Problems of the
Page 74
Page 75
If you've noticed an error in this article please click here to report it so we can fix it.
HAULIER and CARRIER
A Little Argument About Maintenance with a Haulier, Whose Ideas Upon the Subject are Distinctly Sketchy. A Flagrant Case of Rate-cutting
T SUPPOSE that most of those who read these words .1 have heard the expression, "a fool's paradise." Like most such expressions it does not readily lend itself to explanation: indeed, no one ever seems to explain such phrases. However, the other day I had a haulier friend visiting me who, were he but aware of it, was actually a resident therein. True, he did not give me that as his address and we did not even discuss the place or its actual whereabouts. I do hope, however, that I succeeded in putting him in such a state of mind that he will not be living there much longer.
He was just telling me that he had been successful In obtaining a contract for haulage from Bristol to Manchester. The material was timber for the making of packing cases and the price was 17s. 6d. per ton.
" Humph! " said I. "How did you manage to get that contract? " •
An Example of Disastrous Rate-cutting.
" Oh! the other man was getting £1, and I found that I could do it for 17s. 6d. and make a profit, so I cut him out."
"You're a bright lad, you are!"
"What do you mean?"
"Well, it's about 160 miles from Bristol to Manchester. What size of lorry are you running?" 'A five-tonner."
"How many miles a week do you do?"
"About 800."
"It costs you 9.6d. per mile to run that lorry. You have to cover 320 miles on that trip from Bristol to Manchester and back, so that your actual bare cost of operation is £12 16s., and you're carrying five tons at 17s. 6d. per ton."
n48 "How do you make out that it costs me £12 16s. to go from Bristol to Manchester and back. It's ridiculous."
"Is it? How many m.p.g. are you doing? six."
"What do you pay for your petrol?"
"One and threepence."
"That's 21d. per mile for petrol alone. Do you use much oil?"
" Not a lot ; about a pint each way is enough."
"That's roughly a gallon a month and another two gallons a month when you change the oil in the crankcase; three gallons for 3,200 miles. One thousand miles to the gallon at 4s., which is 1s. 3d. for every trip to Manchester and back. I suppose you don't know how much your tyres cost you?"
A Haulier's Accountancy.
"Not exactly, but I'm taking it that they will work out at something like the figure you give in the Tables, namely 1id. a mile, and I'm saving that against the time when I want new ones."
"Splendid. How about maintenance?"
"Oh! I do all that myself."
"Do you? Well, we'll come back to that again. I suppose you allow something for depreciation?" "No, I'm not allowing anything for depreciation.. l've bought the lorry on the hire-purchase system." "Humph! I'll come back to that again, too. What about your licences?" " I expect I shall find the money for those when the time comes. I always have done up to now." "And wages?" "I don't pay wages. I drive the lorry myself." "Garage rent?"
"I don't pay any."
"What do you mean, you don't pay any ?"
"Well, I've always had an old shed at home that I've put the machine in when I'm there, and when I'm out I usually sleep on the road," "Insurance?"
"I never have insured."
"I see. I presume, in the face of all that, you don't make any allowance for interest on first cost? "
"No."
"According to you, then, the journey costs you £3 6s. 8d. for petrol ; is. 3d. for oil ; £2 6s. 8d. for tyres, and that is all there is to it."
"Yes, that's right."
" Well, even that is £5 14s. 7d., and you get only £4 7s. 6d. for a load."
"Yes, but that's only one way. Going back I can usually pick up a load of some sort or other, at about the same rate, and that puts me right. I reckon to make about £8 on the round trip."
"Well I've never come across such 'a glaring case of folly in price-cutting. Your whole scheme is wrong from start to finish, but I will take you up, first of all, on a matter about which there seems to be a good deal of misunderstanding amongst hauliers in general; that is, on the question of maintenance, which 'they say-as you have said-they do themselves. What exactly do you think I mean when I talk about maintenance?"
"Running repairs."
"Do you have many vehicle?"
"No, but I've not had it long, What I really mean is that I myself do the decarbonizing, the oiling, greasing, washing, and so on."
"I see. What about refacing the brakes?" "Well, I've not come to that yet."
" Oh ! it'll cost you something when.you do."
"I don't know ; I think I myself could do it."
"Well, I think you'd better not. If you like, you can take the shoes down, but you'd better get an expert to reface them for you. Now, I'll tell you what I mean by maintenance, as applied to a 5-ton lorry like yours. running repairs on your
What Maintenance Means.
"I'll begin by admitting that the cost varies a good deal and that a man like yourself, owning his lorry and with enough mechanical knowledge to carry out what are commonly referred to as 'running repairs,' can effect considerable economies. I shall also show you that he cannot altogether eliminate expenditure on maintenance and that the part he cannot get rid of is the more expensive.
"Perhaps the easiest way to look at the problem would be to take it first of all as it exists where the driver does not do anything, where all the maintenance operations are carried out for him, his business being just that of driving the vehicle. Now, there are two ways in which it can be done. It may be carried out at a local garage, the owner of the vehicle paying the garage proprietor for the work.
Running a Repairs Department.
" Alteinatively, and this is more likely to be the case when the vehicle with which we are concerned is one of a fleet, the work; may be done by the repairs department of the owner. With a proper system of accounting that repairs department will be made to pay its way and charges for every operation performed will be set against the cost of running the vehicle. The result, according to my experience, will not differ considerably from that which would be reached, supposing t h e other course were to be followed and advantage taken of the services offered by the local garage.
" The items are as follow: Greasing, which should be carried out, roughly, every 200 miles, will cost, at ordinary rates, about 4s. per occasion; brake adjustment, say every 5,000 miles, about 7s. 6d. a time. Oil adjustment of levels in the crankcase, rear axle, gearbox, 5s. a time, to be carried out on the average about once every 3,000 miles. Decarbonizing, carried out at an average of every 5,000 miles, costs £3 a time. Washing and polishing, say 5s. every 600 miles (depending upon weekly mileage). Brake repairing, say once every 20,000 miles, £5. Those are minor operations. We have still to consider the real overhauls.
"A minor overhaul of the engine is usually necessary once every 20,000 miles and might cost as much as £25. A general overhaul every 40,000 miles would, in the case of a 5-ton lorry, cost about £100.
"These, in fractions of a penny per mile are :