HINTS FOR HAULIERS.
Page 24
If you've noticed an error in this article please click here to report it so we can fix it.
An Occasional Chat on Subjects and Problems of Interest to those Who are Engaged or About to be Engaged, in Running Commercial Vehicles for a Living.
IHAVE been examining, with a considerable amount of interest, the recently issued prospectus of the Samuelson Transport Co., and I dare wager that the majority of my readers have been equally attentive to that publication. My idea in studying the thing was to find out how nearly Mr. Samuelson agrees with me in respect of the running; costs and the fair charges for motor coaches. Generally, it appears, he agrees very closely. As regards the 27-seater coach, for example-but we will start a new paragraph.
On the question of revenue, he calculates on a 720-mile week. According to our method of reckoning, this should bring in a minimum return of 230 for the week and 720 times is 4d. for the mileage. Total, 278. In the prospectus an average return fare of 15s. per passenger is taken and an average of 25 per cent. vacant seats. Total revenue per week, 291 2s. 6d. Personally, I usually reckon on a probable deficiency of 33 per cent. on the seating capacity, at which rate the revenue would be 280, a figure which would still return a profit.
The running costs are not easy to compare, as the method of computing them is different from that usually adopted. Depreciation, for example, is considered separately, and the amount allowed for it is ccnsiderably in excess of what is likely to occur in practice. Roughly, allowing for standing chaigee (but not driver's wages) to be equal to running costs, Mr. Samuelson calculates that the working costs of a 27-seater should be is. Bid. per mile. Our running costs for a. machine of that size' according to the latest figures, are 9-lad., so that we agree exactly. Considering these costs more in detail, our tables give us, for each mile, reckoning 720 miles per week:-Wages, 25; petrol, 29 is. 2d. ; oil, 22 Os. 2d. ; and tyres, 24 16s. ; total, 220 17s. 4d. The prospectus allows 227 15s., and, deducting 23 for the recent drop in (petrel, which is not taken into consideration in the figures given in the prospectus, the result, 2.24 155., is seen to be ample.
Standing charges are even more difficult to compare, because, in the publication which we are considering, establishment and administration charges are lumped together with those for the vehicles. Our calculations would give £6 lls. 8d. for management expenses, 21 7s. 6d. for licences, 17s. for insurances, and 12s. for garage; total, 29 8s. 2d. Repairs and maintenance charges are, however, included in the standing charges as given in this prospectus, and these would account for another 26 a week, bringing the total up to £15 8a. 2d. ; but, even so, we are a long way below Mr. Samuelson's figure, which is 227 a week. The presum,ption is that he has deliberately erred on the safe side in making hie estimate.
An Optimistic Correspondent.
Now, a correspondent who wiites to me this week On the subject of starting in. a small way might take a leaf out of Mr. Samuelson's book and err on the canny side in making his calculations. He is thinking of buying a lorry on the hire-purchase system. With that I have no fault to find, nar has the great Samuelson ; he has done the same, although on a somewhat larger scale. Our friend-or I should say my friend-then reckons up his running costs as follow, for a 300-mile week :-Petrol, 50 gallons (6 m.p.g.), £7 !Os.; lubricants, 3 gallons engine oil, RI 4s., 1 gallon gear oil, 8s., and 7 lb. grease, 7s. ; garage, 21 a week ; depreciation, 21 10s. ; tax, 12s.; insurance, 21; wages (self and youth), 27.10s. ; payment for lorry, 26-all per week. Total, 227 la.
. c28
Now, the above figures, although they total up t( something which is not, alter all, very far out o. what may be expected, are nevertheless so inaccurate in detail as to call for correction. Petrol for a lorr3 of this size-it is a 4-tonner-should not cost mort than 24 6s. for 300 miles. Lubricants altogethel should not run the owner into Li-according to ow scl.edule of running costs, the actual figure shoulc be 19s. 3d. A pound a week is too much for garage unless there. are some special services rendered, am for those, in a one-man business, there should be n( call. If our friend looks round for a shed or othei simple building, he should not need to pay mar( than, at the outside, 12s. 6d. per week. As regard: depreciation, however, my correspondent is on di( low side ; he should allow 22 lls. 9d. for this item The tax-12s.-leaves no room for criticism; but, a: regards insurance, half of what is allowed shout( be sufficient. The remaining two items are at tin discretion of the correspondent, and may not lin corrected here. The total is 228 6s. 6d.
However (and now we approach the crucial point) our friend has the offer of a, regular contract of 301 miles per week, for which he is to be paid 28. pei mile; total, 230 per week. He wants to know i that is enough. It will be observed that, even or my calculation, this contract shows a profit o 21 13s. 6d. per week, and it might well be that, te a man of simple tastes, this return,. together witl the wage which he has allocated to himself, will bi sufficient for a couple of years, by which time th$ lorry will be paid for and a further £6 per weel be available. There is, however, a considerable risk and it is for my correspondent carefully to conside: that risk, and then take it or not.
Much, but not all, depends on whether the eontrac is likely to be a really lasting one or not. Let la first assume that it is. In that case, the risk t( be considered is that of a breakdown of the lorry Since our friend's client has been willing to piaci a firm contract, he will be perfectly justified mm insisting on its being carried out. Therefore, in th, event of a breakdown to the lorry, it will be neces sary for the contractor to find a substitute. Theis is no margin in his figures of costs for such a con tiegeney, If he has to hire another lorry, he ma' very well have to pay 2s. 6d, a mile for it, so that besides lotting all his own wages and besides havim to find the 26 a week for the hire purchase of hi machine and the wages of his youth, he will la losing 6d. a mile for every mile the lorry runs.
In the event of the contract not being necessaril; a firm one, if there is the chance of his client ehang ing his mind about it in a month or so, then it wil be necessary to be on the look-out for other work a well. It is practically impossible to do this and a drive a lorry as well, so that tire 'beginnings of al office staff are required, which will very quick!: swallow up the El 13s. 6c1., and: more besides.
Those are the risks; they are not inconsiderable and, personally, I should not take them. The prope thing to do is to make a fair charge for the work The charge should be, for a 300-mile week, at leas 2s. 4d, per mile, and 2s. 6d. if it can be obtained Even with 2s, 4.a. there is an additional margin o 25 a week to set aside to enable the owner to tid over any of the troubles to which I have referred If the troubles do not come, all the better ; but i will be no use bewailing his fate if they do and h has no money to meet his liabilities. That hag bee: the fate of many an " undercutting " haulier.
THE SXOTC11.