TRUCK and trailer building company Serco is fast tracking the construction of vehicles and repairs in an effort to help the transport and food sectors return to some form of normality in the wake of the recent burning and looting in KwaZulu-Natal.
Serco CEO Clint Holcroft said it was clear this sector was hit hard by the unrest and that it was imperative to restore supply chains as quickly as possible.
Holcroft estimated that more than 100 trucks had been destroyed and even more had been damaged during the rampage by looters in the greater Durban area and parts of Gauteng, which also saw warehouses and cold storage facilities torched by arsonists.
Serco is one of South Africa’s leading trailer and truck body builders with branches in Durban, Johannesburg, Cape Town and Port Elizabeth. A major portion of its builds are for perishable food distributers, although recently they have focused on growing its range of dry freight options in line with “new normal” market conditions caused by COVID-19.
“We have stepped up our production and repairs in the short term to accommodate the demand, but there is a variety of limiting factors involved – availability of truck chassis, as well as a four-to-seven-week manufacturing lead time from confirmed order,” said Holcroft.
He added that rental vehicles can be hired in while critical transport equipment is replaced, but this comes at a cost which will ultimately impact transporters and the consumer.
The replacement costs for new equipment are a significant cost to bear if not fully covered by state owned insurer, SASRIA, with a truck and refrigerated semi-trailer costing around R3,2 million and a smaller truck and refrigerated body costing around R1.4 million.
“The current situation is further exacerbated by uncertainty as to how long SASRIA will take to settle claims, resulting in some retailers not being able to reopen or replace vehicles until confirmation is received.”
Holcroft said the economy had been under severe strain prior to the violence, with the third wave of the pandemic taking its toll on business and industry. Delays in sourcing truck chassis earlier this year due to global shortages of semi-conductor chips and certain electronic components had severely hampered any resurgence of growth in the truck body and trailer building sector as well as the motor industry generally.
“Exorbitant increases in shipping costs and steel prices which have gone up as much as 65% since this time last year have only served to dampen an already battered manufacturing sector.
“There is a lot of turbulence in the market at the moment but with the COVID vaccine roll out gaining traction, it is anticipated that business will improve as global economies start reopening, and locally businesses start rebuilding as the SASRIA funds make their way to the businesses impacted by the recent unrest.”
He said Serco had recently broadened its product range and introduced drop side bodies, single skin van bodies and curtain-sider truck bodies. Sales in that area continue to grow and to some extent will plug the gap left by the drop in orders for refrigerated vehicles.
“With the shortage of trucks and imported components starting to improve, we hope to enter the second half of the year on a more positive note,” said Holcroft.