AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

KELVIN IL REPOR

12th November 1983
Page 41
Page 42
Page 41, 12th November 1983 — KELVIN IL REPOR
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

rating Costs, on sale now 3.50 including postage, iw our well-established em and cover the range of cies in most common use. rice again the tables have 1 compiled in association Mercedes-Benz Transport sultancy, a subsidiary of cedes-Benz (UK) Ltd.

I too frequently we hear operators cannot get the S we say should apply. This the more strange since we base information supplied cross-section of the .ating industry; vehicle and ponent manufacturers, associations, the Treasury, I authorities and insurance ers.

ibsequent inquiries usually :ate that overheads are g charged at less than the sr cent we recommend and a profit margin of less than sr cent is acceptable to ators.

our experience, anything than 20 per cent for these s is a step towards ofitable operation and the ator is selling his services sly to cover costs. Provision

t be made for the future. 3 are also asked how to y the utilisation charts

h accompany each table. :A, one chart shows the of operating, the other is the recommended je.

ese figures are shown at a ty of mileages. They also hown as 50 per cent ation or 75 per cent. We assumed that vehicles are r fully laden on every mile cover. Nevertheless, the stor must recoup the cost ad mileage.

erefore, a vehicle travelling niles fully loaded and returning half loaded is 75 per cent productive but the round trip cost must be included in the rate. The same applies if it returns empty. The outward trip traffic must bear the empty return trip costs.

Similarly, if a vehicle is delayed by the customer at either end of the trip the hourly standing charge must be applied.

On the bus and coach side of the industry the same rules apply. A coach operator taking a party 20 miles to the theatre should not be expected to bear the waiting or costs of an empty return trip when a holiday party is dropped one week and picked up seven days later.

Probably the most contentious point in the tables is our calculation of interest. Whether this is paid in the hire purchase or bank overdraft cost, it is oncost, and is normally charged. However, there are those operators who do not pay interest they purchase from capital reserves. They do not include interest in their charges — they should.

If the amount used to purchase the vehicle had been invested it would have attracted interest. This intekest must therefore be earned in the haulage rate.

Burying overheads, cutting maintenance and ignoring interest will reduce haulage rates but accelerate bankruptcy.

Another heavy item of capital expenditure is the vehicle excise duty, which is paid in advance. This also would attract interest if invested, a point which must be taken into account when calculating overheads.

CM's tables are widely and wisely used by operators to compare their own rates, by transport users to check quotations from hauliers and by insurance companies to compute loss of use claims.

Every traffic area receives at least one copy to assist the Licensing Authority when considering an 0-licence application.

They are meant to be used as a guide. We appreciate that local authority rates vary across the country. We know that operators can obtain substantial discounts or take-back prices on new vehicles. These items may create small variations.

Insurance cover may vary between brokers, in the same building, for identical cover. However, even if the actual costs were £1,000 a year less than ours at 1,000 miles per week the difference in the rate per mile would only be two pence per mile.

Thousands of operators and their customers take CM's Tables of Operating Costs every year. It is their guide to profitability. This is a

publication you cannot afford to miss. If you cannot afford to purchase it perhaps your haulage rates are too low!

The first edition for 1983/84 is available now. We will be happy to quote groups for bulk orders in excess of 50. Write to The Publishing Director, Commercial Motor, Quadrant House, The Quadrant, Sutton, Surrey, SM2 5AS.

Tags

People: KELVIN IL REPOR
Locations: Surrey

comments powered by Disqus