The Cost of Carrying Cars
Page 74
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What is the cost of running a car transporter, and how does the expense compare with that of the delivery of individual vehicles on trade plates? These and similar questions arise from a survey of this growing branch of road transport Which has been made by " The Commercial Motor." The first of two articles on the subject appeared last week. The second is published on pages 260-261 of this issue.
COMPARED with the operation of platform vehicles, the use of transporters for the delivery of cars is a relatively recent innovation. As a result, development is still taking place, and costs obtained by different operators may vary even more widely than where a measure of standard practice has become accepted.
Moreover, a factor peculiar to this type of operation has to be considered. In previous articles in this series I have referred to hidden subsidies in commercial-vehicle costing which can invalidate an otherwise fair comparison, For example, ownerdrivers may calculate . charges without allowance for any clerical or administrative work they may do themselves. Alternatively, the overhead costs of operating an ancillary fleet May not be segregated from .those of the main business and, as a result, may be largely, or completely ignored. In that event, the accepted total operating costs do not represent the total real costs.
Individual Delivery
A similar situation arises in the individual delivery of cars on trade plates. The accepted cost of collecting a new car from the factory and delivering it to the agents concerned, say, 100 miles away, is usually taken as the total of the driver's wages and possibly some allowance for petrol. Even, however, if the four items of standing costs remaining after allowing for driver's wages—licence duty, rent and rates, insurance, and interest----are ignored as not being applicable, all items of running cost are still incurred.
Because the distances in this country, at least, are comparatively small, any wear and tear suffered during the journey, apart from obvious accidental damage, will be almost indiscernible and .commonly ignored. Such wear and tear cannot, however, be overlooked when the operating costs of a transporter are calculated, and for this reason a comparison solely on costs would be unfair to transporter operation.
Let toe give two examples of the cost of operating transporters, both with a similar type of semi-trailer, but one with a specialist-built prime mover. and the other with a quantity 2.32 produced tractor. The lower-priced tractor, unit will cost around £1.500, whilst the specialized equipment necessary would add £1,800, giving a total cost for the tractor of £3,300. Included in the £1,800 would be the supply and fitting of hydraulic gear and transporter equipment. The special semitrailer is reckoned to cost £2,200, and would provide accommodation on upper and lower decks for up to five cars. The total cost of the outfit would, therefore, be £5,500.
The unladen weight would be 7.1 tons, allowing 3 tons 3 cwt._ for the tractor and 4 tons 12 cwt. far the semi-trailer. This would result in an annual licence duty of £125, or £2 10s. per week, calculated on the basis of a 50-week year, so as to allow for two non-revenue-earning weeks when the vehicle may be off the road for either major repair or driver's holidays.
Calculating Wages
It is general practice, when compiling operating costs both in this series and in "'The Commercial Motor Tables of Operating Costs," to use the standard rate of pay for a 44-hour week as the basis for calculating wages. This is because it would be impossible to agree on an acceptable scale of hours relative to varying Mileages, due to the wide differences in traffics •carried, and the resulting loading and unloading times.
There is, however, a compensating factor. As the whole of the standing costs are calculated on a 44-hour basis, the only item to continue beyond that period will be wages. It is, therefore, arbitrarily assumed that over 44 hours the absence of the other four items of standing cost will at least offset the cost of wages at overtime rates.
In car transp6rting, the application of standard practices would not be appropriate. As the driver of a transporter may regularly be in charge of a vehicle and load with a total value in excess of £10,000, a commensurate rate of pay is justified.
In addition, the disposition of the centres of car manufacture result in fairly high mileages for an average delivery, and correspondingly high average weekly mileages for each transporter. The combination of these two factors results in weekly wages of £20 or more being paid to drivers, and that figure will be accepted here for the calculation of operating costs.
The cost of rent or rates for garage is nominally assessed at I5s. per week. The amount paid to insurea vehicle engaged on this specialized work will largely depend on the individual operator's record and will be reckoned at £100 per year, or £2 per week.
Interest charged at a nominal rate of 3 per cent. on the.total outlay of £5,500 will amount to £3 6s. per week, giving .a (Continued on page 273)