PROBLEMS OF THE HAULIER AND CARRIER.
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Compiling Private Operating Costs to Obtain Accurate Costing, and Using for that Purpose "The Commercial Motor's" Tables.
UROM time to time this journal publishes operating costs tables for the benefit of commercial motor users in general. This week I want to deal with their application in practice and to issue a warning in view of a tendency which -is noticeable in many letters that I receive from hauliers and carriers in a small way of business.
This tendency is to accept the tables as definite in individual eases without previously comparing the figures one by one with those which are the result of personal investigation. It is very easy to adopt the tables without thought, but such an action is not in the best interests of any man. The tables are intended to serve as a guide, not as a hard-and-fast set of figures which are to be applied indiscriminately to every set of circumstances. R would be as reasonable to say that a standard size and shape of boot must be adopted for everybody—man or boy, large or small. The proper course is to arrive at one's own set of figures as recorded by the office books, and then to compare them with the tables item by item, reasoning out any variation until one is satisfied that the discrepancies are favourable, or, if adverse, properly accounted for. The tables are compiled from average results supplied by many users, but there is no reason why operating costs should not he lower or higher in the light of special circumstances.
The Effect on Cost of a Long Spell of Lowgear Travel.
Dealing now with instances which have occurred in my experience in .the course of correspondence with many motor vehicle users, I once accumulated quite a bulky letter file as a result of a series of queries and replies concerning the business of one who has set up as a general haulier. He found that his profit was too small, although his charges were up to the scale suggested in the "Hauliers' Figures" section of the tables. It transpired that the job about which he complained involved hauling two tons at a time of loose seashore sand for two miles on the beach and then two miles on the main road. As first gear was in use for the first two miles of each loaded trip, the fuel and oil consumptions were about double the normal and the maintenance bill was high, partly on account of the long periods of "all out" work and partly because of the wear and tear consequent upon the water dripping from the body on to the chassis parts.
Ignoring these factors made a big difference. Obviously, the tables cannot be made sufficiently elastic to cope with such exceptional cases and a little personal calculation soon revealed that his charges should have been at least 30 per cent, higher than the average.
Bad Roads Mean Big Tyre Bills.
Bad roads must he taken into account when they are enceuntered to an appreciable extent on any particular tlansport job. It must be remembered that the costly consequences of such surfaces, in the shape of big tyre bills, will not be noticeable at once, as, in most cases, the renewals will have to be effected when the work is over and paid for—too late to obtain recompense. The tables show figures representing wear consequent upon ordinary roads, not that arising from the use of cart tracks or paths to quarries.
Pitfalls for the unwary lie in the question of maintenance. Take, for example, a lorry or van the duty of which is partly transport and partly publicity—quite a common combination to-day. The ordinary vehicle can carry on for many a long day with a bent wing and scratched body, but, where effect has to be con c38 sidered, the damage must be put right promptly, with the result that the coachbuilder's and signwriter's accounts increase; hence a bigger maintenance bill. The circumstances of this case do not accord with those of an average character, hence a haulier running such a vehicle on contract must increase his maintenance allowance well above that embodied in the tables so as td cover himself adequately.
Depreciation is, fortunately for commercial motor owners, not so dependent upon that fickle jade, Fashion, but where bodywork is somewhat out of the ordinary, as in the case of a " toast-rack " bus used for seaside promenade work, the re-sale market is limited and average depreciation figures, therefore, do not fairly represent the loss per mile.
The Effect of Wage Divergencies.
Licences are stable items, so far as anything depending on political matters can be stable, but wages vary in different districts, according to local labour agreements or private arrangements. It must not be overlooked that where relief men are employed for vehicles such as buses, the standing charges of each machine must include the full costs of the drivers' labour. Again, overtime may be incurred, lodging expenses may result from a man being away for a night and bonuses may be paid. Where these items occur they must be added to the figures in our tables.
Rent and rates for garages are presumed to be those obtaining in normal areas in which the average haulier and carrier would pitch his headquarters. Where business dictates that room for one's transport vehicles mustebe found in a more costly residential area, the garage bill will be a good deal higher and the figures given in the tables will not be adequate.
By reason of the existence of special risks, insurance premiums are often higher than the normal. In certain districts the highest premium rate is charged, whereas a competitor a few miles away may be charged several pounds a year less because he runs in a less congested area. Each must divide his annual cost under this heading by 50 (we take 50 weeks as the average working period for each year) and substitute the result for the figure quoted in the table which applies to the class of vehicle in question.
Interest figures may vary considerably, as two vehicles of the same load capacity may differ in first cost by so much as 100 per cent., and, in consequence, the weekly interest allowance must be adjusted accordingly. Where extra fittings, such as tipping bodies and electric lighting systems, are specified, these must be taken into account, as the interest should be calculated on the original capital outlay of the owner with regard to the particular machine. The purchase price complete is that which counts as a basis.
Having used The Commercial Motor tables as a form or guide and compiled one's own Operating costs from actual personal data, it is quite an easy job to add on the establishment expenses and profit allowances prior to working out the required charge per mile or per hour. Where items are missing—for example, say, the vehicle is new and no tyre records are available—the figures in the tables may be used. If, however, the owner has reason to believe that circumstances will be against so good a result, he mast increase the allowance according to his valuation of the additional risk.
By all means get your copy of‘the tables and make the utmost of them, but do not regard them as a substitute for personal record work—there is no such thing. The tables are a means to an end, not an
end in themselves. S.T.R.