Q We operate several new Safford lorries — 8 tons payload
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— and I would like to know what you estimate our current total operating cost per mile should be.
We cover 800 /1000 miles per week, and the net weight of our loads average between 6 tons and 7 tons. Fuel consumption is averaging 12 mpg (ie fully loaded and tuning empty) with the Bedford 330 diesel engine. Is this not somewhat heavy?
A It is difficult to be precise about the total operating costs which the operation of your vehicle might incur without knowing more details such as the price you paid for the vehicle, the wages you pay your driver, the insurance premium which you pay, and the depreciation life you apply and the price you pay for fuel.
However, the following data has been assumed in the table compiled. Price of the vehicle estimated at £2500; insurance at £100 a year; wages at £33 a week; interest on capital at 9 per cent and maintenance at 2.50p a mile based on the whole life of the vehicle. In this last factor, it is appreciated that the vehicles are new and a certain amount of work might still be done under warranty. However, as already stated the estimated maintenance figure is based over the whole of the 150,000-mile estimated life of the vehicle for depreciation purposes. Price of fuel has been estimated at 32p a gallon.
With the information supplied by you and the estimated figures, about 12.50p a mile is considered a reasonable figure for total operating cost made up as follows:— Standing cost
per week Licence (road fund) 3.00 Wages 33.00 Rent and rates 2.50 Insurance 2.22 Interest on capital 5.00 Depreciation is based on the whole cost of the vehicle (£2500) less the cost .of a set of tyres (say £350) and 10 per cent of the original cost (£250) to represent residual value. The total operating cost then becomes the weekly standing cost (£45.72) divided by the weekly mileage (1000) which equals 4.57p plus the running cost per mile (7.93) which gives a total operating cost of 12.50p a mile.
Where the figures used do not coincide with those actually incurred you should substitute the true figures and recalculate.
As far as fuel consumption is concerned 12 mpg seems to be a reasonable fuel consumption for the vehicle you operate
Commercial Motor Tables of Operating Costs are published each year and the 1972 edition is still available price 70p from Sundry Sales Department, IPC Business Press (Sales and Distribution) Ltd, 40 Bowling Green Lane, London, EC IR ONE.