Motors are running but there's no rubber to burn!

Motors are running but there's no rubber to burn
By Nick Hanson
njhanson@stcloudtimes.com


Although most Central Minnesotans probably don't know it, there is a worldwide shortage of off-road tires.
The heavy-duty tires commonly known as OTRs are mostly used on construction vehicles.

A similar shortage isn't evident for tires on passenger vehicles, but local construction companies, tire suppliers and some other businesses are all feeling the impact.

If it continues, the shortage has potential to delay area construction projects and put a dent in profits for local construction businesses.

For Sauk Rapids-based concrete and asphalt construction company Bauerly Brothers, the situation already has started to take a toll.

"The prices for the tires have gone up considerably and they are hard to get," said Jake Bauerly, president of Bauerly Construction Companies. Bauerly Construction employs about 800 people and owns about 75 machines that use OTRs.

The severity of the situation is best described by a situation at Bauerly's earlier this year: An engine in one of Bauerly's loading vehicles failed.

But Bauerly workers mitigated the loss by salvaging the tires from the broken machine and transferring them to one that sat unused because of a lack of tires.

"We're functioning," Bauerly said of his company. "But it's a big pain."

What's happening


The shortage of OTRs is credited to a number of factors, said Mark Merchlewicz, marketing manager of Royal Tire in St. Cloud. There is unprecedented demand for OTRs in countries such as China, Russia and India, Merchlewicz said.

The spike is mainly a result of a worldwide increase in demand for minerals such as coal, iron ore, copper, nickel and bauxite. Mining them requires heavy construction machinery.

There is no matching increase in OTR manufacturing. The shortage is a classic case of supply and demand, Merchlewicz said.

"The tires are in high demand, yet the supplies are limited," he said. "An OTR tire could easily be (cost) $4,000 and could go way up from there."

In turn, construction companies are faced with two problems. They can't afford the higher cost of money needed for new OTR tires, and even if they could, many suppliers are out of stock.

So, how is a supplier like Royal Tire dealing with the problem?

"We have worked pretty diligently on creative ways to deal with our customers," Merchlewicz said.

Royal has focused its efforts on retreading old tires and developing new methods.

"We have a state-of-the-art facility for OTR retreading," he said. "We are able to cap some of those tires and we often have used tires available."

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Find OTR Tires here: http://www.otrtiredepot.com