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BULK HAULAGE— Who Saves knd Who Pays?
Page 124
Page 125
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Potential Economies of Delivery in Bulk May be Limited to the Customer Increased Operating Costs Can be Reduced by Dualpurpose Vehicles, So Long as Their Employment is Practicable
INEVITABLY when new projects and developments are being considered, the man whose job it is to inquire, "Who pays for all this?" is apt to be looked upon as a reactionary. Yet in fact the long-term development of delivery in bulk may well be determined by the _factors on which a satisfactory
answer to such a question are based. As with any other development, its wrong application in the early stages could well prejudice its real and ultimate worth.
In many of the more established forms of hulk delivery, the initial move may well have been made by the haulier in his own interest to increase overall efficiency. Alternatively, it may have been of benefit to both operator and customer. Today, however, many of the requests for delivery in bulk come from the customer and are inspired not by the possible reductions in transport costs but by a cut in overall distribution costs.
As a result, if the haulier is not only to enter into bulk delivery, but also to continue to be familiar with all aspects of the traffic he carries, he must have some knowledge of his customers' manufacturing processes. For example, it is„ vital that the traffic manager of a bulk-liquid carrier should have precise knowledge of the nature of the liquids he carries.
Modern Trends
It is modern trends in trade and industry which are tending to increase the need for bulk delivery. 'T.fhe many groupings and associations of companies, which have taken place since the war, have often resulted in a policy of specialization of one process of manufacture at one, establishment. This requires transport of the semi-processed 'commodity to another factory for a further stage in its manufacture. In these circumstances, waste of labour and material in temporary packaging would be totally unacceptable.
It is important that the professional haulier should carefully weigh the cost of this new form of service and base his charges accordingly. The problem has been studied in great detail during the past few years and it is interesting to note the comments of a trade association.
Considering rail rates, they realized that bulk traffic would require specialized wagons which must return empty. Because there would be no saving in the cost of working, there could be no prospect of cheap rates. Any economies, they decided, would accrue to the sender and consignee, and not to the railway, all of which is equally pertinent to the road operator. The saving in cost to the sender could include the complete elimination of labour and material in the manufacture and preparation of traditional packages, and, further along the line, in their handling and filling and subsequent loading on to vehicles. There might also be a reduction in the storage space required.
The provider of the vehicle could at best hope for reduction in the time required to load and unload. Loading and unloading time, however, is often only a small proportion of total terminal time.
Unloading Rate
Another factor which has a bearing on the overall profitability of bulk delivery vehicles is the rate at which the commodity is supplied to the loading poinr, and removed when unloaded. Ivlost of the points at which hauliers. collect and deliver are still sited on comparatively old premises. Where alterations have been made to accommodate delivery in bulk, this may consist only of the construction of a hopper into which the load_ is discharged.
The rate at which it is removed from the hopper may often remain the same as with former methods of delivery. This is because the manufacturer may have found that to speed up the present internal conveyor system could not conveniently and economically be carried out until major factory alterations were contemplated. The immediate result to the haulier, however, would be that only the first bulk delivery of the day• could be ensured of a rapid turn-round. Subsequently, drivers might well have to wait while the hopper was emptied before dropping their own loads. A survey in one industry revealed that at more than half the premises the rate of .clearance was less than 20 tons per hour.
The design of an ideal bulk vehicle is often hampered by archways, 'overhead steam pipes and the like in old premises, which obstruct the approaches to loading and delivery points. In another survey, a third of the approaches was shown to be not more than 7 ft. 6 in. wide and under 16 ft. high.
Development of the bulk delivery of liquids will depend largely on the expansion of 'the industries already served, With solids or semi-solids, however, it is only of recent years that some of the commodities have been transported in • bulk. Because' traffic of this nature provides a much greater annual tonnage than liquids, it would seem to offer a greater potential
field for development in bulk delivery. If trade and industry require it, the haulier will provide it, but both parties should be in no doubt as to both the savings and the additions in expense compared with former methods.
Terminal facilities, for example, under conditions of bulk . delivery become almost as much the concern of the professional haulier as of the customer, although only the latter has direct control over them. The ancillary user is better placed, in that, for inter-factory or department transhipment, he will obviously be in control of both terminal facilities. Where, however, he himself is making delivery to a customer, his terminal services and those of the customer.must be co-ordinated before an efficient bulk delivery system can be instituted.
Terminal Facilities
It is most important that not only the underlying reasons for the need for bulk delivery should be fully understood, but, in addition, the position regarding terminal facilities. Only then can the problem of vehicle selection and assessment of probable operating costs be tackled. I propose to consider the factors underlying the choice of vehicles where only the loading point is under the operator's control.
• In a case in question, the operator was making .deliveries at distances varying from 100-200 miles, whilst the customary load consisted of 7-1 tons. As the deliveries had previously consisted of sack loads on platform lorries, bulk delivery inevitably meant higher transport costs, and the problem was• to restrict the increase to a minimum.
The first step was to attempt to widen the purpose for which the proposed vehicle might be used. Because of the possibility of contamination, bulk backloads, even where available, would not be practicable. Therefore, unless sacks or bags could be carried as well as bulk loads, the vehicle would be limited to outward deliveries.
Whilst this might be acceptable where such a vehicle was making several trips per. day and taking full advantageof quicker turn-round, the contribution towards reduced operating costs would be negligible where, on average, only one delivery per alternate day was being made. For the same .reason, simplicity in the method of discharge would also be imperative, as it would be totally uneconomic to carry expensive and weighty equipment for occasional use.
These two factors largely determined that the vehicle would require a dual-purpose tipping body. A perforated floor would permit discharge in bulk through two chutes at the rear when tipped. Alternatively, it could be discharged by gravity through a hopper between the chassis members when terminal facilities allowed, In addition, the bulk container was to be fitted with twin doors at the rear, with special preparations for adequate sealing. As a result it would also be possible to load with sacks in the normal manner if sufficient height were made available.
Having decided the type of body and discharge, it was possible to considec the choice of chassis, primarily between the mediumor heavy-weight vehicles. The dual-purpose bulk body under consideration was estimated to weigh approximately 15 cwt. and tipping gear just over 4 cwt., both weights being standard whichever chassis was chosen. With a medium-weight chassis of around 21 tons, and allowing another 4 cwt. for fuel, oil and water, these four items would give a total kerb weight of 3 tons 18 cwt. As the tinanufacturers' recommended gross weight was 10 tons 4 cwt., a payload of approximately 6 tons 6 cwt. was possible.
For the heavier model, the chassis weight was 3 tons 19 cwt., whilst, fuel, oil and water were a little heavier at 6 cwt., and with the other two items remaining the 'same, the total kerb weight in this instance was 5 tons 4 cwt. But as the manufacturers' recommended maximum gross weight was 14 tons, the permitted payload was 8 tons 16 cwt. Apart from the advantage of this increase in payload of 24 tons, because the customary load in the` trade was a minimum of 71 tons, it was not possible to entertain the medium-weight chassis.
There remained to be considered the comparison of operating costs of the heavier chassis when fitted with a bulk body and with a standard platform. In both cases the chassis price, including purchase tax, was approximately £2,800, whilst a further £500 was added for the cab, platform body and painting, making a total of £3,300. The unladen weight was 4 tons 8 cwt.
The total price for the bulk wagon was £4,200. This was made up of £2,800 for the chassis, £150 for the tipping gear and £1,250 for the special dual-purpose light-alloy body, including painting. The total unladen weight was 4 tons 18 cwt.
Standing costs per week for the platform vehicle would be: Licences, £1 4s.; wages, £8 18s. 7d.; rent and rates, 10s.; insurance, £1 5s.; and interest, fl 17s. 7d., giving a weekly total of £13 15s. 2d. Running costs per mile would be: Fuel, 3.38d. (based on 14.5 m.p.g. at 4s. id. per gal); lubricants. 0.26d., and tyres, 1.51d. The tyre cost is based on an estimated life of 40,000 miles. Maintenance is calculated at 2.42d. and depreciation at 2.65d. per mile. Depreciation is computed by deducting from the cost price of the vehicle the cost of an initial set of tyres plus residual value based on 10 per cent, of the first cost, the balance being divided by an estimated vehicle mileage life of 240,000. Total running costs amount to 10.22d. per mile.
It was mentioned earlier that deliveries varied between IOU and 200 miles. Assum:ng an average of 150 miles, six days per week, the weekly mileage would be 900. Standing costs per mile would amount to 3.67d., giving a total operating cost per mile of 13.89d.
Insurance Premium
Because of the higher unladen weight of the bulk delivery
vehicle, licences would cost £1 8s. per week, whilst wages and rent and rates would remain the same. Insurance premium would also be higher, because of the increased cost of the vehicle and would amount to 13s. 10d. per week. Likewise interest would be increased to £2 10s. 5d., giving a total weekly standing cost of £15 Os. 10d., or 4.01d. per mile, again assuming a 900-mile week.
Fuel costs were expected to be fractionally higher at 3.50d.,
but costs for lubricants and tyres were assumed to remain unchanged. Because of the tipping gear and special body, however, maintenance costs would be higher and were estimated at 3.63d. per mile. Depreciation was dealt with as before, but because of the higher initial cost, it amounted to 3.06d. per mile. Incidentally, as the resale value of a specialized vehicle is reasonably expected to be less than that of a popular platform vehicle, some allowance has been made for this factor in depreciation calculations. Total running costs per, mile amount to 11.96d., which, added to the standing costs, gives a total operating cost of 15.97d. per mile, or 2.08d. per mile more than for the platform vehicle.
In addition to the higher operating costs, despite the fitting of a dual-purpose body, it may well be that in operation, because of limiting factors such as low archways, or local dock customs, a platform lorry could sometimes obtain a return load which would not be available to a dual-purpose vehicle. Therefore, in assessing its comparative overall efficiency, although the dual-purpose vehicle does provide a compromise, it would be reasonable to assume that the annual tonnage carried in similar circumstances would probably be less on the dual-purpose vehicle than was formerly carried on the platform lorry.
When, however, a platform vehicle is operated, at least two sheets normally have to be provided (and subsequently maintained) as standard equipment, necessitating an initial expense per vehicle of about £50, plus probably half that amount annually on replacements. Such expense would, of course, be eliminated by the use of a bulk wagon.—S.B.