Capital Equipment News July 2019

TRUCK RENTAL

Scania Rental – Driving flexibility

T raditionally, local truck owners have generally preferred outright pur- chase and ownership of their trucks. The majority of large fleet operators still own their trucks. Owning equipment and other hard assets, such as warehouses or property, may be part of company culture or simply a fi- nancial preference. Additionally, some companies prefer to own because it gives physical assets and a sense of control over the assets. However, in recent years the situation has significantly changed as varying dynamics – including the size of projects, duration of projects and the general tough economic conditions – have had a far-reaching impact on truck operators’ businesses. To help truck operators keep their businesses afloat during such difficult times, Scania South Africa established its Truck Rental division back in 2013, which, according to Gerhard le Roux, National Truck Rental Manager, has grown significantly as the rental culture entrenches itself in the local market. The first client to test Scania’s rental service was South African Breweries (SAB), now part of AB InBev, back in 2013 in a deal that was concluded over a beer. Typically the beverage industry/FMCG is subject to seasonal fluctuations in volumes and routes. For example, the festive season is particularly busy for SAB and it needed some supplementary trucks to cater for the additional volumes as and when required. To avoid incurring costs of having excess vehicles standing around during the slower months, SAB became the first ever recipient of a rented truck from Scania Rental. Richard Brown, Rental Sales Manager at Scania South Africa, says several In an environment where transport contracts are few and far between, and those that are available have become shorter, Scania’s Rental Division gives fleet owners – both established and emerging companies – the flexibility they need to navigate the tough economic climate. With the addition of the New Truck Generation range to the rental fleet, transport operators have immediate access to new technology vehicles that will help them run sustainable transport businesses, writes Munesu Shoko .

other industries also experience similar cyclic trends, and by embracing Scania’s short-term rental solution, they can obtain the trucks they need without the upfront costs and credit constraints associated with outright purchasing. Renting also reduces the need for a down payment and allows fleet operators to redirect the little cash they have to other areas of the business, especially during a difficult economic climate. Growing rental culture The rental culture in the trucking industry is growing. Scania Rental reports significant growth of its business in recent times. “We have seen a year-on-year growth of 25% during the first half of this year compared with the same period in 2018. We have seen similar levels of growth across all areas where we have dedicated Rental services, namely Gauteng, Durban and Cape Town,” says Le Roux. Le Roux notes that the rental trend is largely driven by the growing emerging contractor market, especially in communities situated close to mines. This group of customers is benefitting from the mines’ enterprise development programmes, with most of the transporting tasks outsourced to them, especially in the coal industry. For this reason, a large portion of Scania Rental’s fleet is operating in the commodity market, especially coal, with the tipper application

CAPITAL EQUIPMENT NEWS JULY 2019 20