5 Ways to Reduce Costs of Your Tire Logistics

If you’re responsible for managing tire logistics, you know how quickly inefficiencies can eat into your margins. Between warehousing, transportation, and scheduling, the logistics behind tire distribution are complex—and expensive when not optimized.

The good news is that proven cost-saving models from the automotive sector translate well to tire logistics. This article walks through practical steps you can take now to bring your logistics costs down without compromising service levels.

1. Implement Just-in-Time (JIT) Inventory

Synchronizing deliveries with production or distribution schedules reduces unnecessary storage and keeps your cash flow tighter. Just-in-Time (JIT) inventory systems are already standard in automotive manufacturing, and they work just as well in tire logistics. With JIT, you don’t need to carry large volumes of tires in your warehouse, freeing up space and cutting holding costs by 15–25%.

To implement JIT in tire logistics:

• Analyze historical order volumes and lead times to build accurate demand forecasts.
• Coordinate with suppliers to establish consistent and reliable delivery windows.
• Set up automated alerts to monitor inventory levels against forecasted usage.
• Use a warehouse management system that supports dynamic receiving and real-time tracking.
• Start with a pilot location or product line and expand once the model is stable.

2. Use Milk-Run Collection

Combining supplier pickups into a single, consolidated route can reduce your transportation costs by 8–12%. Milk-run logistics minimize half-empty trucks, backtracking, and unpredictable delays. If you source tires from multiple manufacturers or regional warehouses, this model gives you a direct way to tighten up your transportation operations.

To set up a milk-run strategy:

• Map out all supplier locations and identify route clusters with overlapping geography.
• Work with a carrier or 3PL to design consistent pickup schedules across all suppliers.
• Standardize packaging and loading to simplify handling across multiple stops.
• Monitor route efficiency and adjust for supplier performance or delivery changes.
• Track cost-per-pickup metrics to confirm savings against standard freight methods.

Link to PIV Milk Run Case Study

3. Do Cross-Docking

Moving incoming shipments directly from receiving to outbound transport eliminates unnecessary storage time and labour. Cross-docking minimizes handling and reduces warehouse costs by 20–30%. For tire logistics, this means unloading tires from a manufacturer’s truck and loading them straight onto a trailer bound for your stores, service centres, or distribution partners.

To enable cross-docking in your operation:

• Reconfigure your dock space to allow for simultaneous inbound and outbound staging.
• Use barcode scanning to match inbound shipments with outbound orders in real time.
• Pre-plan outbound routes based on supplier delivery schedules.
• Assign staff specifically trained in cross-dock handling to avoid errors and delays.
• Integrate transportation and warehouse systems to streamline coordination.

4. Leverage Drop Trailer Programs

Placing trailers at key supplier or distribution points and allowing them to be loaded and unloaded on flexible schedules can cut your transportation costs by 30–40%. In the tire sector, where product is bulky and relatively uniform, drop trailer programs make your supply chain more responsive and predictable. This method works best for OE car plants.

To launch a drop trailer program:

• Identify suppliers or sites with consistent, high-volume loads.
• Work with a transportation partner to assign trailers that can be stationed for extended periods.
• Align trailer swap schedules with your linehaul availability.
• Develop a communication system for load-ready notifications.
• Measure time saved on live loads and quantify the impact on overall delivery times.

5. Hire a 3PL

Third-party logistics providers (3PLs) bring operational scale, freight buying power, and deep industry experience that most in-house teams can’t match. If your logistics network has grown too complex to manage effectively—or you’re spending too much time troubleshooting deliveries—a qualified 3PL can step in and reduce both cost and risk.

A 3PL can take over transportation planning, route optimization, cross-docking coordination, and milk-run scheduling. The best ones will also help you implement JIT inventory and drop trailer programs, ensuring everything works as a unified system. Many 3PLs also provide technology platforms for tracking, reporting, and inventory visibility, giving you better control without more hands-on work.

To choose and onboard a 3PL effectively:

• Define your core logistics challenges and prioritize where support is most needed.
• Compare 3PLs based on tire logistics experience, technology, and regional coverage.
• Ask for case studies or references from similar industries or distribution models.
• Pilot one part of your operation—such as a milk-run or cross-border lane—before scaling.
• Establish clear KPIs and communication expectations from the start.

For example, Ford cut $40 million in annual costs by implementing milk-run logistics in its European operations. That kind of expertise can make a difference even for smaller companies. You don’t need to hand over your entire operation—start with one region, route, or distribution node, and scale up as results come in.

Read Our Guide: How to Pick a Great 3PL for Your Business

PiVAL Specializes in Tire Logistics

PiVAL has built deep expertise in tire logistics by working with major manufacturers, regional distributors, and high-volume retailers. Our team understands the unique handling, inventory, and transportation challenges involved in moving tires efficiently through the supply chain.

We’ve applied advanced logistics strategies—like milk-run collection, drop trailer deployment, and cross-docking—to help clients reduce costs and increase delivery speed.

Whether you need full truckload solutions across Canada and the U.S., or regional just-in-time replenishment to service centres, we’ll build a logistics model that fits.

If you’re looking to reduce costs and tighten up your tire logistics operation, contact PiVAL today for a consultation.

Our warehouses are located in:

• Montreal
• Toronto
• Guelph
• Vancouver

Contact Us Today for Your Tire Logistics