PROBING TIME AND MILEAG FIGURES OF COST
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ONCE again I find it necessary to correct my figures for costs, because of "passing events." Already, I have had to make a correction because of a rise in the price of petrol. Now wages are to be increased, or at least so it seems. In the case of Grade I areas, and it is an operator in a Grade I area that I am considering, that increase will amount to 5s. per week. My figure for standing charges must, therefore, now be increased from the £5 14s. 6d. which I have already proved, to £5 19s. 6d. per week.
The running costs I have shown to be 4.37d. per mile, and the establishment charges, according to conclusions drawn from the operators' figures, which were set out in previous articles, approximately E3 per week.
Some of the foregoing may be Greek to new readers. It is necessary, therefore, to state that I am going deeply into the problem of quoting for new traffic. In doing so, I am taking account of no fewer than 23 factors which have a bearing on rates. The schedule of those factors appeared in the issue of this journal dated February 10.
• Conclusions Already Arrived At • I am taking, as an example, the carriage of sanitary ware and pipes, and have already, in the course of taking some of the 23 factors into account, arrived at the conclusion that a 5-tonner is required, with sided body and removable extensions to those sides. The initial cost of the vehicle was found to be £384; its operating and establishment costs are as stated above. The quotation required is for all mileages from 16 to 120, inclusive.
Now, before anything further can be done, it is necessary to consider another couple of the 23 factors. They are; (6) Is the traffic seasonal or liable to fluctuation for any reason? (7) Is the material easy or difficult A20 to load and unload angl is there any likelihood of frequent and serious terminal delays?
The answer to the first question is that, to a certain extent, it is seasonal, the peak loads occurring during the slimmer months. The variation in density of traffic does not, however, appear to be sufficient to justify any serious notice being taken of it in this calculation. As to the second question, the time taken for the double operation of loading and unloading four tons of pipes, which, incidentally, are all that can be put on the 5-ton lorry, is 1 hrs. There is no danger of any serious terminal delay.
• Calculating the Initial Basic Price • We have now all the essential information with which to calculate the initial basic price for the traffic. It is convenient to start with the consideration of the load over the shortest distance-16 miles.
First, however, let me summarize the figures for expenditure and reduce them to data for time and mileage costing. For the fixed charges there are 25 19s. 6di for standing charges and £3 for establishment costs. It is sufficiently near for the purpose to take the total as being £9 per week. That is the expenditure involved per 48 hrs., so that the cost per hour is 3s. 9d.
Any time in excess of 48 hrs. per week will involve the payment of wages for only the time worked plus, perhaps, a little extra for establishment costs, as over
time involves some extra expense in office work, possibly overtime for a clerk, extra lighting and heating, etc. The actual rate for overtime for each of the first 8 hrs.' is 1s. 80. If 2s. per hour be taken to cover overtime and extra establishment costs it will suffice. We must also look out for occasions when the journey is so long that subsistence allowance has to be paid.
Our figures for normal times, at any rate, are 3s. 9d. per hour, and 4.37d. per mile. These are, however, costs, and include no allowance for profit. A minimum addition for profit is at the rate of 15 per cent., which makes the figures 4s. 4d. per hour and 5d. per mile. These are the figures on which the charges must be based, bearing in mind all the time that they are minima.
The first thing to do is to assess the terminal charge. That is the cost of the time spent in loading and unloading. As that time is 14 hrs. the amount is 6s. 6d. per load.
do Consideration of Time Factors 4.
Next, we want to know how long it will take to cover 32 miles, the out and return journeys. The first two miles of any journey will take; on the average, 10 mins., because the beginning is always in a town, with traffic congestion, pedestrian crossings, and other factors, preventing higher speeds than 12 m.p.h. In all probability the same will apply to the last two miles of the journey. Sometimes it may be less, as when delivering to a rural area, but sometimes it may be more, as when making a delivery into a particularly congested town. Therefore, 20 mins. must be allowed for four miles each way of the journey; that is 40 mins. for eight miles, out of a total of 32.
The other 24 miles will probably take an hour. Altogether, therefore, an allowance of 1 hr. 40 mins. must be made for travelling time; at 4s. 4d. per hour that is 7s. 3d. to the nearest penny. To that must be added 32 times 5d. for the cost of running, including profit on that, i.e., 13s, 4d. The total cost of travelling is, thus, LI Os. 7d. Add the rate for terminals, 6s. 6d., and the total charge is seen to be £1 7s. Id. That is equivalent to 6s. 9d. per ton, or 5d. per ton per mile.
As a check on the above, and as providing useful information, it is a good plan to reckon how many journeys can be completed in a day. The total time per trip is 3 hrs. 10 rains., so that three journeys could be completed in 94 hrs. At 4s. 4d. per hour, 94 hrs. must be charged at £2 is, 2d„ to which must be added the charge for 96 miles at 5d. per mile, which is £2.
The total is £4 Is. 2d., which is £1 6s. 4d. per trip, 6s. 9d. per ton, or 5d. per ton per mile.
Each extra mile lead means, of course, two miles of running. The time needed may be taken as 5 mins., for which the charge should be 44d. The charge for the mileage run is 10d., so the addition must be is. 24d. per ton per mile lead over and above the. 16 miles. For an 18-mile lead the extra charge is, thus, 2s. 5d., bringing the total to £1 9s. 6d. That is 7s. 44cl. per ton, or 4.9d. per ton per mile.
Another point comes forward for consideration here, that which lends importance to reckoning how many journeys per day can be covered over a given lead. It must be obvious that the lead cannot greatly exceed 18 miles before we come to a point where it is not possible to complete three journeys per day. In the event of a series of journeys of such a length, there is bound to be a lot of lost time, which will put up the cost. Before trying to solve the problem of what to do about that, however, I think it just as well to consider our 16-mile lead from another angle.
In the foregoing calculation I have assumed that the driver keeps well within the law and does not travel at more than 30 m.p.h. If that condition does not hold, then the balance of 24 miles mentioned above may well be covered in 45 mins., or even less.
• When Journey Times are Lowered • It is fair to admit, also, that an expert driver can probably lower the time for the initial and final two miles of each journey, so that, instead of 1 hr. 40 mins for the round journey, he may cover the trip in an hour. The total time, including terminals, will thus be reduced to 24 hrs. The cost for travelling will be 4s. 4d. for time, plus 32 times 5d. as before, i.e., 13s. 4d. The charge for travelling totals 17s. 8d. Add the original Gs. 6d. for terminals, because that remains unaffected. The total charge under these illegal conditions is thus £1 4s. 2d. The charge per ton is 6s. 04d., and per ton per mile, 44d. Correspondingly, the extra charge per mile lead is reduced to Is. id. The charge for an 18-mile haul will be £1 6s. 4d., which is 6s. 7d. per ton or 4s. 4d. per ton per mile.
Moreover, it will now be quite easy to cover in a day three round trips of 18 miles each way, and the time when it is necessary to consider the problem of what to do about lost time, because of broken days, will become more remote. It is, in any case, sufficiently remote for me to postpone considering it until the next
article. S.T.R.