RATES FOR UNIT LOA[
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DF n 12 AND 15 TONS WE have now three sets of figures for the cost of operating vehicles on long-distance haulage, the fixed charges and the running costs in relation to each of three sizes of vehicle, those having load capacities of 7, 12 and 15 tons. It should be noted, incidentally, that in the fixed charges, establishment costs arc included.
For the 7i-tonner, the figures are : fixed charges, 215 15s. fid. per week; running costs, 6d. per mile. For the 12-tonner : fixed changes, 224 3.s, per week ; running costs, 7/d. per mile. For the 15-tonner: fixed charges, 227 7n. per week; running costs, 9d. pens mile.
In addition, I have shown that in the case of demurrage, that is to say, if vehicles be delayed at terminals beyond a fixed standard period, the charge should be : for the 7ftonner, 12s. per hour ; for the 12-tonner, 16s. per hour ; for the 15-tonner, 20s. per hour.
Standard Rates Call for a Fixed Time for Loading and Unloading I have further demonstrated that the standard time for loading should be, in the case of the 71-tonner, 1 hour, in the case of the 12-tonner, 1i hours, and in the case of the 15-tonnei, l hours; the same period is allowed for unloading. I have already emphasized that, if there is to be a standard schedule of rates there must also be a standard of time for loading and unloading and if that be exceeded, demurrage—a charge over and above the rate provided for in the schedule —must be chargeable.
In the above fixed charges I have not overlooked the incidence of provision for war-damage insurance. I am of opinion that the allowance thus made is a reasonable average. In some cases the expense may be greater, but in others it will be less. The difficulty in arriving at a figure for that expenditure results from the variation as between the capital involved in buildings and equipment, per ton of vehicle pay-load.
In some cases, a 7i-ton vehicle, worth, say, 21,000, may be a unit in an establishment, the cost of which, taking into consideration buildings, equipment, plant and all assessories, may mean that the total value, in connection with that vehicle, upon which war-damage insurance premiums must be paid, will actually be 21,500. In other cases, where the buildings and equipment are meagre, the sum involved may be no more than 21,100.
In efiect, the addition of war-damage insurance premiums to establishment costs has exaggerated the difference which already exists between those costs for one concern and those for another. I think, however, that the figures I have given are sufficiently accurate to serve as a basis for this assessment of rates. In any event, it is the principle of assessment that I am demonstrating. f am not, at the moment, attempting to fix a schedule of rates.
The same wide difference between the fixed charges for the 7i-tonner and those for the two larger vehicles is due to the fact that in the case of one vehicle provision is made for the wages of only one .man, whereas in the others, two men are presumed to be employed, that being the custom with the majority of operators although, admittedly, it is not universal.
The accompanying Table I is similar to the Table which was included in the previous article, except that two columns have been added, one giving the weekly mileage involved, the other the revenue per journey.
The figures in Tables II and III are arrived at in the same way as those in Table I. The method has already been described in some detail and a brief reminder only is necessary in this article.
Factors Forming the Basis of the Method of Calculation It is important to recall that the method of calculation is to agree upon the number of journeys which can be completed by the vehicle within a week without working an excessive amount of overtime, to assess the actual cost of that work and to add approximately 20 per cent, to the total, in order to arrive at the minimum weekly revenue which must be earned. Working back from that total I obtained the figures for revenue per journey and from that again, the rate per ton.
In the case of journeys in which return loads are assumed to be carried, provision is made for the probability that there will be times when return loads are not available. That provision takes the form of adding 33i per cent, to the rate which would be justified if return loads never failed.
lb the case of such runs the necessary revenue per journey is first calculated, then the net rate to provide that revenue. The percentage is then added to give the figure for the actual rate which is set down in the last column of each Table.
Examination of these Tables and comparison of the profits earned, disclose an anomaly which seems to throw doubt on the wisdom of endeavouring to apply this method of adding 20 per cent. to the expenditure, without taking any other factors into consideration. An important principle is involved here. Briefly, is it fair to assess the percentage of profit irrespective of the size of the vehicle, or should there be some differentiation ?
A Net-profit Anomaly That
Needs an Explanation With this method, the net profit obtainable from the operation of the 15-tanner is shown to be considerably less than that which is possible by using a 12-tonner. That does seem to be wrong, Actually, it arises from the fact that the larger the vehicle the greater proportion of time has to be spent in loading and unloading. That reduces the potential number of journeys per week and, correspondingly, the revenue and the net profit It seemed, therefore, advisable, having this peculiar difficulty in view, to add a further condition, namely, that in the case of the 7f-ton vehicle the net profit should in no case fall below £7 10s. per week, but in the case of the 12-ton vehicle it should not fall below £10 per week, and in the case. of the 15-tonner not below £12 per week. Cognizance of this condition has been taken in the preparation of Tables IV, V and VI, and it is the rates which appear in these three Tables which I propose to assume to be applicable in the argument which follows.
Taking the data from Tables IV, V and VI, we have the following suggested -rates, over a 60-miles lead :-71-ton loads, from 17s. to £1 1s. Id., 12-ton loads, from 15s. 4d. to 18s., 15-ton loads, from 16s. 2d. to 16s. 10d. The lower rate of each pair applies when return loads are plentiful. the higher rate when they are practically non-existent. The practical solution is to take a minimum rate of 17s. per ton, rising to 21 Is, when the loads offering are less than 12 tons and the prospect of return loads is negligible.
Arriving at the Figures of Rates for a 96-miles Route
Over the 96-miles route the corresponding figures are: For 7f-ton loads, from £1 4s. to 10s. 9d.; for 12-ton loads, from £1 1s 4d. to £1 6s. 8d. ; for 15-ton loads, from £1 4s. 6d. to El 7s. 10d. Here, again, I would fix the minimum rate at Ll 4s. per ton, rising to £1 8s. for loads of not less than 12 tons, or £1 11s, for loads of less than 12 tons, the higher figures to apply when return loads are scarce.
Over the 192-miles route the divergencies between minimum and maximum rates are too great to be treated so sidiply. Moreover, this is almost a critical mileage, representing the distance between London and the industrial areas of Lancashire and Yorkshire. For 7i-ton loads the minimum rate is £2 Os. 6d., the maximum £8; for 12-ton loads the corresponding figures are El 15s. and £2 10s. 2d., and for 15-ton loads, £1 12s. 6d. and £2 6s. 8d.
Net Profit per Week Rate per Ton L s. d. L s. d.
I should be inclined to recommend that the 12-ton and 15-ton rates be compounded, taking a minimum of £1 15s. rising to £2 10s. for loads of 12 tons and over, and for loads which are under 12 tons the rates to be from £2 to 43. '
There should be no more than three rates-the two quoted above and an intermediate one. The lowest rate should apply only over routes along which it is the exception for a return load to be non-available. An intermediate rate should apply to routes over which direct return loads are usual, averaging not less than 60 per cent, of the total, or to routes over which return loads are nearly always available, but not for the whole journey or where a detour is necessary to pick up the return load. On all routes other than. these the highest rate must 'apply.
Once again I must emphasize that these rates apply in only the case of traffic in full loads, one pick-up and one drop. The assessment of rates for traffic involving some sort of collection and delivery service is a most complicated problem, involving considerations of organization, equip ment and methods of the individual haulier. S.T.R.