TireHub LLC plans to open five distribution centers next year, Peter Gibbons, the company’s CEO, recently told MTD.
The company, which has 70 distribution centers nationwide, is making investments in its IT capabilities, as well, according to Gibbons, who also brought MTD up to speed on the impact of COVID-19 on the firm's operations.
“In March and April, things got very grim, very fast,” he says. “I spoke to many customers (who were) concerned about traffic and cash flow.”
As a result, TireHub reduced the frequency of some deliveries. “We were doing up to four times a day before COVID-19. We pulled that back to more like two or three.”
By the middle of April, he reports, “things started to turn around” and the company began to ramp up deliveries.
TireHub has kept all of its distribution centers open throughout the pandemic. “That was our intention,” says Gibbons. “We didn’t want this to force us to take service away from markets that were critical to us.” (The company relocated three distribution centers - two in Texas and one in California - this past year.)
Six months after COVID-19 hit the U.S., “we’ve seen steady improvement to the point where we are ahead of where we were last year. And that has been important for us.”
However, he says customers “are still concerned” about what the ongoing pandemic will bring. “They are seeing better business, but none of us knows what is going to happen next. We have a lot of flux in the economy, a lot of flux with COVID-19 and a lot of flux with politics,” due to the upcoming presidential election.
Supply and IT update
Tire supply remains a challenge, says Gibbons.
“But we all knew that would happen. It’s not a huge surprise when you close big tire plants,” referring to tiremakers’ decision to temporarily suspend production earlier in the year.
“And I’m not just talking about our shareholders. It takes time to get production rolling again.”
TireHub is moving forward with planned investments in IT capabilities and digital tools, like its soon-to-be-launched Quick Pay system, which will simplify and expedite customer transactions.
“Creating better tools to help dealers track their progress against programs (also) is important. We also have technology” that allows dealers to know when they will receive their orders.
Consumer buying trends
TireHub carries Goodyear and Bridgestone’s lineup of consumer tires and also stocks Toyo brand consumer tires. (The company is a joint venture between Goodyear Tire & Rubber Co. and Bridgestone Americas Inc.)
Gibbons says TireHub does not have plans to add new brands to its product screen. “We always look at other possibilities,” but the distributor has had “really good success” with its existing wares.
He adds that TireHub is seeing “good growth” in demand for its top-level Bridgestone and Goodyear brand products. “But there always will be customers who have to watch their budget and some will have to make slightly different decisions.
“There is always naturally a bit of remixing” during economic downturns. "But if you look at the performance of our top brands, we are very happy."
Looking ahead, he notes that “we’d like to do more and move even faster. We’re very happy with the progress we have made. But we know we have to win our customers’ business every day. Dealers have choices.”