Fleet financing, administration and maintenance solutions provider Imperial Fleet Management is in the final stages of concluding the terms of a R1.5-billion contract, awarded in June last year, which requires Imperial to supply 2 500 vehicles to government-owned transport and logistics company Transnet, says Imperial CEO Nicholas de Canha.
He explains to Engineering News that, while the project is under way, operations are only expected to be finalised by April 2015.
De Canha explains that Imperial is the leading member of the consortium assigned to manage, maintain and finance Transnet’s fleet. The consortium also comprises vehicle finance and car insurance solutions provider WesBank and fleet and mobile asset management solutions provider MixTelematics.
Of the 2 500 assets supplied to Transnet, 1 750 are trucks and 750 comprise forklifts and materials handling equipment.
All vehicles supplied are accounted for off Transnet’s balance sheet. Imperial, as the title holder of the vehicles, has guaranteed to take on the end-of-life value of the vehicles, with the value usually spanning 36 months before the vehicles are sold on the used-vehicle market.
Imperial covers not only asset financing but also the maintenance risk of all Transnet’s assets. Transnet pays a flat rate to Imperial, thereby ensuring that Imperial covers any possible or necessary maintenance costs during the life span of a vehicle. This serves to stabilise costs and mitigate risks for Transnet.
Imperial also absorbs the administrative burdens for which Transnet would have been responsible, such as vehicle registration and the payment of fines. De Canha asserts that the demand for this service has grown across the fleet management sector since the introduction of e-tolls.
He states that Transnet is one of Imperial’s most complex clients, owing to the size and intensity of the parastatal’s fleet operation. “The trucks and materials handling equipment supplied by Imperial help run and maintain all the State’s ports, railways and other mission-critical services involved in providing infrastructure for South Africa. “Therefore, the service requirements are particularly detailed.”
The driver monitoring and control sector is also growing in the fleet management industry, says De Canha, who believes that this trend will continue because of the cost savings on maintenance and fuel, which he identifies as the two main aspects of fleet management where costs can be reduced.
With the industry’s small profit margins, there is potential for increasing efficiency mainly in increasing driver productivity. This entails improving driver sensitivity to aspects such as driving at the recommended speed and not breaking suddenly, which can collectively save between 10% and 15% on maintenance costs, he elaborates.
This can be done with accelerometers, which measure and record the speed of the vehicle and provide data on the driver’s speed and braking habits.
Using this data, Imperial gives clients feedback on their drivers’ performance and provides driver training on request.