Business bounce-back on the cards for Serco in 2021

Business at leading South African truck and trailer building company Serco recovered strongly in the last quarter of 2020, with prospects for 2021 looking promising. This takes some of the sting out of the reality of sales being nearly 25% down in 2020 (versus 2019).

CEO Clinton Holcroft says that what is highly significant, in his view, is that the company did not have to retrench any employees, in spite of the extremely difficult trading conditions caused by Covid-19.

“I extend my special thanks and appreciation to all Serco staff for the extra effort they put in to ensure our wheels kept turning, even during the darkest days,” he says.

The pandemic accelerated Serco’s efforts to grow the dry freight section of its business with the introduction of new cargo van bodies, curtain siders and drop side vehicles, to complement the refrigerated trailers and bodies for which it is known.

“Another positive – and there are several – is that despite the pandemic, which added extra pressure on South Africa’s already weak economy, Serco saw trailer and truck body orders pick up strongly in the latter part of 2020, which bodes well for a rebound in 2021. This forecast is based on the fact that transport operators will need to replace ageing vehicles in their fleets, which become more costly to run as they get older, and backlogs with certain popular truck chassis delaying the replacement of new bodies into early 2021.”

However, there is no doubt, says Holcroft, that the market is fragile – with customers being very cost-sensitive and focused on extracting best value for their spend. “Our goal is to reduce costs, thus enabling us to offer competitive pricing and enhance product value with our increased payload and durability in both our refrigerated and dry freight options.

“Serco is committed to supporting local manufacturing – we are proudly South African and geared to compete with the best technology and quality on offer locally and internationally.”

Holcroft says there has been a significant increase in demand for good quality pre-owned refrigerated trailers and rentals. “We have focused on these areas due to the growing demand.

“However, some constraints have been encountered where tare weights and description changes for rebuilds often take months to resolve, because of inconsistencies in requirements at the licensing department. In addition, inspections for special approval are often hamstrung because of poor communication between the Department of Transport and local licensing departments.”

He says there have been months of major bottlenecks at the vehicle testing stations which handled the issuing of certificates of fitness for new and used vehicles. The delays were the result of restrictions being placed on the number of tests permitted each day – even during level 1 lockdown – making the situation extremely challenging as volumes increased towards the latter part of the year.

“The economy won’t grow significantly until the government intervenes and corrects worrying aspects affecting the transport industry, such as the long delays at vehicle licensing departments and the burning of trucks on South African freeways. These issues are causing negative publicity both locally and globally, with little or no visible corrective action being taken.”

Holcroft adds that there is a need to create a more business-friendly environment in South Africa that will increase growth and reduce unemployment: “There are serious obstacles in the path of improving business.

It would give everyone concerned a tremendous boost if the authorities acted decisively and swiftly to remove them.”