Q Could you give me the operating costs
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for a Luton-type bodied five-tonner when averaging 600 miles a week with brief comments as to the pricing of contract hire work?
AThe total operating costs per mile as
shown in the new edition of the COMMERCIAL MOTOR Tables of Operating Costs for a five-tonner fitted with van body when averaging 600 miles a week would be 20.83d. This cost is derived from the addition of five items of standing costs and five items of running costs. But it does not include any allowance for overhead costs or profit margin which both need to be added before a charge is made to a customer.
Regarding contract hire work. if you have in mind the exclusive provision of a van to one customer then it would be prudent for you to ensure that the minimum charge payable to you would not only include the standing costs of the vehicle concerned but also some profit margin in addition to a minimum charge per mile relative to the extent the vehicle was employed by your customer. From practical experience gained in applying a particular contract, however, it may well be found that there is a minimum usage, i.e. mileage, which for administrative simplification could be included along with the minimum standing charge to avoid unnecessary calculations.
Should you wish to go further into the subject of contract hire a series of six successive articles on this subject appeared in the series Advice on Transport Problems from June 10, 1966. Back copies are available from NIP Sales and Distribution Ltd., 40 Bowling Green Lane, London, Ed, price 1 s. 11d. postage paid.