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CPK (cost per kilometre) fleet metric
What it is
The metric fleets actually buy on - total tyre cost divided by kilometres delivered, rather than the purchase price of the tyre. It combines new tyre cost, retread cost, tyre life and downtime
Retreading costs 20-50% of a new tyre because the casing is reused, so a casing retreaded once or twice sharply lowers lifetime CPK
Impact on industries
- The entire commercial logic of the industry - a fleet manager comparing CPK will retread wherever casings permit, regardless of new tyre pricing
- Insulates demand from the economic cycle: when freight rates fall and fleets economise, retreading becomes more attractive rather than less
- Poor-quality retreading destroys the argument - a failure costs downtime, cargo delay and possible casing loss, which outweighs the saving
- CPK thinking favours organised retreaders who can evidence mileage performance, but most Indian capacity is small and unorganised with no such data