Car hire, sales and fleet management group Zeda, which has ramped up its focus on leasing medium, heavy and extra heavy specialised commercial vehicles, says it is determined to ensure minimal disruptions to clients’ operations amid the latest bout of violence against trucks.
This comes as at least 21 trucks carrying goods were set on fire on national roads in various parts of the country over the past week with the army being deployed in four provinces to quell the violence.
The company, valued at R1.8bn on the JSE, and which has been struggling to gain traction on the bourse since its unbundling from Barloworld, has adjusted its growth strategy to increase focus on the commercial heavy vehicle market that is thriving thanks to inefficiencies in the rail network.
Zeda confirmed it was among logistics and freight companies caught in the crossfire of trucks being torched across KwaZulu-Natal, Mpumalanga and Limpopo last week.
The company told Business Day that its trucks had been affected, but the impact had been minimal. “All our trucks operating on the roads are adequately insured,” it added.
Traditionally Zeda’s growth strategy has been closely aligned with tourism-based businesses, including airport rentals, however CEO Ramasela Ganda has been clear in articulating that heavy commercial vehicles, which make up about 5.5% of its entire fleet and have leasing contracts running for about nine years, would be a key growth pillar in the future.
Demand for leased trucks to transport cargo to and from markets or ports, driven mainly by the booming mining, fast-moving consumer goods and e-commerce sectors, is on the rise.
Reporting results for six months to March, Ramasela told shareholders that the move into the lucrative heavy trucks market had started to yield new growth opportunities with the leasing segment’s revenue increasing by 6% to R1.1bn. This was attributable to an improved mix of heavy commercial vehicles, and increased penetration within Corporate and the Greater Africa business.
According to the Road Freight Association (RFA), trucks carry 80% of the goods that are moved in and around SA and Zeda is looking to increase its heavy commercial service offering to these industries, setting its sights on a piece of that pie.
However, the attacks on dozens of freight trucks this week have spooked the freight industry and customers, with the National Bargaining Council for the Road Freight and Logistics Industry warning that the sustainability of trucking companies and the safety of drivers is “at stake”.
Police minister Bheki Cele said police are hunting for at least 12 people believed to be linked to the co-ordinated attacks labelled as “economic sabotage”, with five suspects arrested so far.
Zeda, which holds the licence to the Avis brand in SA, remains undeterred in its strategy to penetrate deeper into the heavy commercials market saying, “we continue to support our clients to ensure minimal disruption to their operations.”
Meanwhile, it is working towards settling its legacy debt having paid back nearly R800m to Barloworld and adding vans to its portfolio to cater to the demand from the courier industry.
The Johannesburg-based company also said it would be launching a new product before the end of the financial year to cater to customer mobility requirements, including the expansion of its subscription offering for a period beyond 12 months.
The consumer services group has struggled to maintain momentum as its share price has nearly halved since listing at R18 in mid-December. The stock is down about 27% this year and 41% since listing.
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