Business owners will need to apply new strategies to cope with 2016 market conditions, forecast to be equally challenging as those in 2015.
So says Toni Fritz, head of vehicle and asset finance, business and commercial at Standard Bank.
Fritz’ says consolidation across the industry will result in some smaller operators falling by the wayside this year. She predicts that operational mergers, acquisitions and subcontracting will strengthen as companies move to increase market share in a highly competitive, fragmented market.
She believes the lives of fleets will be further extended, and predicts that normal replacement cycles will be delayed. Fritz says the use of technology to monitor driver behaviour, manage compliance and optimise fuel consumption – while reducing maintenance costs – will gain in popularity.
Operators should look to diversify their business activities and/or offer ancillary services to different areas in the value chain. An increased emphasis on safety, with new regulations and other key industry activities, are forthcoming, she says.
Companies will likely look across South Africa’s borders for balance sheet growth and to tap into un-serviced markets. She says transport operators are likely to look towards their partners, including primarily financial institutions, for support and assistance.
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For financial institutions and credit lenders, the emphasis this year will be to develop solutions that increase fleets on the back of new medium and long-term contracts; finding alternative vehicle funding models; identifying risk-reducing technologies and making one-stop banking easier and more convenient.
Financial services will need to innovate when it comes to insurance due to inherent risks in cross-border operations. They will need to create awareness of current and pending legislation – and the changes thereto – while assisting with driver training.
In conclusion, Fritz says partnerships and industry ‘think-tanks’ that cross artificial barriers within the sector and which promote discussion and understanding will play an important role in finding credible solutions to the transport industry’s challenges.