Feeling the economic pinch? Scania has a solution

Cost-saving has always been important in heavy duty truck operations, but in these trying economic times, it has become a top priority for many fleet managers. ROWAN WATT-PRINGLE speaks to Scania to find out what managers can do to relieve the pressure

The logistics sector directly impacts South Africa’s economic growth, contributing 48% to GDP in 2019, and is integral to business efficiency. But as fleet managers feel the pinch of tough trading conditions, many companies are being forced to reduce fleet size and staff numbers, putting significant pressure on business sustainability.

As business opportunities shrink, margins tighten and companies chase short-term revenue, businesses are increasingly being forced to take bigger risks in terms of safety and compliance, running trucks for longer and deferring upgrades, while at the same time increasing maintenance intervals.

Nomonde Kweyi, general manager marketing and communications at Scania Southern Africa, believes the challenges being faced by the logistics sector will force positive changes as fleet managers and business owners work closer with vehicle manufacturers to find new solutions. “As providers of equipment that carries the national logistics load, we recognise the integral part we play in supporting business sustainability,” she says, citing the multidimensional focus Scania has employed. “We’ve placed financial agility at the centre of a repurposed value chain. By repackaging maintenance and repair offerings, bundling essential services and critically assessing the value chain, we can offer customers industry-leading cost savings across our new and used truck offerings.”

Harold Donachie, Scania SA general manager: used sales, highlights the critical role that used truck purchases can play: “During these uncertain economic times, customers may lack confidence in contract longevity, while the competitiveness of the business means that used vehicles are an attractive proposition. The repayments on used vehicles are also lower than on new vehicles, which helps to alleviate cash flow pressure.”

Buyers of used vehicles must take various considerations into account, he says, including dealing with a reputable organisation, ensuring there are sufficient service points in one’s operating area and checking whether service packages and vehicle service histories are available.

“During these tough times, Scania offers customers some flexible terms through Scania Finance and a range of service packages on certain products to provide peace of mind,” he notes. “The service backup offered by reputable suppliers can never be overstressed, while the service and experience of Original Equipment Manufacturers (OEMs) represents a distinct added advantage when looking at used trucks.”

Donachie highlights one major area of concern, namely, the low prices of late model trucks being advertised. “The question that should always be asked is, why is this truck so inexpensive?”

Kweyi says that Scania can help fleet managers to investigate alternative cost-saving initiatives in addition to the usual total cost of ownership calculations, including access to the latest technology for insight into cost-efficiency. “It’s a long-term commitment we’re making to a logistics sector that now, more than ever, requires affordable access to world-class products and services,” she says. “Safety cannot be compromised while cash flow dries up, but business needs revenue to ensure sustainability. It’s a challenging dichotomy that as a truck manufacturer we have the responsibility to fully explore.”