Success Lies In The Details

Overcoming the challenges of a highly commoditised market means you need to be smarter and more cost-efficient than your competitors. Here's how Christoph van Zyl is refocusing his business to achieve just that.

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“Henry Ford said that to improve productivity means less human sweat, not more. That’s what TomTom means to us."

In 2014, Christoph van Zyl went from working the night shift on a quarry to launching his own transport company, Renavatio Vervoer. Named after a boat in the sci-fi movie The Island, Renavatio means ‘rebirth’, an idea close to the new entrepreneur’s heart.

Christoph chose the transport industry because of low barriers to entry. By borrowing money against his house, he was able to purchase his first truck, a Mercedes-Benz extra heavy interlink. He then tapped into his mining contacts to secure a few coal transport contracts. Once he had a track record, he grew his fleet to six rigs, all financed through Mercedes-Benz.

“It was an industry I could enter fairly easily, but so can everyone else. There’s a huge oversupply of trucks in South Africa; it’s an extremely open market,” he says.

This means Renavatio operates from day to day with no security and is expected to be able to deliver the same rates as large operators with 100 to 200 trucks in their fleets.

“They’re operating on completely different economies of scale to our business, which has a fleet of six trucks,” he explains. “It’s a heavily commoditised market and contracts are won and lost on price. In a tight economy, this means you’re in danger of your margins eroding to the point where your business is no longer sustainable.”

The very real challenges of transport

By November 2017, Christoph had been operating for just over three years, and was facing his greatest challenges yet.

“Our coal mining contracts dried up, and we needed to pivot to another industry. I had friends with connections to farmers, and secured contracts delivering grain from farms to silos.”

Although the pivot was successful, the change in industries brought new, unexpected challenges. “Our new contracts meant we needed to find farms off small, unmarked dirt roads. I would sit on the phone with one of my drivers at midnight, talking him through the directions. If he missed a turn-off though, he’d need to turn this huge truck and trailer around, invariably burning out the clutch.”

Rising fuel costs, inefficiencies and the challenges of locating their customers was putting a huge strain on the business.

“I had a friend who worked for TomTom Telematics and he told me about their solutions. Cash flow in this business is tight, and I hadn’t entertained the idea of investing in additional hardware or software, but I was getting desperate. I called him and asked him to walk me through the solution. Within half an hour I was sold. It honestly seemed too good to be true.”

The TomTom Telematics difference

Like many transport operators in South Africa, Christoph believed the capital expenditure to set up a telematics system across his fleet would have put too much strain on his cash flow.

However, because the TomTom Telematics team has worked so closely with local operators and understands their needs and challenges, they have developed a subscription model where customers don’t need to invest a large capital outlay into TomTom Telematics’ technology. They receive the tech and software, including installation, at no extra cost for a monthly subscription fee.

This fact was a game-changer for Christoph — he could instal ground-breaking technology into his fleet without a capital outlay. “It was this model that made the solution possible for us, and the impact on our business was immediate.”

A leading edge

“‘Just follow the TomTom device’ has become a mantra for us. Drivers who were previously scared of entering specific areas because they were convinced they’d get lost are confident to go anywhere now. We’ve delivered a load of lime to a farm on the Lesotho border. All we need is a pin drop from our customers and we can find them.”

The system offers so much more than the security of drivers knowing where they are. “The percentage of work done for money expenditure is not even relatable,” says Christoph. “The system works perfectly and has given us a return on investment of 8 000%. We save 2 000 litres of fuel per truck per month, simply because the system monitors driving style, idling time and a host of other data. Drivers can log in and check their performance on a scale of one to ten — and they’re incentivised to do so. We pay monthly bonuses based on their personal scores out of ten.”

Not only has Christoph managed to significantly cut his operating costs, allowing him to be more competitive in a highly commoditised market, but he believes he now has the edge to survive the current tough economic conditions when many other operators won’t.

“Now is when we prove ourselves and keep our head above water while we wait for the economy to turn and consumer and business confidence to return,” he says.

Rich Townsend