Fleet Management: In-house or outsource?
ButcherSA took a look at what types of vehicles are best suited for the transport of perishable goods, taking into account economic factors like fuel economy, maintenance costs, and in-house versus outsourcing options.
The range of vehicles required for meat transportation incorporate four, five, eight, 14 and 24-ton hanger vehicles for transporting carcasses and trailers designed to hold pallets, as well as door-to-door delivery vans carrying packaged meat in crates and boxes. For baked goods, vehicles range from two and four-ton bread vans to 30-ton grain tankers.
Vehicle life span
Delivery vehicles are expected to last eight to nine years, while larger trucks are replaced every ten years.
Because of the rough terrain traversed by especially bread delivery vehicles, heavy-duty shock absorbers and a stabiliser under the cab for all vehicles doing off-road deliveries are standard. There is also an extra channel fitted to the chassis between the cab and load body, as that is the point where the chassis is most likely to crack.
In-house or outsource?
Outsourcing benefits include the following:
- Third-party logistics (3PL) provides access to a team of well-informed, experienced supply chain professionals;
- The size and scale of a 3PL presents opportunities for greater effectiveness and cost savings. For instance, a 3PL can combine the freight of many different clients to give shippers far more buying power and reduce “empty” kilometres;
- Access to comprehensive, industry-focused technology;
- Commitment to continuous long-term improvement of services and savings;
- Vehicle repairs, and maintenance and replacement of major parts due to normal wear and tear are done by on-site workshop personnel who are available seven days a week at no additional cost for clients; and annual renewal of registration and license fees.
On the other hand, in the South African 3PL industry, there are negative factors such as increased global competition and, on the local front, stagnant domestic economic growth, labour unrest and geopolitical change.
In addition, manufacturers and retailers are faced with declining consumer demand due to rising food and fuel prices, and above-inflation price increases on basic services such as electricity and water.
In order to keep going, 3PLs often have to decrease their rates and margins so that they can secure new contracts, fully aware that they are going to make little or no profit, at least in the initial phase of the contract.
Whether choosing to manage transport in-house or outsource the process, for a successful outcome, it is critical to be cost-effective and maintain strategic and management control. Some companies may choose to outsource some of the processes, such as primary transportation, but retain some of the key functions, such as marketing.
According to SME Toolkit South Africa, one of the main benefits of keeping transportation management in-house is that staff are familiar with the business and its fleet needs. This allows for custom-tailored maintenance. Moreover, since the team is onsite, any changes in processes can be accommodated swiftly.
The hands-on approach ensures that costs are overseen and controlled; data can be accessed for analysis and reference whenever needed; no authorisation or formal requests are necessary; and last-minute problems are much simpler to handle by an in-house team.
Coldsure Distribution Services (CDS), KLL Distributors and RNS Distribution outsource ambient, chilled and frozen temperature range vehicle fleets.
Truck and trailer body manufacturers
Cool Maintenance manufactures insulation panels for insulated trailers; Dalucon manufactures and installs cold insulated truck bodies; and Elite Fibre and Serco Industries build fibreglass truck bodies and trailers.
Temperature control systems
GEA Refrigeration Africa designs, installs and maintains fresh, frozen and multi-temperature compartments for small and large trucks and trailers; Thermo King manufactures single and multi-temperature self-powered truck refrigeration; and Transfrig supplies direct drives, diesel electrics, Eutectic systems and eco-friendly nitrogen units.
Sources: Transplace and Transport World Africa