Truck and trailer building company Serco says it is fast-tracking the construction of vehicles, as well as repairs to vehicles, as it works to help the transport and food sectors return to normal in the wake of the recent unrest in KwaZulu-Natal and parts of Gauteng.
Serco CEO Clint Holcroft says these sectors “were hit hard” by the unrest, and that it is imperative to restore supply chains as quickly as possible.
He estimates that more than 100 trucks were destroyed and even more damaged during the rampage by looters, which also saw the torching of warehouses and cold-storage facilities.
Serco has branches in Durban, Johannesburg, Cape Town and Port Elizabeth.
"We have stepped up our production and repairs in the short term to accommodate the demand, but there are a variety of limiting factors involved – availability of truck chassis, as well as a four- to seven-week manufacturing lead time from [order confirmation],” says Holcroft.
While it is possible to hire vehicles while critical transport equipment is being replaced, this comes at a cost that will ultimately impact on transporters and the consumer, he adds.
“The replacement costs for new equipment are a significant cost to bear if not fully covered by the South Africa Special Risk Insurance Association (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 situation is exacerbated by uncertainty as to how long Sasria will take to settle claims, resulting in some retailers not being able to replace vehicles until they have confirmation of payment.
Holcroft says the South African economy had already been under “severe strain” prior to the violence, with the third wave of the Covid-19 pandemic taking its toll on business and industry.
“Delays in sourcing truck chassis earlier this year due to global shortages of semiconductor chips and certain electronic components have severely hampered any resurgence of growth in the truck body and trailer building sector, as well as the motor industry in general.
“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,” he notes.
However, there is some good news.
“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 the situation will improve as global economies reopen and local companies start rebuilding as the Sasria funds make their way to the businesses impacted by the recent unrest,” says Holcroft.
A major portion of Serco’s builds are for perishable food distributors, although the company has recently focused on growing the range of dry-freight options it offers, to better serve the transport market since the advent of the new normal caused by the Covid-19 pandemic, explains Holcroft.
The company has also recently introduced drop-side bodies, single-skin van bodies and curtain-sider truck bodies.
Sales in these areas continue to grow and will, to some extent, 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,” says Holcroft.
Serco specialises in the design and manufacturing of insulated and dry freight truck bodies and trailers.