The stimulation of business growth and the promotion of trade-friendly policies are among interventions to boost the South African economy this year and reduce the unacceptably high levels of unemployment in the country, says Clinton Holcroft, CEO of leading South African truck and trailer body building company Serco.
Also necessary to get South Africa back on track after more than two years of Covid-19 turbulence is urgent action to reduce load shedding and improve performance levels at Government departments servicing the private sector, according to Holcroft.
“Licensing departments, for example, can take several weeks to issue a new Natis number for a slight variation in vehicle body size. The same is applicable where the tare weight is changed for a modified trailer. The delay results in costly down time for customers with little accountability or explanation from authorities.
“We have seen business sentiment improve since Covid restrictions were lifted, however, many of our customers in the transport industry are finding business tough because of the soaring cost of fuel and a high level of overcapacity in a relatively flat market,” he said.
“Our industry is still experiencing delays due to issues in the supply of parts and truck chassis. This has been exacerbated by problems and congestion at our ports.”
On a positive note, Holcroft said his company had seen a noticeable improvement in inquiries and order volumes for new vehicles and repairs in 2022 compared to the previous 12 months.
The economy, however, remains under pressure with KwaZulu-Natal still taking strain following the floods last year and the violent civil unrest in 2021, with a lot of infrastructure still not repaired.
“We anticipate the economy in 2023 will be similar to that of 2022, unless there is a significant reduction in load shedding, which is a major handbrake in so many respects.
“Added to that our road infrastructure is in serious need of repair with the poor conditions in many areas reducing safety and contributing to higher wear and tear costs for transporters as well as private motorists,” said Holcroft.
“Our goal as a business is to keep a tight rein on costs while focussing on how we can improve our client service.”
He said Serco had achieved its goal last year of getting back to pre-Covid trading levels and felt well set to face challenges and opportunities in 2023. The tough trading over the past few years had created gaps, allowing the business to grow its customer base and product range.
Many lessons had been learned during the tough trading conditions caused by the pandemic, and these would be acted upon this year. “New steel processing machinery we acquired has enabled us to take some cost out of our production and increase our ability to speed up delivery times which will put us in an advantageous position as business conditions improve,” said Holcroft.
“Our new smart trailer system which provides alerts for trailer axle overloading and proactively monitors service intervals is one of several innovations we have added to help transporters reduce running costs.
“Customers are looking for suppliers who can reliably meet delivery commitments and help unlock cost savings through innovation. Fortunately, the Serco brand is well recognised and associated with quality and innovation so we hope to leverage this as we broaden our product range with new options,” he said.
A highlight for Serco last year was getting the contract to build new vehicles for a large logistics company that had won the tender to handle the distribution in Gauteng for a local retailer. Deadlines were tight and the Serco team did well to manage all the challenges. The combination of superior panel technology and an ability to meet tight delivery deadlines, were key to securing the contract.
A further highlight was the investment in and commissioning of new high tech steel processing machinery as the company brought its steel processing in-house to better control its supply chain and delivery lead times.
“We enhanced our sustainable business practices by converting several diesel forklifts in our factories to gas and converting factory lighting to LED to reduce power consumption,” he said. “Plans are also in place to install solar power at the company’s factory in Johannesburg early this year as part of our ongoing sustainability drive.”
Serco is working on some exciting developments in its 2023 growth plan, including new light weight dry freight bodies for courier distribution. Using lightweight materials, the aim is to improve the payload currently available on smaller trucks in the one-to-five-ton range in an effort to reduce fuel consumption and increase loading volume.
“We hope to grow our business in 2023 and contribute towards more employment opportunities by filling the vacuum created with some manufacturers closing down over the past few years.
“We aim to take some of the latest exciting developments we have seen at international trade shows and introduce these to our customers where we believe it can reduce delivery and transport running costs. Our drive continues to be to deliver the lowest product life cycle costs in our industry through quality, durability, and innovation,” said Holcroft
“New innovations relating to driver safety are exciting, considering the high level of accidents involving trucks on our roads. Using technology to reduce accidents by proactively detecting driver fatigue is becoming a necessity. If we weigh up the cost of an accident, investing in the latest technology to prevent accidents is critical. Spending long hours on the road, drivers are prone to fatigue or getting distracted and this is exacerbated by the large number of heavy trucks on the road.”
Other exciting developments included the continued drive towards lower emission trucks and alternate energy vehicles.
“Upgrading to the newer model trucks will have positive spin offs for transporters and the environment as these vehicles are lighter on fuel and offer significant safety features. What is needed, however, is more collaboration between Government and the private sector to fast track the required infrastructure, so South Africa does not get left behind,” added Holcroft.