WHEN COVID struck, no one was prepared, a lot of organisations and businesses were negatively affected and there were forced to shut down but there are some that are survived and still surviving, today we had took a look into Southern Africa and we had a chat with South African businessman Senzo Tsabedze who in 2003 launched the first ever black owned fleet management company in South Africa and today it is one of the top companies in the country.
We asked him a few questions with main focus on survival during the pandemic.
Can you tell us a bit about yourself and Afrirent Holdings?
My first business was in 1998 at the age of 22 it was called Indalo Consultants which did construction. I started the fleet business with two trucks that i bought on an auction and used to rent them out. I also used to own a night club in Nelspruit when i was 23 years old.
Other companies i have owned include Indalo Fleet Solutions, Afrirent Energy, Afrirent Logistics, Sobantu Rent to Own, Indalo Hotels and Leisure.
Has the COVID19 pandemic affected your businesses/divisions within Afrirent differently? How did the pandemic affected fleet management business in the region?
Yes, apart from falling demand, government entities also reduced fleet services demand because they were unable to obtain crucial inputs or supplies. Around 40% of Afrirent clients reported some disruption to their supply chains during the second quarter of 2020.
Supply disruption was reported to be higher in sectors that expected larger social impacts, implying that supply effects could have been a factor that held back output too, and more so in some sectors than others.
Tell us about the fleet management business and what has made your company stand out in Southern Africa?
Afrirent Fleet Management’s cornerstones have always been investment in technology, relationships and extraordinary customer service. We are extremely proud of continuously building on our value driven, world-class fleet management and fleet telematics offering.
What do you think can be done in your industry to ensure better preparedness for sudden pandemics?
The COVID-19 pandemic adversely affected all facets of the fleet management industry. Due to the uncertainty caused by the pandemic, Afrirent have had to rethink their business strategies while keeping costs down and employees safe.
Some of the measures implemented by Afrirent to get by include:
Remote working: The main change that we’ve witnessed over the past few months is that the congregation and starting points for fleets aren’t fixed as it previously was. Drivers and technicians are also beginning their workdays from home rather than company offices. Keeping track of assignments, vehicles, and drivers is now being done remotely.
Automation and mobility: Fleet companies are increasingly moving away from the old-fashioned approaches to record management. The uptake of fleet management solutions has allowed companies to minimize in-person contact as much as possible by enabling back-office employees to work remotely.
Running a paperless organization has never been this critical for fleet companies. It has reduced physical touchpoints that would hitherto act as coronavirus transmission vectors besides allowing a significant percentage of employees to work from home.
Better route management: As lockdown measures came into effect, movement became a hassle. Drivers have to know about the best routes to take if there are restrictions in specific areas. Without the usual backup teams working at the office, many have found this to be challenging.
Thankfully, Afrirent are leveraging fleet management solutions to get accurate information about the best routes to take. Initially, fleets were reporting delays resulting from shutdowns in different states, cities, and municipalities. Thanks to the uptake of fleet management solutions, they can now plan and optimize different routes.
Cost optimization: Undoubtedly, the pandemic cause significant financial implications for Afrirent. Normal business operations were severely affected, thus leaving many companies on the brink of bankruptcy.
To mitigate the revenue shortfalls experienced across the industry, Afrirent are implementing stringent austerity measures to help them minimize operating costs. Likewise, they leverage the available productivity tools to optimize work hours, minimize downtime, and increase driver availability.
Preparing for eventualities: In this period of uncertainty, it’s a good idea to prepare for any eventualities that may arise. This is exactly what fleet management companies are doing. Fleet managers are implementing protocols to respond to incidents such as drivers getting infected while on the job. Such measures ensure that both employees and customers remain safe.
Pre-empting worst-case scenarios and having a comprehensive action plan to address them goes a long way in helping fleet managers prepare for them. These are some of the pertinent questions that fleet managers should ask themselves while preparing for eventualities:
- What will happen if an employee gets infected with the virus?
- Who will cover for sick employees who have been forced to self-isolate?
- What do we do to ensure the safety of our employees and customers?
How did you managing your workforce during the intense lockdowns?
We used some innovative strategies which included Educating Fleet Crew, Reduced Customer Interactions and Limiting Vehicle Occupancy:
How do you see your industry in the next coming years?
Okay interesting questing, allow me to take a bit of time explaining a few trends I see happening in the near future.
Over all, data and telematics will be key to understanding and making changes in fleet management business. By utilizing fleet-specific data, you can make decisions that will help your fleet succeed post-pandemic.
Trend #1: Hyper-focus on operational improvement
It’s no surprise that COVID-19 forced fleets to take a deeper look into how they operate in the “new normal” compared to pre-COVID times. Whether the purpose behind this is to help scale fleets to take on new business opportunities or to pull back to compensate for disruption in supply and demand chains, it has made a large impact on how fleets choose to adjust their operations.
One important aspect that fleets may have discovered is that, no matter what their circumstances, there are new opportunities to help earn customer loyalty and brand reputation by working to go above and beyond for their customers. Just because things were done in a certain way in the past, doesn’t mean it is the best way to do it tomorrow or even today. Now is the best time to reinvent and to optimize efforts for maximum output.
Customers will respond to how you treat them in less than ideal times. You will be able to retain your customers depending on how you respond to adversity. That’s the opportunity that COVID brings here.
Trend #2: Cost reduction
The ability to make educated decisions on fleet trends and data is another key fleet function that has emerged from the pandemic. To help reduce costs, fleets need to be more strategic about how they use their assets. Now more than ever, fleet mileage is important to maintain a healthy fleet as long as possible. It is important to view your average distance per vehicle in order to properly rotate our fleet as needed.
Trend #3: Right-sizing
During the early days of the pandemic, many fleets sold vehicles to help offset unexpected losses and expenses. However, now that we are approaching the ‘new normal,” those fleets may now be realizing that they need those vehicles back to keep up with current operation levels.
Your company joined the SAVRALA, has this added any value?
Southern African Vehicle Rental And Leasing Association is the trade body for companies engaged in the leasing and rental of passenger cars and commercial vehicles.
Joining SAVRALA gives Afrirent the credibility of belonging to a professional trade body, a voice in our powerful lobbying activity and access to a business and legal support service tailored for the vehicle rental and leasing industry.
Can you tell us about your regional expansion plans?
Afrirent Fleet Management has got a relationship with Namrent – a fleet management company based in Namibia. We have had engagements with both public and private sector entities with a view to introducing the fleet management model into Namibia.