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How the Size of a Vehicle Affects the Prospects of Obtaining a Haulage Contract at a Profitable Rate

Smaller Vehicles to be Preferred

IN last week's issue of "The Commercial Motor " I dealt with the cost of hauling. -foodstuff for cattle, I also indicated the charges which the haulier would have to make in order to obtain a specific weekly profit. _ I took the stindard week of 44 hours as the first example, and then. proceeded on the assumption that the hatslier.was unable to obtain work to keep his •vehicle fully' occupied for morel,•

than 32 hours per week.. .

I showed that, even if 1 allowed for some reduction in' establishment costs and for a diminution in the profits to be earned, the operator would still have to increase his charges, as compared with those for a vehicle working a full 44-hcur week. Finally, I assumed that a country operator would find that his average number of hours per week was only 36, and I worked out a series of rates on that basis.

I now want to discuss the problem of the way in which the size of the vehicle affects the prospects of obtaining •a contract of haulage at a price which will be profitable to the haulier, but before doing so I want to point to one or two facts whichmust be keptwell in mind. They are 'matters.. to which 1-have 'referred from time to time, and should be known to those operators : who arc acquainted With "The Commercial Motor ' Tables of Oper'at'ing Costs.

First of all, it should be -remembered that the costs as" given in the Tables are average figures, in that they are compiled from data relating to vehicles of good performance and which are economical to.operate, as well, as those to

wh:ch the reverse 'applies. . . .

It is,. therefore, up to operators to obtain particulars of their own. costs, to apply them to whatever problems are here discussed, and to make corrections aceordingly. . Even where he may not have definite data to work 'upon. it may . well be that an operator is .aware that his actual expenditure is greater or less than is quoted in the Tables.

Why Costs Vary

So far as running costs are concerned,, that may apply to every item. His vehicles may consume more, or less, fuel or lubricating oil than the average, so that his expenditure on these items will differ from the figures given in the Tables. He may be cateful with his tyres, regularly examining them each evening and retnoving flints or other puncture-producing agents. He may check the alignment of his •wheels often enough to be sure that he is not suffering undue wear -of tyres because of faulty alignment, and thus, on the whole-, effect suety eeonomies as will reduce his tyre costs below the average.

On the other hand, his work mu involve him in taking his, vehicle on indifferent roads, with the result that his expenditure on tyres will he increased accordingly. H's arrangement for maintaining his vehicles may be more economical than is poSsible under more average conditions, whilst, as for deprec.ation, it may be that, in the first place, he buys a particularly good vehicle and, by taking care of it, extends its useful life considerably beyond the normal peKod.

The .standing charges also are, in like manner, subject to correction according to the conditions of the individual case, although the differences here are not likely to be so great as in the case of the running costs. Even the licence, which at least might have been expected to remain unaffected, is. nevertheless, subject to that much-abominated increase of 10 per cent.. it 411e:owner of the vehiele be compelled by eiretrmstances -to renew his licence quarterly instead of annually. •

Of course. if he is a; member of the Road Haulage Associatron, he can take' advantage of A scheme which that Association has in being

What Grade for .Wages ?

Then, of course, there is the cons*ration as' to whether he is in a Grade I m 'Grade 11 area, because in the latter case the wages he will have to pay his drivers will he somewhat less than those quoted in the Tables, in which Oracle

scales of wages are assumed. . • With the Grade II districts becoming fewer in number. and taking intei consideration the fact that if he Works from a Grade II area into a Grade I area he must still pay Grade I wages, the advantage which the rural operator used to enjoy is gradually disappearing.

In my previous article I referred also to profit margins and establishment charges. In the Tables, certain arbitrary amounts are taken for these items, and as with the figures for costs, they are average ones. I do, however, admit that there is more opportunity for fluctuation in these two items than in any of the others, but the difference is nothing like that which many operators seem to imagine, especially as regards establishment costs.

My previous article was mainly concerned with loading and unloading times, showing how they differ for various materials. What 1 want to impress upon operators is the importance of givitig careful consideration to loading and unloading times as a factor in rates assessment. In the article I also tried to make another point, that if a haulier is to make a profit he must,. when calculating his rates, take into consideration the number of hours he can expect the vehicle to be in profitable employment week by week.

The two factors are related, in this.way. The time element in costing and charging affects three fixed weekly items: the standing charges of the vehicle, the establishment costs and

the profit thc operator expects to earn. Obviously, if the

hours per week are few then the total of these three items is much greater per hour; also, if the loading and Unloading time be great the cost per load, and, therefore, the charge perload increases because it must take into account the effect of all those three items

Let me take a simple example and assume that the total of the three in any particular case is ill per week. In a , .44-hour week that works out at 5s. per hour, but if it he only a 33-hour week the charge per hour must be 6s. 8d., and so on. Then, again, if the loading and unloading time for

a 5-tonner totals three hours, in the case of the .44-hour week the charge must be 15s. per load, or 3s. per ton. Whereas if it be a 33-hour week the charge muSt be £1 per load or 4s. per ton.

Another co-related factor is the size of the vehicle. It is usually taken for granted that the larger the vehicle employed the lower tile rate per ton. This is a mistake, and 1 propose to show by comparison with a 12-tonner that it is the Smaller vehicle and not the larger one that is the more economical.

First of all let mc draw attention to Table 1, in which are set out the figures for cost-per-ton which 1 arrived at in the previous article. The information is given for three lead distances and for three different numbers of hours per week. The information as to how those figures were calculated may be gathered from what follows, in which I have adopted precisely the same Method in connection with the use of a 12-tormer or as it is called in the Tallies. a Maximum-load-6-wheeler."

First the standing charges. These are given in the Tables as £11 Is. 6d. pen week. That amount covers licence, wages, rent and rates of garage, vehicle insurance and interest on first cost. It will be observed that in these items, there is no mention of running cost; the operator will, therefore. realiie that there is no provision for any movement of the vehicle. If we are going to consider that this 12-tonner be regularly employed, on work involving an average of 44 hours per week, this ill Is. 6d. per week is equivalent to 01d. per hour.

For profit on this large vehicle I will assume £10, arid for establishment costs, £6 per week. The total is £16, which, for .a 44-hour week, is equivalent to 7s. 3,1d. per beim. The total of these fixed charges is. therefore, 12s. 4d. per hour.

Now, according to the information we have about loading times, it takes half-an-hour to load 1 ton and the same lime to unload I ton. To load a 12-tonner must, therefore, take six hours. and the same time to unload it. It should he immediately apparent that for short-lead distances a vehicle of this type is impracticable, but letting that pass for the moment, make my comparison on the assumption that a vehicle of th-i.size ean he used for the purpose in view.

First of .3.11, the rateto be charged on account of loading and unloading only,'or, in other words, the terminal charges, will be 12 hours at 12s. 4d. per hour,' that is £7 8s.

The running cost of a. vehicleOf this type over compara

tively.short. weekly mileages is • given the Tables at 9}d. per mile. that covers fuel, lubricants, tyres, maintenance and

depreciation. Over a 10-mile • lead. which is the first distance 1 cited in the previous article,, the total of running costs will be 20 limes 91d., which is 155. 10d. There is still the time taken in travelling the 20 miles, and that 't am assuming to be l hours and, at 12s. 4d; per hour, comes to 18s. 6d.

The total charge is thus made up . of three items: the terminal charge of £7 8s.. the' runningeast at .15S. 10d., and the travelling time 18s. 6d. The total . is £9 2s. 4d,, which is equivalent to 15s. 3d. per ton for a I2-ton load.

Considering now the 20-miles lead. The vehicle runs 40 miles at 91d. per mile, which is ill Its. 8d., the travelling time is 21 hours at 2s. 4d.--€1 10s. 10d., and there is-the same terminal charge of £7 8s. The total is £10 10s. 6d.. which is equivalent to. 17s. 6d. per ton. For the 50-miles lead, working out the figures in the same way and assuming 5,i-hours travelling time. I get a rate or Li 4s. 6d, per ton.

Now assume that instead of a 44-hour week, the operator can find work on an average throughout the year of only 32 hours per week. As in the previous case, I will assume that because of the fewer hours the establishment costs are less, being £5 instead of £6,. and that he is content with £8 per week profit instead of £10. Thai means that hiS total for these two items is €13, instead of €16, but on the 32-hour week the charge per hour is increased from 7s. 3.W. to 8s. 31-d.

The increase in his basic standing charges is on the same lines, and the charge per hour . is 6s. Hid., instead of 5s. 0-1d., so that the total of all three fixed charges is 15s. 1cl. per hour. On a 36-hour week, the corresponding figure is 13s. 80.. per hour. The rate per ton is given in Table which accompanies this article.

Comparison between the two tables makes it obvious that the cheaper is the 5-tonner, and that is the type of veHcle which the free 'haulier will in future prefer. It is of interest to note that the advantage which the 5-tormer 1N:Cs diminishes as the lead mileage increases. For example, taking a 36-hour week, the difference for a 10-mile lead is 5s, per ton, For a 20-mile lead 4s. 7d. per ton, whilst for a 50-mile lead it is only 2s. 3d.

Add. to that the fact, as I have already mentioned. thatthe 12-tonner is impracticable for short hauls 1Kcaus.:, of the time it takes to load and unload, then the preference for the 5or 6-tanner can hardly be disputed. S.T.R.