Q I have been offered work transporting cartons of soap powder
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between a warehouse and two or three shoos_ I intend to use a 5 ton-gross diesel van purchased second-hand for £1,600; the work will involve about 160 miles a day round trip for three days a week and I hope to obtain other work for the remaining two days. I have been promised the use of space in a trader's premises to garage the vehicle for e2 a week and the maintenance will be done by a garage under contract. I have applied for an 0 licence but, in the meantime, could you tell me what would be a reasonable rate to charge?
A Without knowing more about the actual costs that you will incur in doing the job, it is not possible to be precise about the appropriateness of a rate to charge. However, it is possible to demonstrate how to build up a cost table for a vehicle of this type and, by substituting your own figures where this is possible, you can make a more accurate assessment. Those figures which you have already given have been used in the following table and where you have supplied no information, the figures given in CM Tables of Operating Costs have been included.
On the basis of your vehicle having an unladen weight of 2 tons and that you are buying the vehicle on hire purchase at 12 per cent a year, the following Thus, if you obtain similar jobs for the remaining two days then the average weekly mileage will be 160 x 5 = 800 miles. To obtain a total operating cost per mile you should divide the standing cost by the weekly mileage and add the remaining cost (£56.40 divided by 800 =7.05p plus 8.04) equals 15.09p a mile. To this should' be added 20 per cent for overheads and 20 per cent for profit and contingency which gives a minimum charge of 21.13p a mile.
You must be careful that the weekly mileage reaches• expectation otherwise you will under-charge. It is most important that you forecast your weekly mileage accurately when first quoting and if there is any doubt use the lower mileage figure.