Adjusting Ballast Rates to the 44-hour Week
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Page 51
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I INTEND to go farther with the discussion of sand and 1 ballast rates than I did in the article of mine which
appeared in the issue dated February 7, and present an alternative method of using vehicle-operating costs for assessing charges. Since that article appeared, the.guaranteed week has been altered from 48 to 44 hours and it seems that the first thing to do is to examine the figures quoted in the previous article to discover to what extent the rates quoted are likely to be affected.
Thealteration is slight, and-. -curiously enough, does not affect the shortest leads, where one might have expected it to be most noticeable. That is because there is a good deal of approximation in assessing charges for short leads, and the existence of the excess provision for extra cost on such work absorbs any increase that may be shown to be needed.
The immediate effect of the alteration in hours is to increases one of the two basic figures which are used for the calculation of rates. 1-refer, of eourse, to the time and mileage charges, of which the former shows an increase of approximately id. in the shilling, as was made clear in my article in "The Commercial Motor" dated February 14.
Another point, however, has to be regarded, and that is the number of working hours per day. In the previous article I assumed 81 hours, that being customary in connection with the 48-hour week. Now the regulatedweek consists of four days of nine hours each and one of eight hours, Of five days of eight hours each and one of four hours. For sand and ballast haulage the foimer arrangement will be more practical.
For the benefit of new readers, I must briefly recapitulate the basic data set out in the prevmus article. 1 referred to a 5-ton vehicle and assessed the vehicle-operating costs, etc., as follows:—Standing charges per week: Tax, 14s.; wages, including insurance and holiday pay, £5 3s.; garage rent, 7s. 6d.; insurance, £1 5s. 6d.; interest on capital outlay, 12s.; total, £8.2s. Establishment costs I assume to be £3 8s. per week, so that the sum of fixed charges is €11 10s. per week.
To that total I add a profit ratio o120 per Cent., which is £2 6s per week, giving £13 16s; as the weeklY,revenue necessary in respect of time charge and without any provision for mileage. That is eouivalent to 6s. 4d. per hour.
For running costs per mile I assumed petrol at 2.5d.; lubricating oil, 0.1d.; tyres, I.7d.; maintenance, 1.64J.; depreciation, 1.2d. total, 7,1d. Readers who desire to know how these figures are reached should refer to the previous article. Adding 20 per cent. profit to the cost per mile, the mileage charge is 8Ad.
Basic Cost Figures
The basic figures, therefore, on which the rates must he assessed are 6s. 4d, per hour and 81d. per mile. The rates are to be calculated on the basis of loading by chute and unloading by tipping. Allowing for waiting time and other contingencies, it was assumed that -1-hour might be necessary at the loading end and a I-hour at the unloading end, giaing fahour for time spent at terminals, As a first example, I took a lead of 10 miles and assessed the time necessary for travelling in the following way:—For the first half-mile I assumed an average speed of 6 m.p.h., which meant that that distance would take five minutes to traverse. For the second half-mile the average speed would be 15 m.p.h. (two minutes), and the third half-mile, 24 m.p.h.
(1 minutes). Assuming that the next seven miles were travelled at 30 m.p.h. (14 minutes), and the remaining 1 miles at the same average speed as the opening of 11 miles (81 minutes),-the total time thus calculated is 301 minutes (say, 1 hour). The total travelling time each way is one hour, and the total time for each journey over a 10-mile lead is If hours.
To calculate the rate, therefore, I must take if hours at 6s. 4d., which is us. ld., and 20 miles at 81d., which 4s 14s. 2d., a total of 25s. 3d., or 5s. Old, per ton.
If the material carried be ballast averaging 28 cwt. per cubic yd., the rate is 7s. 4d. per cubic yd., and if it be sand and shingle averaging 24 cwt. per cubic yd. the charge is 6s. Id.
Fitting in the Journeys
Now comes a consideration of the working day, and it is upon the length of the day that depends the number a complete journeys which can be run over any lead. in the previous article, where an 8i-hour day was assumed, it was shown that an extra hour was necessary in order to complete in that time five tound journeys on a 10-mile lead. It was, nevertheless, assumed that five journeys would he completed by a little quickening in action.
If the day be reduced to eight hours, five journeys will be impossible. Actually, four will take seven hours and there will be an hour lost. In that case, each round journey will average two hours, instead of lf, and we shall have to add a time charge for the extra hour, which is is, 7d., to the total charge for the journey, which is equivalent to practically 4d. per ton, bringing the rate to 5s. 5d.
If the day be nine hours long, then five journeys can be completed, with + hour to spare, in which case the 5s. id. may reasonably be allowed to stand.
Consideration of the way in which other leads are affected draws one to the conclusion that the nine-hour day is going to be more convenient and practicable, and that eventually ' it will come to be accepted in this particular business.
As an example of the way in which rates work out on the basis of a nine-hour day, and showing that over some distances the cost is actually reduced, let me take the one-mile lead. In the previous article it was assumed that eight journeys would be completed per 81-hour day. With a ninehour day, however, nine journeys will be quite possible, and the total charge for a round journey will be made up of 6s. 4d. per hour, plus ls. 5d. for two miles at 8id., which is 7s. 9d., or a fraction short of Is. 7d. per ton. Adding Id., as in the previous case, for extra costs involved in running very short leads, we arrive at the same result as before, namely, Is. 8d. per ton.
Rates for Short Leads
With the two-mile and three-mile leads, the rates work out at 2s. and 2s. 4d, respectively, assuming that in both cases nine journeys per day will be practicable. The four-mile lead presents a little difficulty. In the previous calculation it was decided that it would not be possible to complete eight journeys per 8k-hour day, but I think that can be accepted as practicable in a nine-hour day. The cost, therefore, even in this case, does not increase, notwithstanding the alteration in the number of weekly hours, but stays as before at 2s, 8d.
Over a five-mile lead, seven journeys per day is a reasonable average. That means a total time of 1 hour 18 minutes per journey, and at 6s. 4d. per hout that equals 8s. 2d. Add 7s. id. for 10 miles at 81d. and we get a total of 15s. 3d.. which is 3s. id. per ton, as against the previous figure of 3s.
Over the five-mile lead the increase in the rate per too per mile is slightly in excess of an average of 41d„ and this is met by adding, first, 4d., then 5d., again 5d., another 5d., then 4d., and so on throughout the range.
• In Table II I show in the second column the rate per ton per mile lead on the basis of a 48-hour week, and in the other columns the apprOpriate aMounts for a 44-hour week. The first column is inserted for purposes of comparison.
The alternative method of calculating rates is that based on costs assessed according to the method of the Road Haulage Association's rates and charges committee.
The costs of operating a 5-ton tipper, the initial price of which is £750, as assumed in the previous calculations in this article, are set out in Table III. In that table I have followed the method of the committee, nut have not adhered strictly to the figures which would probably have been put forward by it had it published data relating to a 5-tonner, which, so far as I know, it has not up to now. The principal differences are that I have increased the residual value, which in the R.H.A. figures is to my mind insufficient, and have taken, as in previous calculations, onetenth of the net cost of the vehicle as applying in this respect.
I have spread depreciation over four years, instead of five, but that is because of the arduous nature of the work involved in the cartage of sand and ballast. I have takers interest at 4 per cent, on the initial value, and not 5 per cent., as in the R.1-1.A. tables.
There are two amounts for " contingencies " provided for in the Committee's tables. I have followed the lead thus set and included amounts which correspond with those in the published tables relating to a 6-tonner.'
Differences in Method
The principal difference in the two methods of costing is that depreciation is treated as a standing charge, instead of a running cost, and maintenance is divided, five-eighths of it being taken as a standing charge and three-eighths as a running cost.
The effect of this difference in approach to the question of costing is that the total of standing charges is increased, whereas that of the running costs is diminished. It will be seen that the cost per hour is now 7s. 10d., whereas previously it was 5s. 3d. On the other band, the cost per mile is reduced to a slight fraction over 5d., compared with 7.1d.
Adding 20 per cent. to these amounts for profit, I arrive at the charges which must be made on the basis of 9s. 6d. per hour for time and 6d. per mile for mileage. With those figures I have calculated rates following precisely the lines set out above and I give in Table IV the results of the calculations.
The figures in that table can usefully be compared with those in Table II. As might be expected, there is a large increase in relation to short leads and a slight decrease over the longer leads. That comes about because, in assessing the rate for the short leads, time is the principal element, whereas when the distance increases, mileage becomes more and more important and the cost per mile has a greater effect on the rates.
As we have increased the charge for time from 6s. 4d. to 9s. 6d., it is only to be expected that this will have a great effect on the short leads. On the other hand, the charge per mile is diminished from 80. to 6d., and that has effect on the longer leads. S.T.R.