From Driver to Haulier
Page 75
Page 76
If you've noticed an error in this article please click here to report it so we can fix it.
• one tractor and two trailers e unlicensed contract vehicle
HOW to set up in haulage is the gist of many inquiries. A typical example recently received from the West Country concerns a former driver of 17 years' experience, including 10 years with a well-known company in a major industry. More recently he has had three successful years in business on his own account, but finds that his heart is really in road transport. Accordingly he asks for advice on how to set up in haulage.
Success in transport operation normally comes only after many years of practical experience, which can include expensive periods of trial and , error. Obviously an early start relative to a beginner's age is an advantage if the difficult early years are to be successfully surmounted.
A First Step As an initial step before actually setting up in road haulage it would be advisable first to make a survey in the area in which it is intended to operate as to the likelihood of there being sufficient profitable traffic. This presupposes some knowledge of the principles involved in commercial vehicle costing and particularly as regards the type of vehicle it is intended to operate. Concurrently efforts would have to be made to ascertain the extent of services already provided by existing hauliers in the locality and the prevailing level of rates.
A major hurdle to be overcome by any intending haulier is the obtaining of the ail-important carriers' licence. The whole subject of licensing is so comprehensive and complicated that no newcomer can hope to master the subject at the outset. In any case, when the time comes to make a formal application for a licence he will be well advised to seek the services of a legal adviser specializing'in this field. But in the meantime it would be helpful to obtain and peruse the explanatory leaflet G5/7 obtainable from his local licensing authority, which explains briefly the carriers' licensing procedure.
But even i' and when legal and financial requirements have been met, much—if not most—of the success of running a business is dependent upon the character and personality of the person concerned. Obviously any attempt to make an evaluation of character from brief details given in an inquiry such as this is next to impossible. But the following comments are apposite.
When employed by a major company as the driver of a heavy vehicle this particular reader would be in a relatively favoured position as a transport driver. In all probability his vehicle would not only be comparatively new and well maintained but would be engaged on relatively regular journeys to the satisfaction of both employer and driver to the extent that they can plan their work, within reasonable limits, for at least some days ahead.
The Young Entrant A very different situation, however, might well confront a young entrant into the haulage industry. Certainly, in the early years, he would have to be prepared to undertake whatever work was available, within the terms of his licence and limitations on hours, however inconvenient that might be. Although the financial resources disclosed by this reader are by no means inconsiderable (too often they are virtually nil), nevertheless they are obviously in no way comparable with those available to his former employer. Consequently, lower standards might have to be accepted when he went into haulage on his own account, both as regards the initial choice of vehicles and subsequent maintenance.
Moreover, the responsibility of driving the vehicle would be the least of this new operator's worries. Finding profitable loads would always remain a persistent problem. Whilst none of these factors has daunted successful operators in the past they are not ones to be dismissed lightly—and they should be weighed carefully against the financial success already being achieved in his present business.
QUOTE ON HIRING BASIS
A Midlands contractor asks for advice in tendering for the following contract. He states that 16-ton loads have to be moved from the local railway station to works approxiMatey a mile away. Both loading and unloading will be by crane, but because of fluctuation in the arrival of loads a quotation on a hiring basis is suggested for a 16-ton tractive unit operating with two semi-trailers. A normal working week is envisaged.
Dealing first with the cost of operating the tractive unit with one trailer only, it will be assumed that the unladen weight is 7 tons 15 cwt., thereby incurring an annual licence duty of £150. On the basis of a 50-week year to allow for two weeks when the vehicle may be off the road for major overhaul or driver's holidays, the standing cost per week in respect of licences and fees would then be £3 2s. 6d, • Despite the difficulty where short-haul work is involved an estimate of average weekly mileage has to be made, which here is reckoned at 400-a low figure for this size of vehicle. Correspondingly the driver's working week will be limited and as the works to which the loads are to be delivered is engaged on a normal working week, the driver's hours will be reckoned at 50 per week. The estimated cost of wages to the employer is therefore £15 3s. 6d. This figure includes appropriate allowances for insurance contribution and driver's holidays with pay.
Rent and rates in respect of garaging the vehicle are nominally assessed at £1 7s. 9d. a week. Vehicle insurance, providing comprehensive cover for operation in a mediumrisk area is reckoned to incur an annual premium of £275 8s., or £5 10s. 2d. a week. At a nominal rate of five per cent on the initial outlay of £5,140, interest charges would amount to the equivalent of £5 2s. 10d.
The total for the five items of standing costs is therefore £30 6s. 9d., or 18-20d. a mile on the basis of a weekly average of 400 as already agreed.
RUNNING COSTS
Regarding running costs, it will be assumed that an average rate of consumption of 9 m.p.g. is achieved, so giving a fuel cost per mile of 5.58d. when fuel oil is purchased in bulk at 45, 24d. a gallon. Lubricants add 0-31d, and tyres 2-94d. per mile, assuming a mileage life per set of 40,000.
Maintenance, inclusive of washing, servicing and major repairs, is reckoned to cost 4.08d. a mile for the tractive unit and one trailer. In order to obtain the amount to be written off as depreciation, the equivalent cost of the original set of tyres is first deducted from the initial outlay together with a further deduction relative to the respective residual value of the tractive unit and trailer. Allowing for a mileage life for the vehicle of 300,000, the resulting depreciation cost per mile is 2.98d. This gives a total of 15-89d. a mile for the five items of running costs, or £26 9s. 8d. a week. Added to the standing costs this gives a total operating cost of 34-09d. a mile, or £56 16s. '5d. a week.
When a second semi-trailer is employed there will obviously be an addition to the interest charges because of the additional initial outlay, here reckoned at £1,633. The additional interest per week is therefore £1 12s. 7d., so giving a revised total standing cost per week of £31 19s. 4d. On the basis_of a 50-hour working week already assumed this would give a standing cost per hour of 12s. 9d.
Theoretically there should be no additional running costs when the second semi-trailer is in use, as the combined mileage of the two trailers must still equal that of the tractive unit. In practice, however, a nominal addition of 10s. a week to maintenance costs will be allowed for in respect of this second semi-trailer. Accordingly the revised total running cost is £26 19s, 8d. a week, or 10s. 9d. per hour. Correspondingly the total operating costs of £58 19s, a week, or £1 3s. 6d. per hour, is then obtained for the combination of one tractive unit and two semi-trailers.
The amounts given so far relate only to the actual costs to the operator. No allowance has so far been made for either overhead costs or profit margin. If 20 per cent were allowed in each case this would add 4s. 8d. to the hourly rate for standing and running costs combined so resulting in a charge per hour of 1 8s. 2d. for the tractive unit and two trailers.
WHEN THE LICENCE EXPIRES
A local government officer asks what is the position of the hirer of a'vehiele from a contractor if, during the period of hire, the excise licence expires. Is the hirer as well as the contractor liable to prosecution?
Section 7 of the Vehicles (Excise) Act, 1962, states that " if any person uses or keeps . . ." an unlicensed vehicle on a public road he is liable to either (a) an excise penalty of twenty pounds; or (b) an excise penalty equal to three times the amount of the duty chargeable in respect of the vehicle-whichever is the greater.
It would be a matter for the Courts to interpret the phrase "uses or keeps" in the light of individual circumstances. It has been held, however, that prosecution of the driver of an unlicensed vehicle who is an employee not responsible for the licensing of the vehicle is oppressive (Carpenter v. Campbell, 1953, 1 All E.R. 280).
However, Section 18 of the same Act concerned with the duty to give information where it is alleged that an unlicensed vehicle had been used or kept on a public road, requires that any other person (in addition to the owner of the vehicle) shall give any information which it is in his power to give which may lead to the identification of the person concerned. Moreover, if he fails to do so he is guilty of an offence.