How Brake Systems Affect Your Total Cost of Operations
Discussing important trends in heavy-duty truck brakes, including air disc brakes, legislation changes, part choices, and cost considerations.
Episode 290: This week features a powerful discussion with industry expert and heavy-duty aftermarket veteran, Don Orrell, the CEO of Torqstop (OPC Parts LLC.). We discuss all things brakes, shedding light on the latest trends that are shaping the world of class eight heavy-duty trucks.
We take a look into the rise of air disc brakes, their numerous advantages, and the impact of legislative changes on the industry. Plus, learn the differences between remanufactured parts and all-new parts, and how making smart choices when it comes to brakes can significantly reduce your total cost of operation.
Have you ever considered how different classes of friction materials can impact your bottom line? Don and Jamie dissect the distinctions between the good, better, and best friction materials and their implications on your TCO and CPM.
Finally, we explore the economic impact of OPC’s medium-duty line and the advantages it brings to last-mile delivery. We reveal how Orrell’s company works alongside distributors to curate a value proposition that lowers TCO. You’ll also get to hear the story of how Don’s products drastically improved one distributor’s economic situation.
Wrapping up, Don and Jamie discuss how “Core is a Four Letter Word” and the crucial considerations when it comes to pad and rotor wear. Tune in for this informative discussion that will help you better your fleet and boost your bottom line.
Links
Sponsors of this Episode
FinditParts: Are you looking to purchase heavy-duty parts and get your commercial vehicle repaired? Get access to the largest source for heavy-duty truck and trailer parts in the United States and Canada. Buy your parts from FinditParts.
Visit FinditParts.com/100days Use coupon code HDPR5 for 5 additional entries to win big.
SAMPA: Looking for suspension, steering, and 5th wheel parts? Buy now from SAMPA.com
Disclaimer: This content and description may contain affiliate links, which means that if you click on one of the product links, The Heavy Duty Parts Report may receive a commission.
Transcript of Episode
Jamie Irvine:
You are listening to The Heavy Duty Parts Report. I’m your host, Jamie Irvine, and this is the place where we have conversations that empower heavy-duty people. For any of you who have listened to the show any length of time, you know that I started my career in a remanufacturing facility and I really got my first taste of commercial truck parts for class eight relining brake shoes and learning about friction material and bringing friction material to the market that we were working in. So I was really excited to have the opportunity to talk to somebody who is doing what they can to innovate in this space of friction and brakes in class eight heavy-duty. And so that’s what we’re going to talk about today, and we’re going to get into a conversation about some of the trends in braking material. And also we’re going to talk about ways to lower total cost of operation for fleets and owner operators. So I’m really excited about today’s conversation. My guest today is Don Orell. He’s the CEO of OPC Parts. Don is a heavy-duty aftermarket veteran with over 40 years of experience. He’s worked for companies such as Bendix Centric parts and Performance Friction, and now he leads a startup focused on providing premium, medium and heavy-duty brake products to the heavy-duty independent and OES sales channels. Don, welcome to The Heavy Duty Parts Report. So glad to have you here.
Don Orell:
Thanks, very glad to be here.
Jamie Irvine:
So Don, I’ve been looking forward to today’s conversation. We are here to talk about brake and friction material. You’ve been in the business a long time, 40 years of experience. You’ve seen a lot of things. I’ve been in this business 25 plus years and as I said in my intro, I started off relining brake shoes and being involved on the brake side of things. So a lot has changed in the commercial trucking industry in that time. Maybe you could talk to us a little bit about what are the trends going on right now that if you’re a fleet or an owner operator, that you really need to be thinking about, especially in the context of how we want to help people to make the right kinds of decisions with brake and friction material and keep their total cost of operation down. So what are you seeing going on in trucking right now?
Don Orell:
Sure. Well first you said, I’ve been in the industry for 40 years. That’s frightening to hear it coming from somebody else. So back when I started, it wasn’t quite horse and buggy, but it was almost all drum brakes back then and even on passenger car. So it has come a long way, but more in context of our conversation today, the three things that immediately come to mind to me are we’ve seen exponential growth in the air disc versus the old traditional S-cam brakes. The difference in those two platforms brings a lot of implications, not just so much from the friction material itself, but just the service intervals and everything else. So that’s one definite thing we want to talk about. Another one is the actual friction material itself. Recent legislation that has on the 2025 or the copper free requirements has dramatically changed how we look at friction material. And then the third one, I guess, which is closest to our company, is the trend line of moving away from remanufactured parts and more to all new parts. And with that brings a lot of economic advantages of new versus reman and we’ll definitely want to drill down a little bit more into that throughout our discussion today.
Jamie Irvine:
Alright, well that’s a great place to start. So let’s talk about this move towards air disc brake. If you are in the position where you’re speccing equipment, what are the considerations that you should take when you are thinking, okay, I have to spec this vehicle. Should I go air disc brakes? Should I stay with the traditional s-cam? Walk me through the way you help customers make decisions.
Don Orell:
With respect to my position today, it’s pretty much what’s already there since I’m an aftermarket guy, so I want to be able to service both sides of the market. So I provide s-cam brake shoes, I provide air disc brake pads, but from the speccing side, so if I go back to my life when I was at tier one OM, which was Bendix, I was there when they were just introducing air brake to the North American air to market, and that was circa 2005-ish. And Bendix had just merged with Knorr Bremse and the North American truck VIO was virtually 100% drum brake with a few exceptions in transit because many of those were European platform. Conversely, Europe was virtually a hundred percent air disc already. So it was a matter of migrating that technology from Europe to the US and I was there for that. All credit in the world goes to my former colleagues and still longtime friends at Bendix. They did a phenomenal job at really bringing the whole market to accept air disc brakes. The advantages are plenty from everything from shorter stopping distances to much easier servicing and longer service intervals, lighter weight. It’s just like when you think about passenger car in the sixties and seventies when it went from drum brake to disc brake, all those same advantages that were prevalent then apply now to the class eight market. It just took a lot longer. When you look at the crystal ball of what’s coming next in the heavy-duty market, you only need to go and look at the passenger car market because they’re always 20 years ahead of us. So it’s actually very easy. Go back, see what passenger car is doing, and that’s where eventually we’re going to be in heavy-duty.
And so it’s a little easier for us because we already have a roadmap. Air disc has so many advantages in the decision-making process on how a fleet would spec air disc versus s-cam. Mostly it’s just a matter of force of habit. If you’ve got a kind an older school director of maintenance who just has had a good track record with a certain platform of drum brakes, there’s a good chance you just might say, if it ain’t broke, don’t fix it. But more and more folks are recognizing the fact that air disc really is from a technology and from a performance standpoint, it’s just vastly superior.
Jamie Irvine:
Right, right. You mentioned the changes in friction material because of regulations and when I was selling parts, one of the things that always was a challenge was to remind people not just to look at the purchase price, right, to look at the quality of the friction material that they’re purchasing, to look at the performance characteristics and to make good decisions about matching the right friction material to the right application based on the vocation that they’re in. As the game changes and friction material, the composition of it is forced to change. What are the considerations that people need to think about now that we see this mandate with the copper free and the obvious implications that has on the formulas that are used to make this friction material?
Don Orell:
So copper free created a couple of challenges. The main reason for copper and friction was not so much for conductivity, but actually was lubrication and noise suppression. So when you don’t think typically you don’t think lubrication and friction materials, but that really is one of the primary purposes of having copper in a pad. And again, to make it quiet. So one of the biggest challenges when you remove copper, and it really was a bigger challenge, I would say, for the passenger car market than the commercial vehicle because passenger car used a lot of ceramic, and believe it or not, ceramic had far more copper in it than traditional semi metallic friction materials. In fact, your traditional semi met doesn’t even have very much copper in at all. So it didn’t necessitate significant changes. Many were already end leaf or 2025 compliant without having to manipulate the friction formulation at all.
But then other NAO type materials, which is not asbestos, organic, other materials that did use more copper in it, those were the ones that were impacted. So at the end of the day, we had to find different materials that would substitute and displace that copper element. I think by and large, most of the friction manufacturers have figured it out. But when we were doing some testing on our pads versus some competitors, I was surprised that one of those competitors who I’ll not name and who I also have a lot of respect for performed very poorly. When I spoke to an industry colleague who works for that company, they were like, yeah, I think we pulled the trigger because we so badly wanted to be able to say we were copper free. And they kind of jumped the gun before they were really ready. Whereas when we tested these materials in some areas they were the best. In other areas, they were the worst. But one important thing is that they weren’t even 121 compliant on one criteria. So I was like, whoa, you see him kicking his feet a little bit? He’s like, yeah, we’re working on that. And I’m sure knowing that company that they have addressed it and fixed it. But it’s just a good example of how companies are still trying to figure how to manage meeting all these new regulations, ie. the copper compliance.
Jamie Irvine:
And that’s where the added complexity comes in for the buyer. Because I was going to say, most companies meet the 121 standard, they have to, but then really at the end of the day, it comes to how fast that friction material is going to wear out, and that’s where the cost either goes up or goes down based on the wear characteristics of the particular formula. So Don, for some of those that maybe aren’t as familiar with the copper free requirements, especially as it relates just to heavy-duty, can you give us a little bit of a description as to where did this mandate come from? Why are they putting it in place and what are they hoping to accomplish?
Don Orell:
Great question. Essentially this started with the state of Washington and the state of California. In the mid two thousands, the state of Washington determined that copper in brake dust was entering the aquifers and causing environmental harm, particularly as it applies to the salmon fishery and that it was creating issues with the reproductive efficiency of salmon. With that, the state of Washington adopted a set of criteria and a schedule to reduce the content of copper within brake pads over a period of time. So they actually developed a logo that has three leaves on it, and depending upon how many leaves are colored in one leaf, two leaf or three leaves would give you a quick visual indicator of what the copper content is of a given brake pad. So with one leaf colored and it has the letter A, that is basically, it could be anything.
It could have more than 5% copper, and there are other heavy metals that are included in that, but copper’s the main one. So you can have north of 5% copper when it has one leaf colored with the letter A. That was good all the way through 2021. At the end of ’21, it could no longer be an A pad, it had to be under 5%, and then you could have a B. So once it was two leaves colored with the letter B, it had to be below 5% copper, but it was allowed to have more than one half of percent copper. So it was in that range sub five, but more than 0.5. And that went on or is currently in effect now and not until 2025 does it require it to be sub 0.5% copper. And then you have the N, which is all three leaves colored in less than one half of 1% copper. It’s technically only been adopted by the state of Washington and California, but as many of these legislations go, it really applies nationally actually, US, Canada, Mexico. So it’s recognized across all 50 states.
Jamie Irvine:
And so from your perspective, now that we are moving towards the standard, you’ve kind of mentioned that things have started to level out? But specifically for our listeners, when they’re trying to make decisions on friction material, how do you walk them through a decision on what friction material to use?
Don Orell:
I’ll start with s-cam because for me it’s actually the easier, back in the day, boy, there were, and there probably still are dozens if not hundreds of different brake blocks out there. There’s those that are loyal to an Apex or to a Carlisle or to any number Meritor a lot of really good companies with really great formulations, but it still falls into one of those product categories where there’s still a lot of loyalty and stickiness, if you will, to the brand, which has largely gone away in the aftermarket, which I kind of lament that fact. It used to be a brand meant a lot more than it does now, but certain categories like friction material and probably filters, and there’s a few others out there where there’s still, I think a little more brand loyalty in the marketplace. So to answer your question on friction, years ago, even not that long ago, five or even 10 years ago, you would have a fleet and it’s like, I’m only going to use Meritor MA 312, or I’m only going to use Carlisle EEC 23 or whatever it may be. Nowadays, there just seems to be a little bit broader acceptance. I’ll just take your standard 23 K lining and I’m good to go. Whether that’s an aftermarket brand or whether it be a tier one OE brand, there seems to be a little bit less requirement to adhere to one very specific friction as long as it kind of fits in that general broad ranging category.
Jamie Irvine:
Therein lies the issue though, isn’t it? It’s like, okay, I’ll take a 23,000 pound lining. One of them wears out in six months, one of them needs to be changed in 18 months. All of a sudden that has a massive implication on your total cost of operation and your cost per mile.
Don Orell:
Absolutely. And that’s where the easiest way to tell either it’s through your experience or price still is a good barometer because typically the ingredients or the compounds that need to go into a formulation that would improve wear are going to cost a little bit more. So it’s relatively easy to tell what you’ve got, but most of the guys out there that are servicing these vehicles are savvy. They understand what friction materials they need and they’re going to stick with it. One of my challenges is to say, okay, I’m the new guy on the block, and one of the things that very harsh but realization that I had to accept going into this is that the market is already being served. I’m bringing a portfolio of products that if I was to walk into a distributor, they’ve already got all those categories satisfied. So I have to bring some compelling reasons as to why I’m going to earn their business either as to displace a competitor or to be an addition to their current portfolio that would be economically advantageous to them. What am I going to bring to the party? So there’s a lot of different ways that we can approach that or we do approach that, and I’ll get into that in a minute. But to answer your question specifically on how to select the right friction material with s-cam, there used to be dozens if not hundreds of different materials out there, A lot of ’em based on price, whether it’s a 20K, a 23K, severe duty on highway, whatever. There seems to be a lot of specific requirements that each fleet has nowadays. It seems to be more homogenized to 23K standard, 23K premium, severe duty and so forth. So it’s kind of been consolidated down to groups, if you will.
Jamie Irvine:
Good, better, best, right.
Don Orell:
Yeah, good, better, best, precisely. And then from there, I think one of the things that we’re trying to get folks to understand is that even a moderate quality brake block, let’s just say your 23K standard is going to outlast and outperform a premium block if you mount it on a new shoe. So you’ve got a mid-grade 23K lining on brand new steel, all the tolerances are correct, and then you put that premium block on a reline shoe that might’ve been realigned more than once. But even so they’ve been stressed. Even if they were recoined, that steel has memory. So after the first heat cycle, it’s going to kind of spring back to whatever shape it was in prior to being coined. And some of the holes are elongated. Maybe the journals where the cam rides are not quite true. So there’s a lot of different small variables that could come into play that will all contribute to increased wear, even if it’s a premium friction.
Whereas you take a good solid mid-grade friction, you put it on a brand new steel, especially heavy-duty steel where you’ve got a nice good square rigid shoe, it’s actually going to last you a lot longer. So when you’re looking for that cost per mile, one of the things I deal with every single day is, well news more expensive than reman, and it’s all about price. And particularly with the trailer guys, they want a cheap shoe. Well, yeah, I understand that. But then A, you’re talking service intervals and then B, on those cores that you send back you you’re going to take at least a 10% ding on that core because you’re never going to get a hundred percent core credit. A lot of those things are not ever taken into consideration when you’re evaluating your cost per mile on a shoe with regards to air disc friction. So the core is not an issue. New versus reman isn’t an issue, at least not on the friction. And then that’s been kind of divvied up into whether it be two or three different weight classes. So some companies will have three, like a 23K at 25 or 26K, and then a 28 or 29 K. Our approach is to go your standard 23 and then your severe 29 3 different increments just starts to get really confusing. Most, I’d say 80 plus percent on highway light vocational do very well with a 23K friction material. And then your refuse, your concrete haulers, your transit, those that have a lot of start, stop, high duty cycle, a lot of weight, those do much better with the higher weight rated pads. But that seems to be a little bit easier to figure out. It’s not quite as complex nowadays. You don’t see all these different friction codes out there from all these different companies is like you mentioned earlier, a good, better, best, or just a better and a best type approach to it.
Jamie Irvine:
We’re going to take a quick break. We’ll be right back. This episode of The Heavy Duty Parts Report is brought to you by Find It Parts your ultimate destination for heavy-duty truck and trailer parts. Discover a vast range of parts at finditparts.com. Don’t spend hours a day looking for parts instead, visit finditparts.com and get them right away. Parts availability and quality have a big influence on fleets and owner operators’ total cost of operation, if they can’t find a part, it means more downtime. If they install a low quality part and it fails, it means even more costs like tow bills, hotels, meals for the driver, and lost revenue. That’s why we recommend Sampa. They manufacture a wide range of advanced parts for commercial vehicles. Their website has an intelligent product search engine and broad coverage of suspension, steering and fifth wheel components. Expect more. Expect Sampa. Visit sampa.com today. We’re back from our break. Before the break Don, you did a good job of explaining to us that in many ways, not much has changed in the whole friction brake world. Yes, there’s different platforms, but there’s still the constant challenge to help end user customers, fleets and owner operators make good quality decisions and match the right friction material to the right application. Not just look at purchase price of the friction material in the brakes, but also look at the total cost of operation. That’s an ongoing challenge and cost per mile is what it’s all about. So we’ve got to continue to help our customers to make those good quality decisions. So let’s talk a little bit about your company. So where does OPC really focus its attention? Where are you guys really, really doing a good job for your customers?
Don Orell:
So we basically divide our portfolio into two pieces. We’ve got our heavy-duty air brake program, which is air disc, the entire wheel and package, which is your pads, rotors, calipers, and chambers, and then the s-cam, which are stop boxes, which two shoes and a hardware kit and individual hardware kits for those that buy shoes in bulk and then also the chambers that go along with it, the service and spring brakes. We’re not focusing on a huge broad offering. We want to focus on what we know, what we’re good at, and bring maximum value to a relatively narrow portfolio to what we know what we’re doing. On the medium duty side, it’s a little bit broader because it’s the entire brake system offering. So that would also include your pads or shoes, drums or rotors, all your ancillary hydraulics, whether it be master cylinders or wheel cylinders or calipers. Also brake hoses, sensors. Now that years ago there was no such thing as sensors and sensor wires and all that stuff, but that’s an important component on a lot of the newer applications. So we have to make sure that we can provide that so that you do the brake job properly. So we have a complete portfolio of those products on medium duty. The other quandary and medium duty is where does the line get drawn? What’s late duty? What’s medium duty? What’s commercial vehicle, what’s not? I took the dumb down approach from F150 on up, never fails. You walk into a fleet, I have a medium duty program, it starts at F450 and the guy points at a bunch of 250 and 350 super duties, and you’re like, oh boy. So we just decided let’s cover the whole thing. Makes it easy.
And that way, particularly for a heavy duty distributor who may not have access to a passenger car brake program, it enables them to go into some of those lighter platforms that they otherwise might not have access to from what some of the other heavy-duty guys who dabble in medium duty do. So I think we have a much more comprehensive offering there, particularly as it comes to last mile delivery. That’s a huge and growing market. Your pro masters, your sprinters, your transits, we do an excellent job of covering that all the way through the most current applications.
Jamie Irvine:
So let’s talk a little bit about at the outset of the interview, we mentioned that you sell through distribution. So when you’re working with your distributors or the dealers that are buying your product and you’re out in the field, what’s kind of like an ideal customer profile that you’re looking to work with? Who can you help the best?
Don Orell:
Well, we really focus on the independent aftermarket and the OES channel. Because we’re a relatively small new company, dealing or providing programs to the big PDC programs through the OE’s is really not a practical approach, but we do a very good job with the independent aftermarket and help them go out there and meet the fleet where they live and provide cost-effective solutions to what they’re doing today.
Jamie Irvine:
So when you sit down with one of your distributors customers and you’re trying to work with that distributor and help them establish a value proposition and say, look, if you switch to this brand of breaks, we’re going to improve the situation for you. I always like to talk about things in terms of economic impact. So how are you able to position yourself to actually help that fleet improve their economic situation, lower their total cost of operation? What’s your approach and kind of walk us through how you do that.
Don Orell:
Sure. So first off is there’s price. And so I don’t like to lead with price, but at the end of the day, people say, I don’t buy on price, I buy on quality. And then the first thing they ask is how much does it cost? So when I use the term value, value is essentially a ratio, a ratio of quality versus price. So the more quality and the less price you have, the higher your value coefficient is, if you will. So actually, I have a graph which shows where we stand on the scale of price versus quality, and I rate OPC or torque stop products on a scale of one to 10. I rate them at a nine. Now that seems pretty lofty, but I would challenge anybody to put our parts both from a aesthetic and from a performance standpoint up against even the OEMs, and I challenge them to match the quality that we can provide and that’s one of the reasons why I’m here talking to you today because the quality is just so good. And then the other part is price. So we understand that as a new entrant to the market, we need to be aggressive with our pricing, but we’re also able to do that because our company is very vertically integrated. My business partners both own factories where we produce friction and then have close relationships with the other owners of the other components, ie. rotors, calipers and so forth, such that we have advantageous purchasing power. So even as a new little company, we actually have supply chain positions that would be the envy of much larger companies. So that affords us the opportunity to provide a very aggressively priced product along with the quality that could also challenge that of the big guys.
Jamie Irvine:
So Don, I really appreciate the way that you have confidently said how you would rate your product line up against competitors. I think that’s important. You got to believe in what you sell, but there’s nothing like a real story of how you’ve helped a real customer to kind of back up the assertion that you have high quality products at competitive prices. So Don, first of all, tell me a story of how you specifically helped the distributor to improve their economic situation selling your products. I’d love to hear that first and then we’ll talk about how you’re helping fleets.
Don Orell:
A great example would be actually I have multiple distributors with regards to our caliper program. So a reman caliper, as you know, air disc calipers are not inexpensive by any stretch. I’m just going to throw some general numbers out there to illustrate this example. But in general, marketplace price on a reman caliper is ballpark $400 net. That can be higher or lower, but in general, that’s about where they’re at these days. However, along with that comes the proverbial core charge, and that can range anywhere from $250 to $500 depending upon the company. And so one of the things that we feel strongly about is that not only do we not want to handle cores, but we’re never going to charge for a core. So even though all of our products are already 100% new, however, are companies out there that still want to charge a core for their new part.
So there’s a reason for that, but we just don’t do that. So this distributor who they had a full line of remanufactured calipers and I explained how, okay, for just 10% more, you’re going to be able to put a brand new caliper on your shelf, but you don’t have all that cash tied up in that core because that core, you really never get it back. In the example of a $400 caliber with a $300 core, you’re putting $700 on the shelf, when you sell that and you recover the core, okay, so then now you’re down to $400 net. That’s all great, but then when you have to replenish your inventory, you got to put that $700 back out again. So you never get that $300 back. It’s always sitting on your shelf, which is a huge ding to your cashflow. Well, in our example, you don’t have that. You just put the part on the shelf when you sell it. You don’t owe anybody a core, but wait a minute, you’re going to generate a core as a result of that sale. More often than not, there’s going to be no obligation. It’s just a force of habit. The guy’s going to give you the core back. So now you’ve acquired a core with no obligation, no strings attached. Now you have an opportunity to sell that on the open market, whether it be to satisfy another core obligation you have elsewhere, or it’s just sell it to a broker or wherever else. And then that has significant cash value that only further reduces your acquisition cost or improves your margin, however you want to account for it. But it really makes the overall economic feasibility or the economic advantage of going new versus reman very, very significant.
Jamie Irvine:
Don, I’m starting to get the feeling that you’ve got some pretty strong feelings about cores and core charges. Tell me a little bit more about why as a company you’ve made this such a focus.
Don Orell:
Great question and thank you for asking. I can go back to my experience working for my former employers where we had a lot of remanufactured product, and along with that came with these core aging reports. And I still think I have PTSD from looking at some of these long printed green printouts of core aging reports that I would have to sit down in front of a distributor and explain to him why he owed how many thousands of dollars because his core eligibility expired. And I really felt genuinely bad for this distributor who is screaming and pounding his fist on the desk that he now has to literally stroke a check for tens of thousands of dollars because some artificial timeline expired. And I just never wanted to put my customer in that position ever again, nor did I want to make him have to pay for those cores upfront. So one of the founding principles of OPC parts and core stop is to never have to deal with the core. Plus from a core management standpoint and logistics, they, they’re just an enormous pain. So I have yet to find anybody who says they like cores. I talk about it on every call I make, and it’s unanimous that everybody thinks that core is a four letter word. And so with that, we recently applied for a trademark for that slogan, and core is a four letter word, and you’ll see that on a lot of our forthcoming marketing materials, t-shirts, coffee mugs, and it truly is what we believe in, and it just makes it a lot easier to do business. And again, it saves money, it saves handling, it saves labor, and it just makes overall doing business with these types of products that traditionally involve stacks of dirty cores. I’m sure anybody who sells a lot of brake shoes would love to not have to sort cores or stack ’em on pallets a certain way and all that other stuff. Just throw in the dumpster, get scraped, you’re off to the races. And so we’re just helping distributors and fleets simplify their businesses and improve their margins without having to deal with course.
Jamie Irvine:
I hear what you’re saying and I understand it intellectually, but it still hurts my heart a little bit. I started off in remanufacturing and I’m envisioning Don having you and another guest who does remanufacturing on to kind of duke it out and weigh the pros and cons. So maybe that’s something that we could do in the future.
Don Orell:
Tell you what, we’ll set up a program. Many of my customers with excess cores that come from buying my new parts, we can send them to him.
Jamie Irvine:
There you go. So then you guys could fight it out and be friends at the end.
Don Orell:
It’s a win-win. We call ’em frenemies, right?
Jamie Irvine:
That’s right. That’s right.
Don Orell:
Or co-petitors. So yeah, there’s always a way. In fact, we actually have some of those arrangements with rebuilds where we facilitate liquidating that core for our, so there’s things we can do to make that a win-win situation.
Jamie Irvine:
We don’t want those cores in the landfill. So that sounds good to me.
Don Orell:
That is true.
Jamie Irvine:
And certainly cashflow is an important part of managing any business at all, right? If you can do something to manage your cashflow better, it makes you more competitive in the marketplace, and you don’t just have to go and be in that race to the bottom on price to try to be competitive. So that’s a fantastic story. So now when you’re working with your distributors and you’re helping fleets, tell us a story about how you then actually help one of your distributors to improve the situation for the fleet that they’re serving.
Don Orell:
Just to carry the caliper example all the way through. So a month later after you’ve sent your caliber back and then the manufacturer says, oh, this is a one part damage. So instead of giving you $250 credit, we’re only going to give you a hundred dollars credit. If you have to go back and chase that back from your customer, that’s not going to go over very well. So either you create an issue with your customer or you end up eating it. So either way, it’s a lose lose situation for the distributor. Often he’s the guy gets stuck in the middle. So we really don’t want to put distributors in that position in the first place. But then as far as the advantage to the fleet, I’ll shift over to an example with regards to our air disc pads. Again, I mentioned our quality ratio versus OEM.
I always reserve that 10 for the OEM, just out of respect, because they’re the OEM. I will qualify that, in many cases, I would argue that our pad is even superior to the OE pad. With all that being said, our price point is so much significantly better, and our formulation is a long wear pad. So there are multiple cases. In fact, I just completed a test with a large dump truck fleet who’s using our 29K pad, and they observed somewhere between 25 and 33% improved wear on this test. For our pad that is 40%, that’s 40% less in cost to them without having my calculator out. And how you extrapolate that in cost savings, it is very significant and they’re very happy with us, and they’ve now exclusively moved over to our pad because it checks off all the boxes. You’ve got improved performance at a lower price. Who can argue with that? Everybody wants that, and we’re getting more and more of that.
Jamie Irvine:
Yeah, and I mean 40% of the purchase price, that right off the bat is very easy to calculate how much it’s saving. But then you start to add up that 25 to 33% wear characteristic. And where that really starts to stack is on the outside end of the service interval. And after two or three service intervals, you now are basically eliminating an entire brake job every three or four service intervals that you just don’t have to do because it’s lasting so much longer. So when you start to add up your labor, your shop time, your downtime, the revenue, when your vehicle truck is down or trailer is down, all of a sudden this becomes, usually that’s an exponentially larger number than what you even saved on the purchase price.
Don Orell:
Indeed, and I’ll stack on a little bit more our friction formulation. It’s an NAO/ low met, so I wouldn’t call it as aggressive as a semi met, but it’s not a pure organic either. It’s extremely rotor friendly. So the other half of the equation, when you’re looking at pad wear, you’ve also got to consider rotor wear because a lot of times you have a very robust pad. It’s very hard for lack of a more complex term, and it will wear forever, but at the cost of your rotor. So you’ve got to strike that balance to make sure that, because quite frankly, I’d rather change pads more frequently than rotors because those are inboard matter rotors. You got to pull the hub off. It’s a huge pain in the, you know what? So that’s something that has to be measured along when you’re analyzing the overall cost per mile and the performance and the efficiency rotor wear is definitely something that needs to be taken under consideration.
Jamie Irvine:
You’ve been listening to The Heavy Duty Parts Report. I’m your host, Jamie Irvine, and we’ve been speaking with Don Orell, the CEO of OPC Parts. If you want to learn more about OPC parts, visit opcparts.com. Don, thank you so much for being on The Heavy Duty Parts Report. I really enjoyed our conversation today.
Don Orell:
Great. Thank you for having me.
