Problems of the
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HAULIER AND CARRIER ICOME now to the consideration of the question that was raised in the previous article, in which an inquirer, asking for advice about a seven-seater coach, opened up a new line of thought. He wanted to know whether it would be worth while for him to purchase a seven-seater for use only on those occasions when, a 26-seater having been tentatively engaged for a journey, seven, or fewer than that number of fares, turned up, in which circumstance, he suggested, it seemed absurd to put the larger vehicle on the road.
The difficulty of dealing with the problem that is involved in a query of this kind is that practice differs so much from theory. As the question is put, I am simply asked to make out a ease for keeping a spare vehicle. The odds are, however, that it will not be treated purely and simply as a spare vehicle, but will be used, first of all, occasionally, on trips not falling exactly within the sphere which may be filled by a spare machine.
Will It be a Spare Vehicle ?
Soon the tendency to make more use of the vehicle will grow and, instead of being regarded as a sPare, it will be brought into general use. Therefore, it is reasonable to believe that the time will eventually arrive when it will be unavailable for the purpose for which it was orginally purchased and the mistake of Using a 26-seater to carry a party of seven or fewer persons will be perpetrated just as though the idea of keeping a spare vehicle had never occurred to anyone.
Of course, it is much better that a vehicle should be used regularly than occasionally, or even rarely, as would be the case with a spare machine, but the point is that, so soon as it ceases to be kept purely as a substitute, the careful calculations of cost which I e36 I must recall that the original idea was to purchase a 30-cwt. chassis of popular makeaor a sum of about „-E200, modify the springing andiovide large lowpressure tyres, and then to equiP it with a reasonably luxurious -seven-seater saloon body. The total cost would most likely be in the neighbourhood of £500, and of that total £50 would be accounted for by the tyres. The capital outlay can, therefore, be regarded as £450, involving a charge for interest on first cost amounting to £18 per annum (interest reckoned at 4 per cent., that being 1 per cent, more than the current bank rate).
Depreciation Creates a Difficulty.
The next item to consider is depreciation, and here we meet a snag. In the ordinary way, as regular readers of these articles are aware, I insist that depreciation be treated as a running cost. I have been equally insistent, however, on the fact that such treatment is possible only when the vehicle concerned is in regular use. That is not the case here, and, whilst it might be permissible to continue to regard depreciation as a running cost in the instance of a spare goods vehicle, that course cannot be followed in reference to a coach.
Coaches depreciate fairly rapidly, whether or not they he used. Not only do fashions change—and this matter of fashion is almost as important in connection with motor coaches as it is in reference to touring cars—but the paint and varnish, as well as the upholstery, and interior fittings, suffer in cases where the vehicle may have to stand idle for some time. I am afraid that, on those accounts, it will be necessary to reckon depreciation at rather.a rapid rate, certainly not less than 25 per cent. per annum, which in this particular case amounts to 1112 las.
There is the tax to be met, and if the vehicle is to be available for use at any time it will have to be licensed for the year, so that 112 per annum must be set down for that. The rent of the garage space may be comparatively small, if there be room available in the existing premises. Probably a further £12 will. suffice.
There should be no account for insurance, If the 'machine is to be used only in substitution, for another, it should be possible to arrange for a policy to be issued which will cover its use in such circumstances, the cost being met out of the premium paid for insurance of the replaced coaches.•
The bare cost of keeping a stand-by seven seater coach is thus seen to be 1154 10S. per annum, and that is the minimum commitment involVed in meeting the conditions specified by this inquirer.
"A Specific Example.
Now, obviously, the justification for going to that expense will turn on two factors, namely, (a) the actual economy effected per journey, by using the seven-seater instead of the 26-seater, and (b) on the number of times during the year that it becomes needful to make the substitution. That this is so should be clear, but, in order to be sure that there is no misunderstanding, I will assume an extreme case. Let me assume, for the sake of argument that the stand-by vehicle is used but once. If it is to justify itself, the saving effected by its use must amount to 1154 10s., which is, of course, impossible. On the other hand, if it be used 100 times, it needs to effect a saving of about 30s. per journey and it will be worth while.
As a matter of fact, it is unlikely that, except in the case of long journeys, a saving of 30s. per journey will be made, and because, in addition, it is impracticable to suggest that the spare vehicle will be needed 100 times in a year, the case for keeping it falls to the ground at once, almost without further argument. It is of interest, perhaps, to gee just what it would save on a journey of, say, 200 miles.
It will be realized, of course, that any economy would be in respect only of actual running costs. The standing charges remain, except that of the driver's wages, which have to be paid just the same, whatever the size of coach, and are, therefore, neither more nor less whichever vehicle be used. The savings effected are therefore in respect of petrol, lubricants, tyres and maintenance.
What it Would Cost to Run.
The petrol consumption of a 26-seater would be in the region of a gallon per 10-12 miles and of oil about a gallon per 600 miles. Tang the higher, figure for petrol, the expenditure on a 200-mile journey for these two items would be 11 and is. 4d. respectively. Take the tyre cost as being that given in The Commercial life tor Tables of Operating Costs, namely, (195d. per mile. That would amount to 15s. 10d. for 200 miles. Maintenance, similarly reckoned (taking the figure from the Tables) would be 11 7s, 6d. The total expenditure on petrol, lubricants, tyres and maintenance is thus shown to be 13 4s. 8d.
Now for the corresponding figures for the sevenseater. Petrol consumption, for the particular chassis that this inquirer had in mind, will be about a gallon per 18 miles, and the cost, for 200 miles, will be us. lid. Oil at a gallon for 800 miles will cost is.; tyres, at id. per mile, 8s. 4d.; and maintenance, id. per mile, lfis. 8d. (Maintenance and tyres are set down at a comparatively low figure In this case, because both chassis and tyres are well in .advance of the work that they are called upon to do.) The total is /1 17s. lid. and the saving effected is 11 7s. 6id. On a journey of only 100 miles, however, the economy effected would be no more than half that amount, namely, 18s. 93d., so that, as the majority of coach journeys is nearer 100 miles than 200 miles it follows that the necessary minimum of 30s. per journey could not be saved. Even that 'minimum, it should be borne in mind, will suffice only if there be at least 100 occasions during the year when the substitute vehicle is used, which is absurd, for, if there be a demahd for 100 journeys per annum with a seven-seater coach there is ample Justification for the purchase of a sevenseater for that work alone, whereupon the whole reason for making the main question falls to the ground.
When the Vehicle Goes into Regular Use.
Of course, so soon as the vehicle ceases to be regarded and used strictly as a stand-by, the calculations just given become inapplicable. In the first place the insurance will have to be paid on the .coach, adding some 130 per. year to the standing. charges. The question of a 'driver arises, too, for, whilst the machine is to he used only in substitution for another, the one driver suffices for two machines. So 'soon, however, as it is sett out on its own, as it were, with all the other coaches out at the 'same time, a driver has to be found for it, and, unless occasional labour be employed, which rarely pays in regular coach work. the
extra cost of the driver's wages has to be added to, the standing charges.
The whole problem, as a matter of fact, turns on that extremely important factor in passenger transport, namely, the passenger-mileage as compared with the seat-mileage. A 26-seater coach, covering 1,000 miles per annum, will cost about 11,500 to operate. The revenue therefrom, if it is to be reasonably profitable, must be at least 12,000. The seat-mileage is 1,300,000 and the average fare per seat-mile must, therefore, be at least 0.37d. That is to say, for a 100-mile journey, the fare per seat needs to be only 3s. ld. If only a minority of the seats be occupied, the fare charged will have to be modified accordingly.
Passenger-mileage the Basic Factor.
In fact, the fare must be based on the passengermileage and not on the seat-mileage. A 26-seater carrying an average of only seven passengers would have to charge at the rate of 1.375d. per passenger-mile. On the other hand, a seven-seater coach, which would cost approximately 1900 per annum to operate and must earn about 11,300, needs to charge-only 0.9d. per passenger per mile and it is so much cheaper, therefore, for carrying seven passengers than is the other. With all seats occupied the fare per passenger-mile on the large coach is 027d., as against a90d. on the
small one. S.T.R.