Karooooo, which aims to become a one-stop logistics and fleet management platform, is working to bolster its systems to cope with the delays and time wasted on the road due to power outages in its home market.
The group, valued at R12.7bn on the JSE, is positioning itself as a leading global mobility software-as-a-service platform providing real-time data analytics to the transport and logistics sectors.
As the group reported full earnings earlier in the week, it noted that “the SA economy remains under significant strain predominately due to electricity outages”.
CEO Zak Calisto told Business Day that load-shedding was negatively affecting its customers who were trying to move goods and services around the country. Power outages resulted in longer travel and commute times, especially when traffic lights were out. This prompted the firm to tweak its systems to better predict the best times and routes for its logistics network.
“The fundamental word to this is that the economy is less efficient,” Calisto said.
“Load-shedding affects our customers. We’ve got generators which protect us. It affects the traffic. If you want your technicians to do X number of jobs, getting around town is a much slower process. So a lot of time is lost on the roads and that is for both technicians and sales people. In other words, the technician is inefficient, which means the number of customers they could normally attend to in a day is now quite different.”
For the company itself, whose largest business is vehicle tracking platform Cartrack, load-shedding hampers its ability to communicate with vehicles via mobile networks.
“And then obviously the cellphone networks, as you probably know, they are not delivering the service that they did when there was no load-shedding. We rely quite heavily on communications infrastructure and that affects us as well,” Calisto said.
SA’s largest mobile operators have been crying foul of the cost and impact of load-shedding on their operations over the past two years. Companies such as Vodacom, MTN and Telkom have struggled as extended power cuts have sometimes depleted the batteries of their cellphone towers, leading to customers losing their signal.
Last week MTN said its SA network availability remained under pressure due to the power outages. This is driven by about 90 days of load-shedding in the first quarter of 2023 compared to 14 days in the previous March quarter.
“What we’ve done recently is to get load-shedding times and be able to put them into our internal software. So we upfront plans and see where the congestion and traffic is. When we schedule an appointment with customers, we don’t run late because we already know that road is not going to take us 20 minutes it’s going to take us one hour and 30 minutes to get there, for example,” said Calisto.
“So we’re getting better at dealing with it, but it’s not quite perfect yet.”
This comes as the Cartrack owner looks to continue its rapid growth, hoping to cross 2-million customers for the first time in the financial year.
In the year to end-February, the number of subscribers increased by 12.5% year on year to 1.72-million, boosting subscription revenue, which accounts for more than 85% of all sales, by 17.2% to R3.01bn.
But the growth rate of Cartrack was a bit lower in SA, with the local base growing 10.9% and subscription revenue growing at 15% as the local economy remained hamstrung by power cuts.
However, net subscriber additions [connected vehicles and equipment on our platform] in the first quarter of 2023 “are in line with our expectations, with demand coming from both small and large enterprises,” the company said.
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