New operating cost tables now available
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THE 1968 edition of the Commercial Motor Tables of Operating Costs is now available through any bookseller at 6s or from the publishers, Newnes Sales Dept., The Hamlyn Group, 42 The Centre, Feltham, Middlesex, price 7s postage paid.
Seldom since it was first published in 1911 have there been so many changes in the road transport industry affecting costs as have occurred during the past year. Throughout that period the effect of new legislation, particularly as regards vehicle fitness, has already begun to have repercussions on operational standards and correspondingly on operating costs. More recently the substantial increase in goods vehicle excise duty and fuel tax announced in the Budget on March 19 has accelerated the upward trend in the cost of operating commercial vehicles.
In addition to having to contend with this upward trend, operators are increasingly being made aware of the need for a greater accounting responsibility. The first report of the Prices and Incomes Board in June 1965 stressed this need in line with the policy adopted by CM in publishing the Tables for over 50 years.
While the need for an operator to know the cost of operating his vehicles has always existed, the amendments to the C and U Regulations permitting still larger vehicles highlight this requirement. When the maximum potential is exploited these larger vehicles can return lower costs per ton moved but inevitably the initial outlay on these big vehicles will be higher. The risk is therefore greater if a decision is made to employ larger vehicles but the returns will also be greater if the venture proves successful. The key factor is a sound initial estimate based on accurate records of operating costs over a reasonable period.
The success of the road transport industry has been substantially due to its ability to offer a flexible service to customers. But that very flexibility inevitably results in varia
tions in operating costs corresponding to differing operating conditions. Ideally, therefore, estimates should only be based on results obtained from similar vehicles in similar conditions.
But there are many occasions when this ideal cannot be achieved. A newcomer to commercial vehicle operation will have no records of past experience on which to base his estimates. Similarly an experienced operator wishing to venture into the movement of traffic involving the use of the vehicles different from those he at present uses will face a similar difficulty. In both eases the availability of standard operating costs such as are detailed in the Tables will prove invaluable until the more specialized costings directly applicable to his own operations are available.
Apart from providing a useful starting point in commercial vehicle costing when one's own operational records are not yet available, successive editions of the Tables such as the one now announced do provide the opportunity for operators with their own adequate record systems to use the Tables as a yardstick by which to check the trends in their own operating costs. In practice, in these inflationary days, this means checking whether their increases in costs over the past 12 months are comparable with the differences shown in the new edition.
Read the introduction Users of the Tables, and particularly those coming to commercial vehicle costing for the first time, are recommended to read the introduction carefully, particularly because it includes a definition of the terms used. In some itenis of operating costs arbitrary decisions have to be taken in the interests on uniformity.
A case in point is the item of wages. The amount of overtime worked in the road transport industry has always been high. But the factors that give rise to this overtime can vary with different types of operation. Delays at terminal points, heavy congestion on the roads as well as high mileages can all be factors either in isolation or combination. Therefore there cannot be an "average" amount of overtime acceptable for general use and increasing as the mileage becomes higher.
Therefore, as in previous editions, the basic amount for a 40-hour week is included in the standing costs under the item of wages, with adjustments made for contributions to National Insurance, voluntary employer's indemnity insurance, training levy and holidays with pay.
Ready reckoner extended Last year, to facilitate adjustments to this basic amount in accordance with the amount of overtime or other extra payments made by individual operators, a ready reckoner was provided showing additional wage payments as an extra cost per mile This year this ready reckoner has bee substantially extended so that it can U. used for both annual and weekly variation in standing costs which individual operator may experience compared with the amountshown in the Tables and which can then h readily converted into an operating cost pe mile.
While it will be mainly used for wag adjustments it could also be used for excis licence duty adjustments when an operato is using vehicles of an unladen weight sub stantially different from the average. further ready reckoner showing variations the cost of fuel is again included.
In the nine Tables included in this pubh cation detailed operating costs are give over alternative average weekly mileages fo 58 commercial vehicles ranging from a 5cvl van to a 70-seater double-decker bus. Als included are addresses of organizations co cerned with road transport together with recommended vehicle and tyre costs syste