Solving the Problems of the Carrier
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IT is impossible to get away from this haulage busi ness. Even in hospital, where I am writing this article, it occurs. The patient in the bed next to mine is an officer of the Customs and Excise Department. I asked him a simple question—of inhich more later— about the working of the tax on oil, and he promptly replied, and with some asperity, that there is no tax on oil, or petrol, either. The 8d. per gallon which we do actually pay on the price of our fuel is an Excise duty. The small percentage of your income which you hand over to H.M. collector is a tax,
"How is it made impossible," I asked, "for a man who uses oil fuel for a variety of purposes, including the propulsion of commercial vehicles, to evade the payment of ' tax ' (later corrected to ' duty ') on that proportion of the oil which is consumed by his motor vehicles? "
"He couldn't possibly dodge the duty," came the uncompromising reply.
How Tax Evasion is Detected.
" Quite," I said, "but suppose I cite a concrete case. There are many Thames lightermen, for example, who also operate as road hauliers. They use oil fuel for their barges. What is to prevent them from using some of the fuel, ostensibly purchased for that nondutiable purpose, to drive their lorries, thus enabling them to compete on unfair terms with other London hauliers who cannot evade the tax?"
" The first flaw in your seemingly simple scheme," he answered, "is that duty is paid on all oil fuel."
"No, that it is not," I answered_ " Yes," he insisted. "The duty is paid on all the oil and a rebate given in respect of that which is shown to have been used for a non-dutiable purpose. Your lighterrnan-cum-haulier," he continued, "would pay duty on all the oil he purchased, obtaining the appropriate rebate on making a declaration showing the amount to which he is entitled."
• " But that's no good at all," I protested. "It is no check on his honesty. There is nothing to prevent him from loading the fuel bill for his barges with a good deal of that really debitable to his vehicles."
" Ah," he replied with a quiet smile. "He wouldn't do that for long."
"Why not? "
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"Because the precise movement of every vessel which takes goods into or out of London's docks is known-to the Customs authorities. A fairly accurate estimate of the oil fuel required for that purpose can easily be made, and if any suspicion arose an offender would be detected quite readily, to his intense discomfort."
My fellow patient went into a good deal of detail concerning this and other potential methods of evading the duty, telling me sufficient to reassure me of the absence of any risk of unfairness.
By the way, the imposition of the tax on oil fuel and the adjustment of the Road Fund schedule of taxation, however much it must be deplored in a general' way, must have brought considerable relief to some members of the excutive of the Road Haulage Association. I have in mind those who are concerned with the enormously difficult task of stabilizing haulage rates, a subject upon which several well-known members of the industry expressed their views in last week's issue.
The Oiler Creates a Problem.
It is no secret that the oil-engined vehicle presented a particularly difficult problem entirely its own, Some Operators of oilers were utilizing the advantage which their fuel economies gave them to cut the rates of com
petitors who still used petrol-engined vehicles. To expect a schedule of stabilized rates to distinguish between oiland petrol-engined vehicles is asking rather a lot. Now, with the disparity in operating costs considerably reduced, the problem is proportionately simplified.
There will always remain this difficulty of differentiating between two sets of conditions, one of which puts a competing hardier in a particularly favourable position. None of them is occasioned more frequently than by the employment of vehicles of differing capacity on the same class of haulage.
Take, for example, the haulage of tin sheets from Swansea to a point WO miles away. Two hauliers compete. One operates a maximum-load four-wheeled vehicle on which he manages to carry 71 tons. The other uses a 31-tonner on which he loads 4i tons. For simplicity, assume that neither haulier finds it worth while to look for return loads. A fair basis for calculation in connection with the small machine is, say, 5s. per hour and 4d. per mile, and for the• larger one 8s. per hour and 5id. per mile.
Allowing for such ignoring of the speed limit as is most likely to happen, the small lorry can cover the
round journey in 10 hours, and the other, allowing for the additional time necessary for loading and unloading the heavier consignment, 11 hours. The rate for the small lorry is assessed at 10 hours at 5s., which is £2 10s., plus 200 miles at 4d., equalling £3 6s. 8d. The total is £5 16s. 8d., which means that the customer must be charged at the rate of 26s. per ton. The big lorry must earn 11 hours at 6s., which is £3 6s., plus 200 miles at 50.—£4 11s. 8d. ; total, £7 17s. 8d. That is approximately 21s. per ton.
How the Load Affects the Price.
Of course, the advantage of the big lorry is lost if it be not fully loaded. So soon as the load falls to 6 tons, the two are on a level; 26s. per ton will be required by each. On this factor wise selection of capacity turns.
Another complication is brought into this matter by the differentiation in legal speeds. Substitute for the smaller of the above two examples a 4-tonner which weighs, unladen, less than 2i tons. Assume, again, that the speed limit is occasionally exceeded and, as is practically certain, that this vehicle will carry 4i tons. Its operating costs, allowing for the extra expense due to overloading, will not differ greatly from those of the other machine, but the work will certainly be completed in eight hours. The charge will thus be assessed as eight hours at 5s., which is £2, plus 200 miles, at 4d.— £3 Gs. 8d.—making a grand total of £5 6s. 8d., equal to a rate of about 23s. 6d. per ton.
The most likely upshot will be that the owner of the lightweight machine, having less at stake and carrying less responsibility, will be more ready to carry at 21s.
In the foregoint I have not touched upon yet another difficult aspect of the same problem, that of the use of the lighter form of six-wheeler, of the rigid and articulated types, and the havoc that they are creating in the rates tables.
Actually, of course, there is no better basis for any scheme of rates stabilization than The Commercial Motor Tables of Operating Costs. They give the minimum rates which each type of vehicle must earn in order to show a net profit when all expenses have been paid. Divide the rate for the vehicle by the number of tons or packages carried and the rate per ton or per package results.
I am often told that the minimum rates quoted in these articles, in my replies to queries and in the Tables, are unobtainable. When I state that I know men who are receiving better rates; I am asked to give particulars. How can I? How can I disclose opportunities of intensive rate-cutting—for that would be the immediate result of such a disclosure. Let me quote just two examples. I have in mind as my first example a haulier with fewer than six vehicles. Each is costing him less than £15 per week all told, i.e., including establishment costs and contingent expenses. Each brings in a revenue of £50 per week for most of the year and upwards of £25 per week for the rest. Shall I quote the operator's name, locality and traffic? I shall not. , £3 10s. Per Ton.
I know of another case. The haulier had fewer than six vehicles at one time, but now has many more. Some of his loads over a 200-mile route bring him in £3 I0s. per ton, and they are carried in maximum-load sixwheelers with lOads in both directions. Shall I put the rate-cutters on his track? There is no need. They are already around ike wasps about a marmalade jar.
Curiously en ugh, the men who are earning these profits are, in t eir way, just as much obstacles in the path of rates stabilization as are the rate-cutters. They are not going to be gratified by the publication of schedules which will demonstrate to their customers that the standard rate is less than that which they are paying. S.T.R.