PROBLEMS OF THE HAULIER AND CARRIER.
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Hiring Out a Vehicle and Supplying Partial Service Only.
IN the majority of eases when one is asked to quote for the hire of a vehicle for any particular job occupying a certain period of time, the procedure is straightforward enough and the matter Merely involves the choice of the best basis Of charging, with subsequent calculations. Now and again, however, one meets something out of the ordinary run, and then the question is different, as one .has to work out the basis before dealing with the details of the actual job.
Au instance of a haulage job in this class was brought to my notice a week or so ago, and, as It is a type of problem which May occur at intervals in the future experience of many, I deal with it here for their benefit.
Two men own a 5-ton lorry which is used for furniture removal work: It has now become due for a complete overhaul and they find that they will be without its services for 13 weeks. During this period they decide to keep on their own driver and to hire a lorry without a driver, which they will supply with petrol and garage in their own shed. They recently asked a haulier in the same town to quote for a lorry of the same capacity, and it is he who has written to me for a suggested method of working out his quotation. .
As everything depends upon the expense of the' jab; the first thing is to arrive at the running costs and standing charg e a. Remembering that fuel does not concern the haulier in this instance,, we find that the cost per mile for the 5-tonner is 4.64d., calculated in the following way : --Oil, 0.5d.; tyres, 1.12d.; maintenance, 1.7d.; depreciation, 1.32d. Under t h e heading of standing charges there will be licences at 216d. per week, insurance at 92(1., and interest on capital at 219d., per week. Wages will be paid by the furniture removers, and garaging will be provided, so that we can neglect these amounts, as we are thinking only of the haulier's expenses here. Totalling up, we get £2 3s. lid, a week for the items
mentioned. . Before considering the questien. of establishment expenses and, profit, the suggested basis of charging demands attention. There is no fixed weekly mileage and no agreed weekly inclusive charge by the haulier to the hirers; therefore I advised charging so much per mile for running costs and a fixed sum weekly' or monthly to cover standing charges, establishment expenses and profit: In this way there is no fear of the haulier being out of. pocket because the lorry is not used temporarily or only covers a small mileage owing to slack business In the furniture removal line. If a fixed weekly figure for everything were agreed, the mileage covered might be so high as to run no big maintenance and .tS7re bills without a corresponding recompense for the haulier.
is the profit is to be gained out of the weekly fixed sum it will suffice if the mileage price just covers the Three Leyland 4-ton lorries excapated in the city of Van shovel. Overloads up to 6 all-British vehicles stan employed to receive the soil couver by a Diesel-engined tons are frequent, but these d welt up to the work. total costs on this account-4.64d. per mile; we will assume, therefore, that the price to the hirers is 4.7d. per mile. We have already discovered that the haulier's bill for standing charges will be £2 3s. lid, a week, but, so far, have not decided on the establishment expenses or profit to he charged. As only partial service is to be given—there is no driver to be provided or garage arranged by the haulier—he will have to base his demands on the duty he has to execute. Now, the full running costs would be 7.14d. per mile, of which fuel represents 2.5d., or slightly over one-third. In the standing charges section, which in full amounts to 1,457d. per week (or £6 Is. 5d.), the missing items of wages and garage rent and rates represent £3 17s. 6d., or about four-sevenths.
In view of the missing services, corresponding to one-third and four-sevenths approximately, it seems reasonable to put the profit allowance at £2 to £2 5s. when full service should yield £4 10s. a week profit. Next we must remember the item of establishment expenses. There will be a certain amount of work to be done in the haulier's office, as he will have to keep a check of the mileage, send out accounts to the hirers, and towards the end of the period the owner will have to think out schemes for the future employment of the lorry. On the whole, however, there will be a good deal less work for the office staff to do under the proposed arrangement than if the lorry were fully employed under the direct control of the proprietor. In the circumstances, therefore, I suggested that 10s. a week would be a reasonable sum to allot for the labour involved; normally the amount would be somewhere in the neighbourhood of fl. 10s.
Adding up the standing charges of £2 13s. 11d., profit allowance £2 5s., and establishment expenses of 10s., we get £5 Ss. 11d. To make round figures, let us say £5 10s. a week. This figure will then-be the weekly charge to the hirers, plus.4.7d. per mile. The weekly profit will be £2 5s., plus any small amount accruing from 'the difference between the mileage cost and the mileage charge.
This may not seem a geat deal to expect in the way of cash balance per week for this lorry, but in this particular case the charge has been kept as law as possible for the sake of influencing future business; the hauler in question and the hirers do a gqod deal of work together. This point was heavily stressed by my correspondent.
I would suggest that where a greater profit is wanted a surcharge be arranged for anything over a certain weekly distance, say 250 miles, at the rate of id. per mile or thereatiouts, for it must be remembered that in the furniture removal trade much longer runs by road are now in vogue.