier, Worldwide President Michelin, “Michelin spends 4.5 percent of sales on research and development on what we call durable technologies. This includes design, sculpture, and grooves. The X-One truck tire, which replaces two truck tires, saves 5,000 liters of gas per year. You can heat your house with that.”
These innovations are paying off for Michelin. Michelin is the world’s largest tire maker, with 20 percent of the global market. It is the exclusive supplier to the Space Shuttle and has contracts with the military.
Michelin’s technological prowess lies in creating more profit for its customers. The average cost for tires per year for a trucker is 2-3 percent of the total operating expenses. Conversely, the average profit margin for a trucker is 2-3 percent per year. Fuel is 20-30 percent of a truckers cost. Fuel economy is a variable expense to truckers that means more profit in their pocket if they can find a way to be more fuel efficient. Michelin has designed tires, called X-ONE, with lower rolling resistance (by reducing the number of flexing sidewalls) that reduces fuel consumption and increases payload. Fewer wheels also means fewer tires to mount, dismount, inspect and rotate, resulting in less maintenance and driver downtime.
Replacing two conventional dual tires with a single X-One can save as much as 4 to 10 percent in fuel costs, according to Luc Luc M. Minguet, Executive Vice President of Michelin North America and increase payloads from 800 to 1,300 pounds extra if X-Ones are installed on both tractor and trailer.
The X-One has been available since 2000. Contract Freight Inc (CFI), 16th largest truckload carrier in the Unites States, uses Michelin tires exclusively. CFI is in the process of retrofitting their trailers, and when they buy new tractors and trailers, they will be with the X-One brand. The X-One tire is about the same cost as two dual tires. The extra expense comes in retrofitting the wheels; that is about $1,000 more, but Michelin gives a $400 credit to truckers willing to retrofit.
According to Glenn F. Brown, Chairman CFI, “The X-One tires are safer, and they provide us with better fuel mileage than dual tires on the same wheel. We estimate that the fleet fuel mileage savings are 2/10 of a mile per gallon per tractor and 3/10 a mile per gallon on trailers. At $2.00 a gallon, which we haven’t seen in some time, that equates to over $4 million in annual savings.”In a white paper written by the USEPA entitled “Effect of Single Wide Tires and Trailer Aerodynamics on Fuel Economy and NOx Emissions of Class 8 line-haul tractor-trailers,” tests were done that proved that there was a fuel savings with the X-One single wide tire on Class 8 trucks. Luc M. Minguet, Executive Vice President of Michelin North America, explained how the biggest savings occurred; “the duals truckers have been using, XDAHT, were the least fuel efficient. The truckers got on average 5mpg with these tires. If they were replaced with the more fuel efficient XDAs, they received an increase in fuel efficiency of 5.25 mpg. If the duals were replaced with X-Ones, the mpg went up to 5.45 on the same vehicle.” CFI gets six mpg. They have studied their numbers in real-world exercises and know they will get an increase of 5/10 from duallies to X-Ones that brings their mileage to 6.30 mpg.
To a passenger car that goes about 15,000 miles a year an increase of .30 mpg is nothing. You could get that much of an increase by clearing the junk out of your trunk. But to a long-hauler every increase in mpg counts. On average, long-hauler drives 130,000 miles per year. At six mpg the long-hauler purchases 21,667 gallons of gas per year. By just switching to X-Ones there would be a savings of close to 1,032 gallons of gas a year. There are approximately 1,250,000 long-haulers on the road yearly, bringing the savings of fuel to 12,900,000 gallons of gas yearly if they changed their duallies to the X-One wide tire. The demand for diesel has risen, causing the price to average around $2.50 a gallon, saving truckers $32,250,000, a year.
There is also a savings in oil when making the X-One wide tire. The main ingredients in producing a tire are steel, natural and synthetic rubber and carbon black, aka oil products. It takes approximately seven gallons of oil to produce one dual truck tire. According to Michelin engineers, it takes 9.5 gallons of oil products to produce an X-One. On an 18-wheeler with dual tires (2 steer tires and 16 duals), that means 126 gallons of oil product used in the production of tires. Replacing the tractor and trailer duals to X-Ones would save 36 gallons of oil products in production. With 1,250,000 18-wheelers on the road, that would be a savings of 45,000,000 gallons of oil products.
There is another savings for the trucking industry that seems to have gone out of fashion in the passenger tires; retreading. Retreading saves time, energy, money and yes, more oil product. How? Each dual truck tire retreaded uses only 1.7 gallons of oil product and an X-One uses 2.8 gallons. According to Michelin, Penske has 206,000 trucks. They buy 600,000 new tires each year. They retread 300,000 per year. Presumably, those are duals. If Penske bought all their tires new it would take 6,300,000 million gallons of oil product to produce those tires. Instead, it takes 4,710,000 million gallons to produce and retread their tires. And that is only on 206,000 trucks.
There are downsides to the X-One wide tire. X-Ones lose about 10 percent in mileage. If the dual tires can last for two years, the X-Ones last only 1.85 years. That is no problem if the fleet tire manager is the same person as the fleet gas manager because they will see overall savings. The other problem will be if you have a blow-out. There is only one tire on each axle. You can limp along and have the X-One replaced with two duals if you need to. Currently, CFI does not carry X-One replacements with them, but Michelin says they can find X-Ones anywhere.
We left the CFI headquarters in Joplin, MO and stopped at the Flying J for snacks before we headed off to Springfield to catch our flight. Our cashier, Sharon, asked us where we were from and we explained. Better than any trucking expert had said it, she put it succinctly, “If you own it, it’s been in a truck.”