Problems of the
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HAULIER
and CARRIER ISTATED, early in this series of articles, that there were two objects in view. First, that of demonstrating to those hauliers whose cost data are somewhat scrappy and incomplete just what the cost of operation of a vehicle is likely to be. Really. I set myself to prove the accuracy of the figures in The Commercial Motor Tables of Operating Costs relating to a 2-ton vehicle. I have gone to that trouble because I am sure a good deal of rate-cutting is due to the fact that so many users do not appreciate what their costs are, and cannot be made to believe that the total is anything
like as great as it is. .
In going into these figures I divided them into two categories, current expenditure and sinking fund, and I drew up a form of account embodying that classification. That form and the figures for the 2-tonner have now appeared in several successive issues of The Commercial Motor, and I must refer new readers to the previous issues.
Establishing sa Sinking Fund.
The second object was to describe a simple means for establishing a sinking fund from which the necessary cash could be drawn, as needed, when tyres had to be replaced, repairs carried out, taxation paid, or insurance premium renewed. I come now to this, the second part of my scheme.
Referring to the figures already given, the average expenditure on tyres was shown to approximate to 0.45d. per mile, on maintenance to 0.75d. per mile, whilst the amount to be set apart for depreciation was shown to be 0.50d. per mile. The sinking fund on account of the licence is 12s. and on insurance 10s. per week respectively.
There is no point in working to decimals in building up the sinking fund. The object in view is to make sure that there is put by, safely, a sum of money which will enable all these expenses to be met, as and when they arise.
It will be sufficiently near, therefore, to take the sinking fund for tyres to be 4s., for maintenance 6s., and for depreciation 4s. per 100 miles. Moreover, as a further approximation I propose to set aside amounts calculated only to the nearest hundred miles per week.
With the foregoing in mind, Table 1, which sets out the savings on account of sinking fund in relation to the operation of a 2-ton lorry, should be fairly easy to understand. It is recommended that the haulier who follows this scheme should keep the money entirely apart from his ordinary banking account.
Ways for Keeping the Money.
I suggest that he follows one of two courses. Either that he opens a Post Office savings account, or that he opens a deposit account with his bank, using for small sums one of the little metal money-boxes which the bank will provide free of charge.
He should draw up a little form on the lines of Table 1. If the vehicle he operates be a 2-tonner, then the figures given at the head of the Table will apply in his case, and he can work to that rate exactly. At book, bringing it up to date at the end of each week.
It will be noticed that, in the body of the Table, the totals to date for each item are shown; That is the most useful way to keep check on the figures, as the operator is then able at any time to see how much is standing in the fund fer .tyres, or for maintenance, or for depreciation (against the time when a new vehicle
is needed), for licences, or for insurance. The grand total indicates how much should be in the bank for this sinking fund.
The Method Described: Now for a brief description of the method. In the first week ending October 6, 220 miles are covered; that, for our purpose, is treated as though it were 200 miles. The amounts to be deposited for each item are shown, the total for the week being 22 10s. In the next week 280 miles are covered, which are assumed to be 300 miles. During that week, however, two new valves have to be bought, costing 6s. The full amount to be debited for maintenance for that week is three times 6s., that is to say, 18s. in all. Of that, however, 6s. has been spent on the valves and, therefore, only 12s. goes to the sinking fund instead of the full 18s.
a later stage I will indicate what the figures should be in relation to other sizes of vehicle.
Across the top it will be noted the various items are enumerated as above described, and as a reminder the actual amounts to be set aside per 100 miles, or per week, are shown. There is a column at each end for the date, making it easier to read from either side, another for the weekly mileage, one for the total to date and another, a fairly wide one, for the recording of any expenditure, which may duly be debited against the sinking fund.
When the haulier has drawn up this little form he should pin it, or paste it, inside his deposit account A' similar situation arises, during the week ending November 17, when four sparking plugs, costing 24s., had to be bought. The mileage for that week is actually only 410, counting as 400, so that nothing is credited to the sinking fund for maintenance, the whole amount having been disbursed on the plugs.
November 24 is a particularly heavy week for expenditure. The brakes have to be relined at a cost of 2,2 10s., and a new cover to be purchased at £6. .There is actually a diminution of the amount standing to the credit of the maintenance sinking fund, whilst that for tyres is in debt to the rest of the fund to the extent of 12s.
The point to note, however, is that there is no difficulty in paying the bills for these items, because, even when this expenditure is met, there is still a balance of £17 14s. total. And so on, week by week, until the time comes when even a new vehicle can be purchased.
The two points I must emphasize are, first, that by putting this money into a separate account the haulier avoids any mistaken ideas as to the profit he is making. Secondly, money is always available to spend on essential matters of maintenance. S.T. R.