Construction World October 2016

EQUIPMENT

FINANCE and INSURANCE ‘part of the deal’ Managing fleets of construction trucks is a vital function within any sizeable contracting firm, as failure to keep the wheels turning could spell disaster – especially in times of low margins and on high-risk jobs. Global trucking leader Scania has found ways to help customers avoid such downsides. by Scania in a process of collaboration with our insurers; customers can rest assured that only the highest quality of repair is acceptable, and that genuine Scania parts are used.” However, the assessment of risk with By Paul Crankshaw

every customer goes further than just the vehicle, to a comprehensive needs analysis as required by financial sector regulations. “In the construction sector, there are over 100 different risks that our customers have to take into account when running their businesses,” she says. “These include changing markets, safety, occupational health, the political situation, quality management, procurement, storage, environmental, finan- cial, physical and operational.” She highlighted the convenience to customers of Scania’s packaged services, where information on all aspects of vehicle operation and ownership were kept inte- grated and secure.

According to Andre van Eeden, national sales manager at Scania Finance Southern Africa, the company’s focus is increasingly on providing a ‘total solution’ to reduce risk and promote sustainability. “Buying a Scania construction truck opens the door to a range of integrated services that help our customers run healthier businesses,” says Van Eeden. “In the financing and insurance space we go beyond the traditional offerings to ensure that our services work together and strengthen our customers’ ability to thrive – despite the ups and downs of the construction sector. “Scania’s ability as an original equip- ment manufacturer (OEM) to support the customer through our quality trucks and high standards of service, for instance, affects directly the customer's ability to meet their financial obligations with Scania Finance,” says Van Eeden. He said Scania Finance’s position as a ‘sister company’ also allowed it to offer prod- ucts like operating leases, as the company could secure the residual value backing from Scania as an OEM. To keep the relationship simple and streamlined, customers are allocated a Scania financial representative (FR) to liaise with on all aspects of finance. “These FRs are specialists in the trans- port industry, so are well-versed with both strategic and day-to-day transport issues,” he said. “This makes them better able to understand the customer’s business – even sharing some aspects of best practice as they go along.” Clearly, the system is working well, as 68% of Scania trucks in South Africa are purchased with loans from Scania Finance. “Having a customer who is financed – and even insured – through Scania also helps when the customer encounters hard times, as we have substantial insight into their business through the years of our partner- ship on a number of fronts,” says Van Eeden. “This makes it easier for us to understand the problems they are facing, and to propose appropriate solutions – which may not be so easy for a mainstream bank.” This has become more important in recent years as difficult trading conditions in construction have certainly taken their toll on contractors’ demand for trucks; Van Eeden >

says there is still replacement of vehicles by established firms, but there are not many players who are actively adding to their fleets. This pressure on the local market has meant more interest in looking for work in neighbouring countries, especially Namibia and Botswana. “Our operations in Botswana, Namibia, Zambia, Tanzania and Kenya make it possible for customers who find medium to long term contracts there to actually do the financing in that country,” he said. “If that is where the trucks will be working, it’s generally better for everybody if finance is sourced there – as our service as Scania Finance can link in with other Scania support services in-country.” Insuring to keep wheels turning Recognising that financing for a customer’s Scania trucks is only one early step in a long and difficult business journey, Scania Finance has also has designed fit-for-purpose insur- ance cover with the contractor in mind. “Running a business in the construction sector is fraught with risks, many of them relating to the equipment that contractors rely on daily,” says Belinda Felix, insurance manager at Scania Finance. “Our focus with insurance is to keep our customers’ businesses working – even when accidents or breakdowns cause unexpected disruption.” Felix emphasises the importance of the service level agreements that Scania has negotiated with the large insurers, so that customers can be assured of quick and full responses in times of emergency. “We know that disruptions such as accidents and breakdowns can potentially threaten a customer’s viability – and certainly can affect the profitability of a contract,” she says. “So we offer our insurance service as a solution, because it is in our interests that our customers’ trucks are well-insured, properly repaired and on the road again as quickly as possible.” Turn-around times on customer claims are monitored, for instance, to make sure that the insured truck is in and out of the repair facility as quickly as possible. “We also recognise that quality of work- manship in these repairs is as vital as the speed with which the work is tackled,” says Felix. “Facilities must therefore be accredited

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Andre van Eeden, national sales manager at Scania Finance Southern Africa.

Belinda Felix, insurance manager at Scania Finance Southern Africa.

CONSTRUCTION WORLD OCTOBER 2016