Problems of the
Page 73
Page 74
If you've noticed an error in this article please click here to report it so we can fix it.
HAULIER and CARRIER IT is easy to receive wrong impressions and it is unfortunate, too, that if the conception be allowed to stay opportunities for gain and for business may, as a result, be overlooked, A steam wagon with a capacity of 12 tons may not seem to be everybody's vehicle. Probably it is not, but it has its uses for a good many more than even I used to think, and I rather pride myself on my knowledge of motor haulage and on my appreciation of the capacity and scope, in that business, for steam wagons. .
In the course of advising hauliers in all sorts Of matters relating to their business, by letter and in person, the question of the 12-ton six-wheeled steam wagon has recently twice come up for discussion, and on both occasions the haulage contractor whom I was interviewing was impressed, and, what is at the moment more in my mind, was surprised at the success attending the use of these large vehicles. Neither of the stories takes long to tell, and they are both of interest in relation to the subject that I have in mind—namely, the value of the six-wheeled steam wagon as a vehicle for making profit for haulage contractors.
The Value of the Large-capacity Vehicle.
The first incident arose when I was discussing with a south-eastern-counties haulage contractor the problem of haulage of coal and of road materials {it is worthy of note, by the way, that in both eases the subject came up for discussion in semi-rural areas, where the expectation of being able to use heavy wagons profitably would have seemed least likely). This contractor used 4-ton petrol lorries for his work and had, the day before my visit, been astonished to see a competing contractor on the same ground pick up and take away in one lot 12 tons of road material. "He was away with his 12 tons and back again for another load," he said to me, "before I could get rid of my four tons, and he obtains the same 'price per ton as I do."
The other story concerns a west-country haulage contractor, whose business was chiefly that of carting building and road-making materials. He, too, was in the habit of using 4-ton petrol lorries, but had been persuaded to buy a 12-ton six-wheeled steam wagon. As a result he was able to transport his sand and gravel in 12-ton lots instead of in 4-ton loads, and is now making a reasonable profit, whereas before the work hardly brought him in "change for a shilling."
How that can happen is the real theme of this article, but before going into it I want to point out the moral of these two stories—namely, that these large and somewhat expensive vehicles are not confined in their utility to contractors in extensive fields, who have big loads to cart for long distances. They are equally useful, and, moreover, profitable for work which is restricted to narrow areas.
Financial Considerations.
The one argument that appeals most to any business man to-day and to haulage contractors no less than any other is that of £ s. d. He is going to listen attentively to, or read carefully, any statement that purports to show him how his profit may be increased.
The fact, as disclosed in the second of the foregoing stories, that the use of a 12-ton steam wagon instead of smaller units makes profit where there was none before should need little explanation; the exclamation of the haulage contractor, as quoted in the first story, points the way to that. It is the capacity to move 12 tons of material in the same period and with hardly any more expense than is needed for four tons. The statement becomes more acceptable, however, if the figures showing the potential increase in profit be disclosed.
• It will be sufficient to be going on with if the cont parative cost of operation of the two types be given in relation to the loads they carry. First to consider the fixed charges, those that are, so to speak, inevitable and which are caused on account of ownership of the machine. The principal one is that of first cost, and that appears on the balance sheet in company with depreciation as a fixed charge. There are the wages of the driver and his mate, insurance, licence and the expense of garaging. These are what I like to call first charges. After them einne the running costsfuel, lubricants, tyres and maintenance.
• Where Hauliers Err in Considering Costs.
Incidentally (this is in some senses a warning), there are some haulage contractors whose ideas of cost of operation get no further than the four items of running cost which have jUst been enumerated.
However, to get down to an estimate of comparative profits, it is necessary to know just what the figures are. Take the steam wagon first and assume that the initial cost of a rigid six-wheeler with side-tipping body is £1.200. Subtract the cost of a set of tyresnamely, £150-and calculate interest at 6 per cent, on the balance (£1,050). This results in a total of £63 per annum.
If the depreciation account be met by a sinking fund, and if the life of the vehicle be taken as 10 years, the amount on which interest is to be calculated will accordingly be decreased by £105 per annum, and the average figure for interest throughout the period of 10 years will be £31 10s. The total of interest and depreciation is, therefore, £136 10s.-2 14s. 8d. per week. The wages of the driver and his mate amount to £6 10s. per week, garage rent to 10s., insurance to the same amount and licences of £1 4s. per week. That makes a total of £11 8s. 8d.
For fuel we may take as a fair average consumption 1 cwt. for 12 miles of travel, which, taking coal at 2s. 3d., is 2.25d. per mile. Lubricants will cost 0.5d., tyres 2d. and maintenance 2.4d.; these items give a total of 7.15d.
Now to deal in the same way with the cost of operation of a 4-ton side-tipping petrol vehicle. The first cost will be £960, less £50 for tyres, making £910 net.
B48 Interest and depreciation calculated in the same way as before amount to £118 Cs. per annum or £2 7s. 3d. per week. Wages, taking again a driver and mate, as, for the haulage of building materials, they are usually both employed, £6. Insurance 9s. per week, garage rent 8s. 6d., licence 19s. 3d.; total £10 4s. per week.
For the running costs there is petrol, which, when consumed at the rate of a gallon costing is. 4d. for every eight miles, is 2d. per mile, lubricants 0.21d., tyres 0.8d. and maintenance 1.57d.; total 4.58d. per mile. For 100 miles per week the total cost in the case of the steamer is 100 times 7.15d. (£2 19s. 7d.), plus £11 8s. 8d., which is £14 8s. 3d. For the petrol lorry 100 times 4.58d. (£1 18s. 2d.), plus £10 4s., which is £12 2s. 2d., is the correct calculation.
If we consider this 100 miles as having involved a journey per day for each of the vehicles, fully loaded,
the steamer will have carted 60 tons at a cost of 4s. 9.65d. per ton, but the petrol machine will have carried only 20 tons at a cost of 12s. 2d. per ton. The comparative costs for weekly mileages up to 500, and one, two and three loads per day, are given in the accompanying table. The difference in profit per ton, assuming that the price is the same in every case, is fairly evident from the figures, but there is considerably more than that shown by these comparative statistics.
Gross-profit Considerations.
The gross profit per week, given that loads sufficient to keep either vehicle fully occupied are available, can be shown to be tremendously in favour of the larger machine. Take again the simple ease of work involving 100 miles per week and one journey per day for five days. Assume that the price per ton is, in the case of the petrol vehicle, just sufficient to show a small margin. Let us take it, for example, that it is 15s. per ton. In one week the revenue earned by the petrol vehicle is that resulting from the cartage of 20 tons at 15s. per ton, and is, therefore, £15, showing a gross profit of £2 17s. 10d. The steam wagon, on the other hand, has carted 60 tons, presumably at the same figure, and the revenue is, therefore, £45 and the gross profit £30 11s. 9d. S.T.R.