The Tables are Queried . •
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An Operator Finds that His Expenses Do Not Tally with Those Published in "The Commercial Motor Tables of Operating Costs" : S.T.R. Examines the Differences with Him to see Whether a County Council's Rates are Profitable
WHEN an operator buys a copy of "The Commercial Motor Tables of Operating Costs," it always brings him some problems. It is almost as though he keeps his difficulties to himself most of the time, and that reading the Tables brings him to the point of writing to
me. . _. . . This was how this series of letters came about, :although I did not find out until I had gone a long way towards extricating my correspondent from the difficulties which ' were worrying him. The haulier, who must be nameless, stated that his present traffic was, in the main, sand• and gravel, Tarmac, road stone and the like, mostly over short distances. He sent me some notes about the rates which the local county council were offering.
From the schedule he sent me I have picked out the following items: Dry stone, hand filled, .up to and including 3 miles lead, 2s. 6d. per ton; Tarmac, hand filled, up to and including 3 miles, 3s. per ton; any material, chute filled, Is. 9d. per ton. For each additional mile lead,-44. per ton per mile or Id. per ton per i mile. These prices to be subject to a reduction of 5 per cent. for loads in excess.of 5 tons.
He asked me what I thought about the rates. I. 'wrote asking for additional information and asked what size of vehicle he was using on the job, Whether the driver had a mate, and how long it took to load and unload the hand; filled dry stone. The reply covered all my points and some others which I had not thought of when I wrote the letter.
The vehicles working on the job were 5-ton tippers. A mate waS always sent out with each load. The reply to the query about time needed for loading and unloading brought in a lot of information. If the stone was easy to reach, the 5 tons could be loaded in I hr. Often rather longer time would be necessary, especially if the stone was not so easy. to reach. It could rarely be the case that 1 hr. would be needed. To unload required 20 min. : Taking an average of 40 min. for loading and 20 min. for unloading. makes it
I hr. for the two terminals. .
Time for Round Trip
Travelling time was at the rate of 15 m.p.h., so that for a 3-mile lead, which he asked me to treat as a minimum, the travelling time would, be 24 min. (That is for 6 miles, three each way.) The total time for one round trip would seem to be 1 hr. 24 min. At . this:stage I realized that I needed some more information and, to save time, asked him if he could call to see me. He was agreeable, and when he arrived we really got down to the job.'
First First of all, I asked him why he stressed the 3-mile lead. He answered that 3 miles was the average for the job he was considering. He wanted specific information as to the rates for that distance. With that ,information before him he thought he could judgeL-I gathered he meant " guess " —the rates for other leads.
I let him hold that belief for the Ore being, and went on to discuss the data required for establishing a profitable rate
for carrying 5-ton loads' over a 3-mile lead., _ .
"1 should think we have all the information we need to specify a rate for 3 miles," I said. .," It looks to me as,though: we have all that is necessary to justify us in taking six loads per day as the basis for calculating the rate. Taking a 9-hr. day; I am going to assume that each journey actually takes lihr., unless you have any objection."
"That would be satisfactory," he replied, "if we could, on every occasion, get straight away to the railway wai and start loading. Actually that is not always the cm quite often our lorries have to await their turns and delay might well be 10 min. or I hr."
"Is 1 hr. a fair average or can it be less?" I asked. '`T; it as average," he replied. "There are occasions when delay is more than that, even as much as 30 min., althot I will admit that it is very seldom that it is so much."
"If we do that we can take the average time as be 11 hr. or thereabouts. Can you do six journeys per day that?'' "No, we couldn't do six loads a day on a 3-mile lead. was when you mentioned six loads per day that I reme bered the delays at the railway wagons and recalled, al delays at the unloading end of the journey. They may be prolonged, or unduly frequent, but they are enough make it impossible to work to a regular timetable."
"Then we shall have to take five loads per day: ti means that, taking the time for a round journey at 11 I the working day would be not less than 81 hr. Would y be able to keep that up for several days in succession—. a week say? "
Averaging Work " am not sure. I doubt if we should have enough tea to one delivery point to keep us going for a week on ti lead alone, but we might fairly average it out."
"Very well, I'll take it that your week's work is 1 equivalent of ,five days, carrying .five loads per day on 3-mile lead, averaging 12. hr. for each round trip. On ti basis you run Only 150 miles per week. Your cost, acco. ins to the Tables, is 116. 2S. 10d per week."
"Here now," he interrupted, "where do you get tl from? If rid knoWn *tit, I shouldn't have needed to troul you. I had got is far as reckoning on 150 miles per we but when looked at the Tables I could not find 1 information I wanted."
' (If the reader will be so kind as to turn to Table 1.1 that publication he will at once understand where the troul lies. There is no provision for the costs at 150 miles week: the figures start at 200. The explanation I gave my friend may be of use to others and I repeat it now.) •
"The way to -tackle the .problem is this," I said to hi " Take first of all the standing charges for a 5-tonner. Th are given as £8 12s, lad, It is the, running costs that the trouble. They should be a little more than those 200 Miles, which are given in the Tables as 11.30d. mile. It will be sufficiently accurate to take Is. per mil(
• ." How do you arrive at that?"
" By guesswork, alfribst," replied. iThe difference because the item Maintenance (d),' which is a fixed amou that rises with the fall in Weekly :mileage. If, therefore, take it that 0.80d., the appropriate amount for 200 miles r week, 'is reasonably correct, that for 100 would be. 1.6( and for 150 miles the average of those two, 1.20d. Ti means that wemust add the difference, between the amou for 200 miles and that for 150 miles per week to the to' of running costs.. Thal, 'difference is 0.40d, and the. ni figure for running costs becomes, on that account, 11.7 The balance stillunaccounted for, which comes from t adjustment of the depreciation charge, another 0.30d., niak the total Is., as stated above.
"The running cost for 150 miles is thus £7 10s. per we :hat to the standing charges, £8 12s. 10d., and we get tal cost per week as £16 2s. 10d.
should allow, for these calculations, enough to provide Burances and holidays with pay; that wilL be about: )er week, so that although the driver's actual pay is et regulation amount of £6, we must reckon it to be 2s. per week. We must add that amount to the 2s, 10d., already agreed, making the weekly cost 4s. 10d. Do you agree?"
es, but that is not all the cost, is it? "
.o, there are still the establishment costs, which I shall Le to. be £3 per vehicle per week. That makes the total ier week to be £25 14s. 10d., which I shall take to be is."
hat should be the lot" he said.
he next thing to do is to check that against the local il's offer, and see how we stand. Let me take these s as being correct for the time being and see how you aing to make a.profit out of the work supposing you o do it at the rates offered. During one week you have d 25 loads of 5 tons each; that is 125 tons and the cost u is £25 15s. The cost per ton is 4s, Id,"
Comparative Figures 3 that 1 should not even cover my expenses?"
+a,' 1 replied, "that is, unless the criticism you have of ables affects the figures by driving them downwards." don't think that is what I have at the back of my " he said. "My trouble is that the actual figures in shies don't lie well with mine. I have brought some ne along for comparison. Take, for example, petrol. igure in the Tables is 4,50d. per mile. Now, on this distance work my vehicles average 9 m.p.g. and as I 2d. for my petrol the cost per mile works out at or thereabouts."
hen, there's oil. 1 put about I pt. of oil in the engine, cally every morning, say gat. a week. There's I gal. very 300 miles, and I pay 8s. per gal. for it which is er mile instead of id., as the figures in the Tables ,s regards tyres, I disagree with your figures, but in GUY OTTER 6-ton chassis with Gardner 4LK oil :ngine and Eaton two-speed axle' forms the basis of a le bank which is to be shipped to India for the Bank dials.. The bodywork and driver's cab were built by lands, Ltd., Park Royal, London, N.W.10, ielled externally in 7-mm, armour plate, the body is :lively shaped at the sides and rear, The frame is of I-steel sections. The swept roof, which is of 14-gauge steel, is panelled in 3-mm, armour plate. Sides and are insulated with glass fibre and lined with aluminium.
o bullet-proof windows are provided on each side, :t..-diameter hole cut into each being protected on the by an armour-plated hinged flap. The single window rear door is also fitted with bullet-proof glass. the other direction. My tyres are 36 by 7 and cost me £110 per set. I find I am getting 24,000 miles per set which is equivalent to It per mile as against your figure of 1.33d."
"I'm not sure about the other items of running costs. I'll not criticize your figures about maintenance: I don't accept them but I have no concrete evidence that they are wrong. I am running three of these 5-tonners but although I have some figures I have not tried to do what you so frequently recommend, that is, keep separate figures for each machine. I daresay you are about right in your Tables, because I seem to he always putting my hand in my pocket nowadays."
Rough Work "I must admit that the machines are old and the work they have to do is rough. One figure about which I definitely need guidance is depreciation. I see you quote 2.84-d. per mile for a 5-tormer. How should I go about checking that figure in its relationship to my vehicles? " he asked.
"In the first place," I answered, "I take the basic cost of the vehicle when new. Have you any idea what that is?" "Just over 11,000. The actual amount was £1,060."
I continued: "1 take that figure of .11,060 as a starting point. Then I deduct the cost of a set of tyres, £110, leaving £950. From that I deduct what is called the residual value of the vehicle, which I shall assume in this case to be 175. I am left with £875 as the net value on which I assess the depreciation, now seen to be 2.10d. per mile, allowing a life of 100,000 miles. That is the lowest figure for depreciation of this typeof. vehicle. It assumes a minimum annual mileage of 20,000.
"If that mileage is not reached, there must be an addition to the depreciation figure to allow for obsolescence, that means an allowance for the vehicle growing old and out of date. That is why the depreciation in the case of this vehicle rises to 2.45d. for 300 miles per week and 2.84d. for 200 miles per week. The increase is at the rate of 171-; per cent. for each 2,000 miles per annum less than the basic 20,000."
S. T. R. (To be continued)