AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Charging for Tippers

17th March 1950, Page 50
17th March 1950
Page 50
Page 53
Page 54
Page 50, 17th March 1950 — Charging for Tippers
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?

on Council Work The Extent to Which Tippers Are More Expensive to Operate, and How the Higher Costs Should Be Reflected in Charges, are Shown in This Article Itcustomary to make a higher charge for he hire of tipping vehicles than for ordinary sided lorries. How much more it should be is often the subject of argument, and it will therefore serve a useful purpose if I now deal with rates for tippers on hire to local autharaies, comparing the results with those for ordinary vehicles given in the previous article. First, I will assume that I am dealing with art oil-engined machine. The initial price of rlic chassis will be £1,175. The cost of the body, including the hydraulic tipping gear, will be a further 1190. The cost of painting, lettering and finishing will be £55. The total initial cost of the new vehicle is", therefore, €1,420.

Calculating Depreciation From that total initial cost I deduct first of all the price of a set of tyres, which 1 showed last week to be £118. There is £1,302 left, but before calculating depreciation I must make an assumption concerning the amount which the operator will get for the vehicle second-hand when he sells it in six years' time. I propose to take £222 as being the amount thus obtained, and if I deduct that from i1.,302 I get £1,080 as the figure on which I must calculate depreciation. I take. six years as. being the probable life, which means that

I must allow F.180 per annum, or £3 12s, per week, al6

on account of depreciation. For interest I take 3 per cent. of £1,420, which is £42 12s. per annum, or 17s. per week.

1 can now set out the fixed charges per week in detail. First comes the tax, and as it is most unlikely that the tipping vehicle will come under the limit of three tans unladen weight, I shall take 16s. per week as the approximate amount for that. The wages will be as before, £5 12s.; garage rent, 5s.; and the insurance 16s. Interest has been calculated above as 17s., and depreciation as £3 12s. For establishment costs I take the same amount as in the previous example, that is, £2 10s. per week. The total of the above is €14 8s. per week, and for a 44-hour week that is 6s. 6d. per hour. Add 25 per cent. to that for profit, is. 8d., and I get my basic figure of 8s. 2d. per hour as the time charge for the hire of a vehicle of this type.

HigherRunning Costs

The running costs of the tipper are undoubtedly higher than those of the ordinary sided lorry,. and this is obvious in every item. This comes aboUt largely because the work which the tipper has to do is usually more arduous than that .of the sided lorry. These conditions make the vehicle more expensive as regards fuel consumption, tyres and maintenance. There is also the fact that the tipping gear is power operated, necessitating higher fuel consumption. Taking all these considerations into account, and going also upon average figures which I already have for the cost of running of vehicles of this type, I •give the running cost items and totals per mile as follows: For fuel, 15 m.p.g. at is. Ild, per gallon, 1.53d; lubricants, 0.25d; tyres, 20,000 miles per set instead of 21,500, I.42d.; and maintenance, including the extra cost of upkeep of the tipping gear, bodywork and chassis, 2,4d. The total is 5.6d.

Reasonable Profit

Add 25 per cent. to that for profit, 1.4d., and I get 7d. per mile as the amount which the operator must charge if he is to cover his eXpenses arid make a reasonable profit.

Tit the previous article I indicated that in assessing an all-in rate per hour the operator may reasonably assume an average travel of six miles for each hour during which the vehicle is engaged on .this class of work. For six miles at 7d. per mile the charge must be 3s. 6d., and the all-in rate per hour is Ss. 2d. for time plus 3s. 6d. for mileage, giving a total of us. 8d. per hour for the oil-cngined 6-ton tipper.

In the previous article I found that the appropriate charge per hodr for a sided lorry of the same type and capacity was I Is., which goes to show that the extra charge for a tipping vehicle should be approximately 6 per cent. on that charged for the non-tipper.

Before going further with this discussion I would like :to deal with one or two points which have arisen since the previous article was written. First, there is the question as to whether I should, in deducting the price of a set of tyres from the initial cost of the vehicle, take six or seven tyres as the basis. .Last week I explained that I took six tyres and not seven, because I was con cerned only with the tyres which were being worn and not the spare. Someone has raised the point that the spare tyre is not always the same one, that it is sometimes put on to a wheel and one of the other six tyres put at the back to replace it. Those who have raised this point seem to have it in mind that because the seven tyres are actually used in that way I should, therefore, revise my methods and deduct the cost of seven from the total.

I do not. agree Whatever may happen to the spare Lyre, it is never the case that more than six tyres are being worn at the same time. The tyre which is at the time being carried as a spare is doing no work and is much a part of the vehicle as the tool kit or any other component. it does not wear, but only depreciates at the

same rate as the vehicle, and its cost should there fore be included in the-amount for the calculation of depreciation..

That brings me to another point which has been put to me of late, namely, as to why, in " The Commercial Motor" Tables of Operating ,Costs I always treat depreciation as a running 'cost whereas in these articles I have taken iras h'staliding charge.

ModifiedFigures

The answer is that in the Tables I have to deal with averages and set out the information embodied in the Tables so that it shall be of the greatest use to the maximum number of people. The calculation of depreciation for a variety of weekly mileages involves, in the lower scale of mileages at least, consideration of obsolescence. In the Tables that is taken into account and the figures modified accordingly. •

In the low, weekly mileages it is preferable to take depreciation as a standing charge, chiefly for the reason that the factor of obsolescence transcends in its importance that of wear and tear. When dealing with individual .types of operation, as 1 am at present, and when they involve cornparatively low weekly mileages, I prefer to take depreciation as a stand* charge.

The foregoing figures relate to vehicles operating in a Grade II area, I will now indicate bow the rates should vary in the Case of vehicles operating in the London area and in a Grade I area. So far as London is concerned, there will be 9s, extra per Week, for wages, as for garage rent. and 4s. far insurance. Establishment costs are. almost Certain to be higher, say another 10s. per week, and the total diffeience is thus £1 8s. per week. Adding 25 per cent, to that for profit gives me a total of 35s. per week to be added to the fixed charges. That is about 94, per hour and brings our minimum charge of its. 8d.„ which applies in a Grade 11 area, to 12s. 5d. fox London.

In a Grade I area, the extre's will be 4s. per week for wages, 3s: for insurance, the same for rent, and 5s. for establishment costs, making 15s. in all Add 3s. 9d. to that for profit and we gel 18s. 9d. as the total additiOn to the figures in order to. arrive at,the weekly extra charge for a Grade I area... This is nearly 6d per hour, so that the miniMuni charge per hour in a Grade I area should be 12s. 2d.

The running costs are. unaffected -and therefore the minimum total charges per, hourshould be: in the London area„1.2s. 5d.; in a Grade-1 area, 12s, 2d.; in a Grade II area, 11s. gd. now turn to. the figuiis Which would apply in he case of operators who are concerned. with aetrol-engined tipping itehicles.

Total Diminution-, The chassis price will be £1,020, and adding £190 for bodywork and £55 for painting and lettering I get a total of £1,265. I deduct £118 for tyres and £167 Tor the residual value, which gives me a let figure' of 1980 'from which depreciation must ae calculated. That' is approximately El 5s. per ,veek, which is 7s. less than in the case of the ail-engined vehicle. Similarly, the interest will be 15s., as compared with 175.. and the total diminti:ion for fixed charges for the petrol-engined machine as compared with the oil-engined mach:ne is just 9s. per week, or approximately 21d. per hour, which means 3d. if I take the profit margin into tecount.

For the running costs I take 9 m.p.g., which a; !s, 2d. per gallon is 2.9d.•, lubricants, 0.2d.; tyres, I.42d.; maintenance, 2.58d.; total, 7 Id. per mile. If I add 25 per -cent. to that, 1.8d., I get a total al' 8.9d. as the charge per mile. On the basis of s:x miles per hour, that'is 4s. 6d. .1 have shown the hourly charge to be 3d. less, that is to say 7s. I Id: :nstead of .8s. 2d. Add 4s. 6d, tothat 'and I get. 12s. 5d. as ,the charge per hour for-a '6-ton petrolmgined tipper operating in a Grade 11 area. In

820

London the rate should be 9d. more than that. which is I3s, 2d., and in A Grade I area6d. More. I2s. Ild.

The results of the foregoing calculations and the lull differences between costs and rates are set ou. in the accompanying Tables I and II.

A feature of this class of haulage is the varielv in the sizes of vehicle used. Every load capacity from 2 tons upwards is utilized. Often in a village or small town an operator will be found who runs 2-tortners and maximum-load four-wheelers; Or even 12-ton six-wheelers, all on work for the locat authority. The 2-ton lcrries will be at work in an,1 about a village or town possibly carrying tarmac for temporary road repairs, or sundry loads for the local council. Out on the main roads an 8o! even a 12-tonner will he carting roadstone over from the station or from a local quarry to the site of a major road-mending or making job.

County Authorities

This latter work will be on behalf of the county authorities. It is for this reason that I have included with this article, in Tables III to VI. inclusive data relating to cost and appropriate charges for sided and tipping vehicles of 2-, 4-, 8and 12-ton capacities. I have assumed that the twc smaller sizes of vehicle w;11 be petrol-engined and the Others oil-engined, that usually being the case.

Some little explanation of certain of the points arising in connection with these four :tables may be of interest, and amongst these the Outstanding one is that relating to depreciation. For the smaller vehicles, of 2-ton and s'Won capacity, I have assumed a life of five years. There may be some who would criticize this period as being too lone for vehicles of that capacity, as in the' majority of cases they will n..doubt be fairly low-priced machines. and as such not subject 'usually to such extensive periods of amortization. .

My answer is that in the country districts there are two conditions which make. it practicable to keep a vehicle

running longer than would,otherwise be the case. The vehicles do not do arduous work and are not overloaded. they therefore last longer. Also, obsolescence is of no great account to country operators. S.T.R,,

9,00 s. d.

4 6 11 3 15 9

Tags

Locations: London

comments powered by Disqus