Mid-Year Report: CMA/Double Coin eyes growth despite freight issues

While most tire distributors have been struggling with shortages, China Manufacturers Alliance L.L.C. (CMA) has kept pace with demand, according to Tim Phillips, vice president of marketing and operations for Double Coin/CMA, the U.S. subsidiary of China's Double Coin Holdings.

The difficulties, Phillips said, are caused by "ocean vessel and equipment limitations." Despite that, he told Tire Business that sales remained high through the first five months of the year.

How would you describe business thus far in 2021?

I am optimistic. CMA/Double Coin's business never slowed in 2020 and sales have remained unusually high during the first five months of 2021.

What would you like your customers to know about how Double Coin has tackled the challenges brought on by the pandemic?

The trucking industry has played a pivotal role during the pandemic, and CMA/Double Coin stepped up our production and kept our distribution warehouses and customer service department open in support of the country. This meant changing our normal business practices to ensure a safe work environment as required by the CDC and local government authorities.

Your company expanded its sales force in the North America in April. How do you plan to grow in North America?

At CMA/Double Coin, we always strive to live up ME, Mission Excellence. We believe expanding our field sales force with knowledgeable and experienced personnel will allow us to stay in front of the customers and provide them with solutions to any questions they may have. By treating our customers as family, we will naturally grow our business together.

Do you expect supply difficulties in the second half?

Supply issues for CMA/Double Coin is not a result of manufacturing shortfalls; it is really a result of ocean vessel and equipment limitations. It is our expectations these challenges will continue for the foreseeable future.

How have ocean freighter issues impacted business?

Nothing is normal when it comes to freight these days. Ocean freighters are often lined up at sea waiting for port appointments to unload and available rail to move freight inland also continues to suffer from no availability. All major carriers are not optimistic about seeing an end to this situation anytime soon.

What sort of premiums are you paying to get vessel and container space?

Freight rates fluctuate each week. 2021 ocean rates on the open market are three to four times higher than mid-May 2020.

What are some of the pleasant surprises you are seeing?

The pandemic has improved brand loyalty for Double Coin tires. While some competitors are experiencing severe shortages, CMA/Double Coin has continued to keep up the pace. I believe customers are closely looking at their product portfolio and have come to the conclusion that they must align their business with CMA/Double Coin since we can provide production availability, long-term performance and a lower cost of ownership.

What segments have rebounded faster than you may have forecasted?

The original equipment market demand for Double Coin tires has outpaced expectations.

CMA recently opened a warehouse in Pasadena, Texas. How does it benefit the North American market?

Our Texas warehouse location is fully operational and has proven to be a great addition to CMA's warehouse network. We have recently consolidated some of our smaller facilities and now operate distribution sites in California, Texas and Tennessee. I am continuing to look at new opportunities that will help us offer better service in other parts of the country.

Do you expect to roll out any additional products in 2021?

We have several TBR projects that include steer, drive and trailer applications. We are also looking to enhance our OTR offering in 2021.

What has been the overriding factor in industrywide price increases?

Raw rubber rates in April showed a slight decrease. The change was -9.1 percent from April compared to March, but overall, it is up 61.4 percent from one year ago. The major contributors were increases caused by ocean and over-the-highway transportation increases as previously noted.

What did the company learn about itself in the last year?

Having open and consistent communications with customers is essential. I believe our customers are more focused than ever before on developing a dependable supply line with a quality company like CMA/Double Coin.