Problems of the
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HAULIER am
CARRIER
Municipal Haulage Rates are Far Too Low and a General Levelling Upwards is Most Desirable
THE article which appeared in The Commercial Motor on April 20, citing some examples of quotations for municipal haulage, has attracted sufficient tttention to justify me in returning to the subject. One of my haulier friends, writing from a rural area, tells me that the local county council pays only 21s. per day for 30-cwt. lorries, 25s. for 2-tonners and 30s. for 2i-tonners. Those rates are ridiculous, even when making maximum allowance for the fact that operating costs in rural areas are somewhat less than those in urban districts.
I have been searching some of my records and have selected, for discussion, the rates shown in the accompanying graphs and table, which are actually being paid this year in 12 localities. These have been chosen as representing the rates paid in places all having what I might term the same cost characteristic. They are all fairly big towns or counties which are, for the most part,
industrial. In other words, the rates are reasonably com
parable one with another and with the standard set by average conditions, to which The Commercial Motor Tables of Operating Costs may reasonably be applied.
Figs. 1 to 5 have been drawn, first, to show how widely, in the majority of cases, these rates fluctuate and, secondly, to show how those rates compare with charges which I insist may reasonably be described as minimum. There are four lines on each graph. The rig-zag line joins points which indicate the rates for different localities.
Of the three horizontal lines, the lowest, composed of short dashes, is the average of those actual rates. The uppermost horizontal line indicates the rate calculated according to the figures in The Cornmercial Motor Tables, assuming that each vehicle covers 50 miles per day. The other horizontal line, in dot
4 .1
Daily rates for 2-ton lorries are shown in fig. 3.
and dash form, shows a fair charge similarly• calculated on the basis of a vehicle mileage of 35 per day.
The most striking feature as demonstrated by these diagrams is the inadequacy of th.e actual rates paid. Only in two cases are they equal to the minimum, according to the Tables. Those two are in towns L and M in payment for 5-ton lorries.
One of the difficulties in the way of arriving at a proper estimate of charges is the variation in daily mileage. Generally, the actual figure lies between 35 miles per day and 50 miles per day, fair rates for which are indicated in the graphs.
Useful comparison can be ,made between the average rates paid and those which I suggest are reasonable. The biggest discrepancy appears to be in connection with 3-ton lorries, the average for which is only 35s. per week,' as against 55. per week for a vehicle running 50 miles per day. In no case is the difference less than Ws. per day, and it would seem that, as a beginning, hauliers all over the country should stipulate a minimum increase of 10s. per day in municipal haulage rates.
The figures in Table 1 of our tables, which are summarized in the lowest paragraph headed "Time and Mileage Charges," may he cited in support of this claim.
The running costs of a I-tonner are based on a mileage per gallon of petrol of 17. In the majority of cases, municipal haulage, with its low daily mileage, will involve a lower mileage per gallon. Similarly with lubricating oil, for which 1/20d. per mile, based on about 1,000 miles per gallon, is debited. The tyre cost is an average figure for vehicles of this capacity. Maintenance includes provision for keeping the vehicle in a condition which would be insisted upon by any municipal engineer and will probably soon be made compulsory under the Road and Rail Traffic Act.
Depreciation is based on a life of about 100,000 miles for the cheaper class of vehicle and a somewhat longer life for the moreexpensiveatype. The net running cost is 2.19d. per mile. A fair charge, as set down at the bottom of Table 1, is assumed to be 21d. per mile.
About the standing charges there is little which needs demonstration, except the item of wages. The figure set down is the Trade Union rate of 23 6s, per week. I would not go so far as to state that to pay a lower wage would be to fail to comply with the conditions of the new Act, or with those included in every municipal contract, namely, that the wages should be those prevailing in the district for the industry concerned. The figure of 23 per week should, however, be a minimum. The total of standing charges is 974d., say, £4 per week.
" Overheads " Estimated at £1 Per Week.
The business of every haulage contractor involves him in "overheads." For these an amount of 21 per week is assumed. It is so obviously a minimum that I can hardly imagine anyone even giving the question of disputing it a second thought. Then comes profit, for which 23 per week has been taken as fair.
The total of standing charges, establishment costs and profits amounts to £8 per week, and that is the minimum revenue which any contractor should receive for the hire of a 1-ton lorry, even supposing that no mileage whatever is run. That sum is equivalent to 3s. 4d, per hour, on the basis of a 48-hour week, which is usual on municipal contracts.
Taking an 8k-hour day, that fixes an absolute minimum of 269. 8d.. per day for a 1-ton lorry, which rate returns only the net profit specified, 23 per week, if the vehicle did no mileage whatever. In only one of the five actual rates quoted is this 26s. 8d, per day, or 3s. 4d. per hour, exceeded and then by only 1d, per hour. The
average is 25s. If a mileage of 35 per day be assumed, that adds 6s. 7d. to the daily rate, which should, therefore, be 33s. 3d., say, at the least, 33s. per day.
It is of interest to note that this is approximately the figure to which the Leicestershire and District Horse and IVIotor,Owners Transport Association decided to adhere for the current year. Even at that rate, for every mile per day in excess of 35, the haulage contractor is making a present to the municipality of 21d.
There is clearly no need for use to go into such detail as above, in connection with the other sizes of vehicle. The basis of calculation is precisely the 'same in each case and the figures can always be ascertained by reference to The Commercial Motor Tables of Operating Costs, copies of which can be obtained gratis on application to the Editor of this paper.
Wide Difference in Rates.
To, return, for the moment, to the previous article on this subject, where the rates quoted for a 30-cwt. lorry varied from 27s. Gd. to 50s. per day, the 27s. 6d. rate being accepted, this municipality is indicated in Fig. 2 at D. It will be noted that there are two datum points on the ordinate D.
The lower one is the 27s. 6d. to which reference has just been made ; the upper one, 33s., is that at which the same municipality awarded the contract last year. There is this astounding state of affairs to be noted : in a year when costs of operation must inevitably increase, some contractor has been unwise enough to accept 5s. 6d, per day less than the figure paid last year.
There can be no doubt whatever that one reason why so many haulage contractors are able to quote the absurd rates for municipal haulage is that they underpay their drivers.. I have plenty of proof that this is the case. In all those instances it is true to claim that the municipality which employs haulage contractors under those conditions cannot escape the blame for them.
When the new National Wages Board gets to work and stabilizes the wages of drivers of commercial motors at a reasonable level, it may be that seine, at least, of this futile rate-cutting will cease. Those hauliers who refuse to descend to such low levels will have the satisfaction of knowing that they will, under the new conditions, be tendering on level terms.
Even that improvement, however, will not apply, so far as I can see, in respect of the owner-driver. For him some other means Fill have to be applied, although I think it is a fact that the influence of the owner-driver on municipal rates is comparatively insignificant.
In another article 1 hope to deal with the rural quota tions, referred he earlier. S.T.R.