the costing column True comparisons
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• Ten years ago it cost £40 19s — thi equivalent of £40.95 in today's decima currency — to average 600 miles a weel with a platform lorry having a payload capacit of 7 tons. Now it costs £86.22 — an in crease of well over double, or 110.55 pe cent to be precise.
This large increase is revealed by com paring the total operating cost for thi: 7-tonner as shown in the new CM Tables o Operating Costs for 1972, which have jus been published, with the correspondim figures for 1963.
But are they truly corresponding figures' It depends on the context in which they an used. Take, for example, one of the simple of the 10 items of operating costs — tyri costs. We will assume that in a particula year an experienced tyre fitter was able to increase the average mileage life of the tyres fitted to his fleet by, say, 24per cent But if the basic price of tyres was raisec by 7+ per cent the same year, then the "corresponding" tyre cost compared wift the previous year would have increased by 5 per cent, despite the higher efficiency as revealed by engineering records.
Nevertheless, in another context, namely the recovery of cost through revenue, the overall increase in tyre costs will have to be met if profit margins are to be maintained. Higher efficiency has at least curtailed the increase although such ar unsatisfactory situation is all too commor in road transport operation today.
Another approach to assessing the relative value of operating costs is by showing the 10 items of operating costs as a percentage of the total cost. For over 60 years it has been established as sound practice when compiling successive editions of the CM Tables to analyse total operating costs into five items of standing costs and five items of running costs. To show these 10 items in the form of percentages will help an operator in his continuing drive for higher efficiency to locate more readily the true priority of the various cost centres. He could also usefully seek to determine the significance on his own business of any fluctuations in those percentages over successive periods.
For the 7-tonner averaging 600 miles a week in 1972 the 10 items of operating costs shown as percentages would read: Standing Costs (53.80): licences 3.05, wages (basic) 39.09, rent and rates 2.67, insurance 4.19, interest 4.80; Running Costs (46.20): fuel 14.41, lubricants 1.10, tyres 5.63, maintenance 16.01, depreciation 9.05. If, however, overtime working increased the wages item by £10 then the wages percentage would become 50,68 with, of course, a reduction in the other percentages.