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Parcels Carrying
A Guide to Small Operators in This Work Who Have Unique Problems to Deal With and Whose Success Depends on Regularity RIT1CISM of rates I compute and recommend gener ally comes from small operators who Consider my charges too high. If I investigate -individual eases. however, I generally find that the operator is either running at a loss or offers poor service, in that his vehicles arc badly maintained, and therefore attracts only low-grade custom. . Sometimes, on the other hand, my figures are said to be too low—that I advocate rate-cutting. This most frequently happens in connection with the assessment of rates for parcels carrying, big operators generally considering my rates to be unprofitable, In the case of a small country haulier, whose expenses and profit requirements are low, my charges would be reasonable, however.
A price which may be profitable to one man is not necessarily acceptable to another. I consider a good rate to be one in which full allowance is made for vehicle operating costs, overheads, establishment charges, and a reasonable profit margin. If one man asks me to help him quote and I give him a figure worked out on the principles just mentioned, I am not disturbed if another fellow asserts that my client could not possibly operate at the figure I gave
him. My views concerning his capacity to do so are unshaken.
I once quoted a,-rate to an owner-driver who was considering the establishment of a simple round of parcels collection and delivery, and my figures were criticized by a. large parcels distribution concern. Now, the man I was advising was proposing to operate on much the same lines as the old country carrier—make a daily run with places of call in each town. His organization would. be, practically speaking, negligible, but he would have local shopkeepers to collect parcels for him, to, whom he would pay a small agent's commission. A big concern is bound to be more expensive to run, as it has to maintain clearing houses and a large staff. There is, therefore, no comparison between
the two.
The small carrier is an essential part Of this country's transpOrt system and deserves encouragement: -'Except.' in ''• rare cases, he does not compete with the British .Transport Commission, as be handles traffic which would be a white elephant for big concerns, certainly bringing in little profit for them, Attracting Custom
Parcels haulage presents unique problems, and rates calculation is difficult. When an operator asks mc to suggest rates, I recommend him to adhere to current charges in his district. Whether he makes a profit or not depends upon his ability to attract custom.
All methods of calculating rates ultimately reduce to one. The operator is concerned with a vehicle which runs a certain weekly mileage which may be averaged from the yearly total. Given the weekly mileage, an average cost per week and per mile can be ascertained. If the owner has not sufficient detailed information concerning any individual machine to be able to calculate his costs from his own figures, those given in The Commercial Motor" Tables of Operating Costs for an equivalent vehicle will serve.
To the figure he obtains in this way must be added his business expenses. If he has more than one vehicle, the total should be divided among them according to their carrying capacity. The minimum profit margin should then be decided and similarly allocated, and the total of the abOilellireeltenit; filuS 'Wide/MIexpenses, is the sum that provides the minimum profit This sum will be the basis for calculating the lowest possible rates and should not be disclosed to anyone. JIThe haulier, of course, should obtain as high a rate as possible, but if his earnings fall below the minimum he should either revise his charges or his method of working. Moreover, if there be a• published standard of rates for any class _Of wOrk, the haulier should try to work to them. taking full advantage of any excess over his minimum.
Another use of the minimum charges schedule is that it enables the operator to ascertain his earnings from work which may be offered him, but in every case he has to take account of the proportion of loaded mileage, which is the first factor to be found when quoting a rate.
Certain fundamental features of parcels carrying have to be considered, the first being that a vehicle of ample capacity ha 's to be employed. I'think that the 2-ton hoxvan is the smallest practicable: type. If there be insufficient business to justify its use, the service will not be profitable, but the use of smaller vehicles, such as .5-cwt. vans and motorcycle cornbinationS,-, yields negligible remuneration.
Second parnes insurance. The operator must insure his goods against the risk of damage or loss in transit. This may cost from £15 to £25 per annum, according to the value of the materials which are expected to be carried. The fact that insurance has been effected should be used as
an advertisement in justification. of fair charges. It is especially useful in competition with a rate-cutter, who probably economizes by not insuring, but an operator should not defame his competitor by pointing out that his competitor does not insure. When the operator offers his rates he should stress the fact that they include insurance.
Consistent and Punctual The next important factor is regularity_ Service must be consistent and punctual. Failure to call at the time appointed, if frequently repeated, will be fatal to success. As a means to that end, one day per week mnst be set apart for maintenance. If the service be a six-day one, Sunday will have to be utilized for that purpose, and holidays for decarbonizing, brake refacing and the bigger maintenance operations. Provision must also be made to ensure that it is possible to hire a spare vehicle in case of accident or when the original machine is being overhauled. , As I have pointed out, there are two ways to assess rates for parcels services. One is to assume a round, and a particular size of •vehicle, and to work-outaverage-rates for various sizes of parcel. The other is to take a current
rates schedule. and see what prospect of profit is offered, which is the method I generally recommend.
The accompanying table is a schedule of charges for local parcels collection and delivery sent to me by a haulier engaged in this business in a town 'lifting a population of approximately 150,000. The radius he covers is approximately seven miles, with occasional-journeys outside, and his average daily mileage is 40. Parcels for long-distance transit are handed over to another carrier. The haulier issues to his customers a note of the general Conditions of .'
delivery as follows:— (1) Ali goods tube securely packed and fully addressed. (2) Dangerous goods and" explosives not carried. (3) All goods fully insured in transit, but whilst all care is taken, no responsibility can be accepted for breakages due to faulty packing. •-• (4) Where delivery cannot be effected owing to there being no one available to receive the goods, and if they cannot , be left, or if they be not accepted, the consignor shall pay in addition to the ordinary rate either (a) half the delivery . charge forreturningethe goods, minimum 4d., or (b) the ordinary delivery charge for each extra call made subject to all such calls being made at reasonable times.
(5) Goods with insufficient addresses are not accepted unless the consignor agrees to pay an additional charge of Id. per minute, maximum 6d., for time spent in ascertaining the proper address.
(6) In the case of incorrect address being given, the con. Signor "shall pay, in addition, for the time spentin. ascertaining the correct address, or, if this cannot be found, will pay the ordinary delivery charge for returning the goods.
(7) In the case of a call to collect goods and the goods caenot be collected, a charge of 6d. for each extra call is payable in addition to the ordinary charge, subject to all such calls being made at reasonable times. (8) The rates quoted are for collection and delivery on the ordinary round; in the case of collection and delivery at specified times—where this can be arranged—an extra charge will be made. (9) in the case of carriage-forward goods, in the event of the consignee not paying the carriage the consignor will pay. (10) The right to refuse goods es reserved.
, Work is Arduous This operator runs a 2-ton van and the net cost of his operation is about 3d. per hour plus 51d. per mile. The minimum revenue for modest profit should be 4s. 6d. per hour plu18d. per mile. I would quote 6s. per hour and 9d. per mile for a satisfactory profit, having in mind that the work is arduous and often there are agency discounts and other .expenses to meet which do not occur in connection with an ordinary haulier's business.
On the above basis, a day's work should bring in A revenue of £4. Now, if every parcel carried weighed approximately 14 lb., 100 such parcels will be necessary to
bring in that minimum revenue, and if each consignment has to be collected and delivered, the work will involve a minimum of 200stops. Can it be done?
Before that question can be answered, we must have a figure for the time necessery to-collect or deliver a parcel: The railway companies used to reckon five minutes per call, phis 'one. Minute per icwt. of The parcel delivered..On-thã basis, five min-tees will 'be occupied per cale•leaving -ont the question of the small fraction of a -minute for-a 'parcel. weighing less thaii 14 lb.
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. Most owner-drivers, however, tell me that that allowance isexcessisie, although they agree that the time per call is. not always at the discretion of the parcels carrier, Who -sonietiniee has to await the pleasure of those on 'whOm he --calls Two minutes ,"they tell ine, is ,a fair average-allowanee per call. Two hundred -stops of two -minutes' each represents ,foeil of 6' hrs. 40 Mins, ' IC the.:distithee travelled during the daY -he 35 miks that will necessiiate, et' the. 'speeds possible in 'Congested' areas. another 3 hrs. 20 mins.; making a total of 10 hrs..
Therefore, such a day's work_ is practicable only if the colleetion and delivery times as detailed here can be adhered to. However, it must be remembered That in most cases collection and delivery can be made only between 9 a.m. and 5 p.m. with an hour for lunch in between. This considerably cuts the working period and would probably make it impossible to collect and deliver as many as 200 parcels.
To go to the other extreme, it is of interest to take, say,
a. parcel weighing 5 cwt., tile charge fOr which is 10s. In Order to bring in a revenue of whith I have stipulated as a, minimum, eight such parcels will be sufficient. Collecdon and delivery of -eight parcels within the time already specified could easily be acCompli-shed with tithe to spare. That means, in a sense, that, if eight parcels can be collected and delivered, then there will hea chance of earning a little more than £4 before the day is over.
The rate for parcels of that size, therefore, appears to be profitable. Clearly, the typical average parcel which wi/I earn the requisite revenue must be mid-way between 14 lb. and 5 cwt.
Experience Guides In order to ascertain what size that parcel must be it is necessary to assume an average number of calls and then see What size parcel will, at the price named,' give the minimum revenue. In considering the possible number of only experience is any guide. Some hauliers have told me that they cart make 150 calls in a day. I imagine, however, that it is not practicable to assume more than an average of 100.
If one parcel necessitates two calls, only 50 parcels can be dealt with in a daY, so that the average price must be practically 10d. per parcel, which means, according to the schedule, that the average' weight must he somewhere between 14 lb. and 21 lb. In practice, the haulier usually collects several packages at a time at one call and delivers similarly, Under those conditions it is reasonable to assume that 100 calls will account for 100 Parcels, bringing this average price to 5d., which is below the rate for any size of parcel. Generally speaking, therefore, it seems as thou& the rates set out in the table should earn a profit. S.T.R.