Serco steps up production to help restore damaged supply chain

Truck and trailer building company Serco is fast-tracking the construction of vehicles and repairs in a concerted 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 says it is clear this sector was hit hard by the unrest and that it is imperative to restore supply chains as quickly as possible. “We have stepped up our production and repairs in the short term to accommodate the demand, but there are limiting factors involved – availability of truck chassis, as well as a four-to-seven-week manufacturing lead time from confirmed order,’’ he says.

Rental vehicles can be hired in while critical transport equipment is replaced, but this comes at a cost that will ultimately impact transporters and the consumer. The replacement costs for new equipment are a significant cost to bear if not fully covered by SASRIA, with a truck and refrigerated semi-trailer costing around R3,2m and a smaller truck and refrigerated body costing around R1,4m.

The current situation is exacerbated by uncertainty about how long SASRIA will take to settle claims, with the result that some retailers cannot reopen or replace vehicles until confirmation is received.

Holcroft says the economy had been under severe strain prior to the violence, with the third wave of Covid-19 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.

“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 local businesses will start rebuilding as the SASRIA funds make their way to the companies impacted by the recent unrest,” he predicts.