HELP FOR HAULIERS.
Page 13
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The Costs of Running a 3 cwt. Van are Analysed by "The Skotch," who Urges the Owner to Demand Is. 1d. per Mile.
IWISH some of my correspondents would restrain their high enthusiasm for me and confine their unbounded confidence in my capacity and tal -elts. I am no wizard, to produce money-making schemes from the lining of my hat ; I cannot make bricks without straw (I doubt if I can make them at all ; at least I have never tried), and I certainly cannot answer questions unless I am given some information as basis for my calculations. ,
I cannot advise in special cases without special knowledge of the conditions. I do not ask for information out of mere curiosity, nor do I make any other use of it, when. acquired specifically to deal with the inquiry with which it is concerned, Were I to do so, my conne&ion with this paper would undoubtedly be compulsorily severed!
It is quite bad enough to have to reply to thoughtless people who omit to enclose stamped addressed envelopes with their inquiries, and I am not partial to that sort of foolishness, but when, as happened recently, a man writes to me, asking my help, which, I would remark, is given gratuitously, and I reply asking for more precise information and he has not sufficient courtesy to answer my letter, I think it is "coming it a bit too thick." I hope the individual concerned reads this and squirms.
' New Vehicles versus Second-hand.
You know, I get all sorts of queries. Some are of general interest, others special and peculiar. Of late, many of them have been concerned with secondhand lorries, owners of such machines contending that they should be able to compete on better terms than owners of new machines, Thistis a fallacy The only item of costs which in actually reduced is the standing charge of "interest on first cost," and it is more than likely that any economy there will be more than offset by increased charges in other directions, in particular as regards fuel and maintenance expense.
There, are conditions which modify the scale of costs and hire charges which have been presented in these' columns, conditions such as low rentals, light establishment expenses, and so on, but they are not affected by the newness or otherwise of the vehicle itself. However, it may serve a useful purpose if I take an example.
A very popular second-hand chassis with a good many hauliers is the 30-cwt. Fiat, the old 15 ter. model. Actually, I believe, this model is not now being made ; but, .apparently, quite a number of reconditioned maehmes ire on the market, although (and here I am subject to correction) I believe that the makers accept no responsibility for. them. At any rate, according to letters I have received, there
justify. my enough of them in the hands of hauliers to ustify , my concerning myself with them here.
Actually, I will deal with the circumstances in which a friend of mine finds himself. He has three -such machines, and has an offer of a contract for all three, , running 60 miles a day each, if he will accept one shilling a mile. My opinion is that he should decline, and here are my reasons.
An Unprofitable Hire Charge.
His running costs are on the high side, chiefly because of the expense of his 'pneumatic tyres. He gets, 12 miles to the gallon of petrol—twopence a mile, and oil costs him 0.40d. for the same distance. Tyres cost 250 for a set of .six covers and 27 10s. for tubes. His covers manage to run 5,000 miles apiece, and the tubes 10,000. As the result of a not too abstruse mathematical calculation, one arrives at the conclusion that his tyres alone cost him 2.58d. a mile. Maintenance works out at 1.20d. There is no market price for new vehicles of this type, so that, in. order to arrive at a figure for depreciation, one had to do a little guesswork. I estimated for him that about half the life had been taken out of his machines before he got them, and that depreciation should, accordingly, be based on 60,000 miles. As he gave 2350 each for the machines complete with tyres, the depreciation must be calculated on 2290, and amounts to 1.16d. per mile. Total running costs 7.34d. per mile.
His standing charges do not call for much comment, except that he is fortunate in having a barn attached to his house, thus reducing his garage rent i
to a nominal amount. Interest s calculated at 5i. per cent. on 2290. The-costs are : Licence 10s., wages 23, rent is. insurance 6s., interest 68., total .E4 3s. per-week ea:eh machine, or 212 Os, a week for the three.
His office expenses are very little ; he is fortunate in not having to advertise or travel much, nor is his correspondence more than negligible (from a cost point of view). In fact, 21 a week covers all his expenditure in that direction. The same amount is all that need be set on one side as contingency against -accident, and the total of these £2 a week, is spread over the three machines, making his total expenditure, apart from running Costs, 214 9s. a week.
The Difference Brought About by 1d. per Mile.
Now, if he runs 360 miles each week with each machine, he will spend, in running costs, 1,080 times 7.34d., that is to say, in round figures, 233. 233 plus 214 9s. equals £47 9s., which is the debit side of his account. If he gets a shilling a mile, his income will be 254, and his profit 26 lls, er'week, which is not enough for three machines. At Is. id, a mile, however, his return will be 210 16s., which is reasonable. I have therefore told him to try for is. id.
Readers should note the enormous difference made by a penny a mile. In this case it means 24 5s. a week, and if this amount could be saved in the running costs, by care in petrol and oil consumption, i
and especially n tyres, it would add to the profit
accordingly.