Haw to Quote a Charge
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Different Types of Haulage Operation Call for Various Methods of Tendering Rates : This Article Describes Whether Quotations Should be on a Time, Mileage, Tonnage or Comprehensive Basis
THERE are four ways of assessing the rates which an operator should charge for the use of his vehicles.. All Involve reference to the maximum mileage per week, . althoughthere may not be any direct reference to mileage in the quotation or the accounts which' the haulier sends to his customers. . However, charging in accordance with mileige-is the most popular. That is why " ' The CommercialMotoV Tables of Operating. ists ' are made up in the way that they. are: .the rate per mile is.tasily found. Even when the charge is ,assessed on . a time ;basis, the basic figure is still the same --• and ,is ,quoted. as :4 charge per week, assuming that the
, mileagecovered is is. stated._ '-'
According to some operators, the best way to charge is on an hourly :basis; the charge is made out per day of 8 or 13-k hours. Thereis no Mention of mileage, .but mileage . &Mies intb.the matter because in making out his charge or '.quotation the haulier has in mind the distance which experience' has shown' bim will be involved in doing that particular job. This -method is applied when the daily mileage is low. Most of the, time for which the vehicle is engaged will ,be oeCupied. Waiting for loading or unloading. In those circtirnstances, a rate per mile would seem absurdly high because' of the tow weekly mileage.
, Frighten Customer . In Table 1,. for example, 'the charge per mile for the hire -of a 2-ton. loirry covering 100 miles per week is given at 3s. 6d.,which is enough to frighten off any prospective customer and, at least, will involve some explanation on the part of the haulier if the customer is not to be imbued with
, the idea that the haulier is attempting to overcharge. Even the alternative rate, 417 10s. per week, is likely to be subject to criticism. The best way is to take that figure, divide it by 44, the number of hours per week, and quote that amount, Si. per hour.
Another way of charging,popular with those who let -out vans on hire, is to make a fixed charge per hour or per day, but providing for a maximum mileage to be run and subject to an additional charge per mile or per hour by which the basic assessment is exceeded. This is the most profitable method of hiring a vehicle. The charge for excess mileage is usually high and is practically all profit, and it is almost invariably the case that the hirer covers a good many mites more than those stipulated in the contract.
Neither of these methods is open to the jobbing haulier who holds himself out to take2on work of any. description. h36 He is usually asked to quote a specific price, either per to or per,.mile, for a job which will only take up a part of , week, leaving him to set about finding traffic to fill the re of the time. . Quotations for such work should be calculate on the basis of "time and mileage," as 1 have so frequentl Ishown. :Using his knowledge of the operating cost of hi veltiCies, he will be able fairly readily to estimate for an job which is put before him.
I propose now to take a few examples of the variou kinds of job which may be offered and show how to appl these various methods of .tendering. for them. So far a the first and second are concerned,, examples can quickly b given and the figures taken directly from the Tables..
Regular Work
A typical case in which the first method will apply is tha in which the haulage contractor receives an offer of regula work from manufacturers in a big city, involving th carriage of products to many destinations. Some days th work will be largely -local; on other days long runs wi: have to be made. An examination of the conditions dir closes that the weekly mileage will average approximatel 600 for a vehicle of 5 tons capacity. Referring to tb Tables, the quotation will be Is. 3-id. per mile, that bein the minimum figure at which the haulier should undertak the job. When tendering he will quote is. 6d. per mil of even more.
Another example to which the same method applie: but not perhaps so directly, wouldbe 'where a haulier i asked to travel regularly between London and Manchestei carrying a load of 10 tons in each direction, Let m assume that for this job the haulier uses an articulate . six-wheeler with an oil engine. His weekly. mileage, o the assumption that he does two complete round journey per week, will be nearly 750 and for that his minimur charge should be between £58 18s., which is the amour quoted in the Tables for a weekly mileage of 600, an I.:70 12s., which is the amount quoted for 800 miles pc week. On that basis his minimum tender should be abot £68.
In all probability, he will be asked to quote a price pt ton. As therefore in the week he moves 40 tons in al his quotation per ton will be £68 divided by 40, which i El. 14s. Again I would emphasize that this is a minirnui charge and would suggest that £2 per ton is the amour . to be quoted in the first place.
In these examples quotations were on a mileage basis. 'hat is to meet the conditions that only part of the week s covered by the contract. In a third case, the vehicle is ally occupied for the week on account of one customer. Le is not interested in a price per mile, as from that he 'mild have to work back, investigating the number of miles 3 be run and then multiplying the rate by that number to btain a price per week, still having to divide by 40 to get I the rate per ton. By quoting a weekly charge in the first lace, the haulier is helping his customer to get at the gure he wants, namely the price per ton, with a minimum f trouble.
Now for a few cases in which it is better to charge by [me only. This will be on what I should call short-haul 3bs. A typical case of this sort of work occurs in connecion with road-mending, road-making, or building contracts. n the majority of cases the vehicle employed will be a i-tonner, or-and this is the way it should not .be=a '-tonner regularly loaded with 6 tons. The mileage will irobably be 20-30 per day, or between 100-150 per week. )n the basis of a 6-tonner, the quotation should be from 21 1ls. 5d. for the 100-mile week, to £24 14s. 9d. for the 50-mile week.
The reader may now ask where I get these figures as hey do not appear in the Tables. The answer is that they se derived from the " Time and Mileage Charges" in the ast part of Table II. Taking the data relating to a 6-tonner, he recommendation is that the charge shall be the sum g two amounts, the hourly charge of 6s: lid, and the nileage charge of Is. 34d.
I multiply 6s. lid. by 44, the number of hours in the ivaranteed week, thus arriving at the time charge for the ull week-£15 4s. 4d. .Next I take the mileage figure of s. 31d, per mile and multiply that first by 100 and then 50. The former amounts to £6 7s. 'Id. and the latter to :9 10s. 5d. The complete charge is in the first case :15 4s. 4d. plus £6 Ts. Id., making £21 1 Is. 5d., and in the econd case £15 4s. 4d. plus £9 10s. 5d., making £24 14s. 9d.
Oiler's Figures It may serve a useful purpose if I work the figures out m the basis of data relating to an oil-engined 6-tonner. The ate per hour is Id. more, being 7s. exactly, as against is. 11d. for the petrol-engined machine. The charge per, nile is much less, being is. Old. as' against Is. 31d. For he 100-mile week, the charge will be £15 8s. for time; the nileage element in the calculation will'be 100 times Is. Old., vhich is £5 6s: 3d. The total charge-do not forget that the :harge in these calculations is the minimum-is thus :20 14s. 3d. In the case of the 150-mile week, the charge or the mile,age is £7 19s. 5d., and the total, for the oiler, :23 7s. 8d.
This difference in the minimum charge may present a noblem to those who would like to have a cut-and-dried .nswer to the question as to what the charge would be. ffiould the haulier give all the benefit which comes of the Ise of the oiler to his customer? Or should he take it to iirnself as being the outcome of his own enterprise and his ippreciation of the fact that, notwithstanding the extra :xpenditure involved in the purchase of the oiler, it is still :heaper than the petrol vehicle? In other words, the Luther, in buying the oiler may consider that the extra :arning is due to on account of his business acumen in hat he has grasped the fact that the oiler, although costing more to buy in the first case, is less expensive to run, even at such a small mileage as 100 per week.
Actually, as I have pointed out many times in these articles, the price of a commodity is what it will fetch. His commodity is not goods but service, but the same ruling applies. The rate whichthe haulier gets for a job is determined in just the same way; it is what the job will fetch, and if the remuneration falls, below the amounts set down in this article, he should seek other traffic.
There is a point to bear in mind here which is sometimes overlooked, partly; no doubt, because no provision is made for it in the •Tables, it having been found and explained that Such provision is not practicable. I refer to the fact that as there is obviously less wear and tear in the case of a vehicle which is doing a low weekly mileage than one covering long distances each week, the haulier may accept a figure nearer the minimum for short-distance work.
Wear and Tear
It is necessary, however, to be careful in putting that suggestion into practice. All depends on how that low weekly mileage is made up. If the vehicle is engaged on work which involves a good deal of stopping and starting, as in local delivery work, he will be wrong to make any concession on account of presumed diminution of the wear and tear figures: they are likely to be more rather than less than the normal expectation. It is only when the low weekly mileage is because there are exceptional delays at terminals that it can safely be said that the wear and tear may he expected to be less than that of a vehicle doing long-distance work.
One more of these methods of quoting. This is a popular .one, especially in connection with •those contracts which involve the hire of the vehicle as a whole. This type of haulage work, if well organized, is really profitable. It might well apply to a case in which a haulier hires a 1-ton van to a grocer or other tradesman for local delivery of goods. The hours will usually be from 10 a.m.-6 p.m., with a stop for lunch of 1-hour duration. That is 71 hours per day for five days, making 371 hours, plus 61 hours on Saturdays. The total hours worked is thus 44 per week.
It would be fair to allow a customer of this kind an average of 8 m.p.h., including, of course, time for stops;• that is 352 miles per week. A minimum charge for this, according to the Tables, is £22 per week and the haulier should endeavour to get a rate of not less than £25 per week. That is the basic charge and on top of that there should be an extra charge of Is. for each mile over the total of 352, and at least 8s. per hour or part of an hour over eight per day. [Extra miles to the number of eight
per hour are allowed for in the charge of 8s. per hour. .
It May be useful to explain this method of charging in greater detail. I may assume that the .need for an extra charge per mile for any distance over that named in the contract is understood. I 'must, however, make it quite clear that the figure of Is. per mile extra applies only to extra mileage which is run off in the stipulated times of eight hours or four hours per day or half-day. • If the hours are exceeded, the extra charge is the 8s. for an hour or part of an hour for the time taken_ beyond that stipulated, and that extra rate includes 'mileage at eight per hour.
If in addition, to the time above that stipulated there is mileage beyond the eight per hour, that, too, should be charged at is. per mile. S. T. R.