Economic of Reta lCI ivery

14th September 1962, Page 102

14th September 1962

Page 102

Page 103

Page 102, 14th September 1962 — Economic of Reta lCI ivery

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Comparisons of the operating costs of two-, threeand four-tonners show savings to be made by maximum utilization EFFICIENT traffic control is essential to successful transport operation. Careful planning and scheduling of journeys are universally accepted as essential by users of both passenger and goods vehicles. There is, however, a tendency to be satisfied with a more spasmodic method where the smaller types of goods vehicle are concerned, consisting mainly of small vans or platform lorries of limited carrying capacity—say three or four tons.

Whilst many such vehicles are primarily acquired and operated to undertake urgent journeys at short notice, there is nevertheless a need from time to time to review the use made of such vehicles. Unless this is done the expense of running these vehicles, although small in size, will prove excessive.

In particular, a critical review as to the genuineness of the alleged urgency of many of the journeys should be made. It may well be found that in many instances advance notification for a vehicle could, in fact, have been given. If so, a planned and more economic day's work could have been organized for the vehicle concerned.

To achieve planned journeys some form of traffic recording is necessary. Unfortunately, in contrast to the recording of engineering and costing information when some standardization is possible, traffic recording is largely peculiar to the operator concerned because of the type of goods he may carry. Consequently any recommendation as to the form which traffic recording should take must be largely in general terms, to be amended subsequently to individual needs.

.ASSUMING the operator receives orders from his customers (or other departments of his company in the case of ancillary operation) on a daily basis, it will first be necessary to devise a form on to which the initial instructions will be recorded. Such a form can be conveniently combined with subsequent invoicing and rendering of accounts for the service provided. Consequently the original instructions—whether received by telephone or other means—must necessarily be at least in duplicate and, in practice, three or four copies are not unusual, The -first copy will remain with the traffic Office to provide the basis for organizing daily journeys for the vehicle concerned, whilst the second copy might take the form of a delivery note on which the driver will obtain a signature from the customer confirming receipt. The third copy could remain with the accounts department, -whilst the fourth, with charges subsequently added, might be attached to the customer's monthly statement in verification of the total.

In many trades and industries it is usual to receive orders for delivery of goods over extended periods of time. UnforF14 tunately for transport operators there is a growing tendency fo more and more customers to demand immediate delivery, oftei within 24 hours. But nevertheless there are still sufficien advance requests for delivery at a later date to justify provisioi being made in any traffic recording system for such orders. Just how extended the period is will be dependent upon th type of traffic handled; but in many cases the basic workin arrangement sheet on which such requests are summarized i devised conveniently to cover one week. Such an arrangernen would not, of course, preclude future weekly sheets bein already drawn up on which to record more advanced request

HAVING decided on a weekly working arrangement sheet the actual starting day might have to coincide with the workio week of the company concerned. Where this does not appI and it was customary to load vehicles the night before for th following day's delivery, it might be found convenient for th purpose of traffic control to commence the working arrange ment sheet ona Saturday when many of the vehicles might loading for Monday's delivery and so, in effect, commencio the following week's work.

The working arrangement sheet should be of ample proper lions so as to allow the convenient recording of delivery detail in any of the seven vertical columns corresponding to the day of the week, assuming the possibility of some Sunday work 01 occasions.

Where more than one vehicle was operated and differen types were employed of varying carrying capacities, the vehicle should be listed horizontally on the left side of the form, ii ascending order of size.

The entry of traffic requests onto a form laid out in thi manner would provide the basis for building up an economi day's work for each of the vehicles concerned. On completioi of entries, individual instructions to drivers can then readily la extracted from the weekly working arrangement sheet.

The operating costs of two-, threeand four-tor good vehicles, all fitted with oil engines, are now given. The result obtained indicate not only the comparative costs of operatio these three sizes of vehicle, but also the opportunity fo economy if journeys formerly undertaken by two small vehicle can be consolidated on a larger vehicle by more efficient traffi control, The smallest of the three vehicles, namely the two-tonnet will be assumed to have a van body with a total initial cost o £1,031. With an unladen weight of 2 tons 4 cwt. the annua licence duty will be £33. This is equivalent to a weekl standing cost of 13s. 3d. on the basis of a 50-week year tl

allow for two weeks .a year when the Vehicle may be off the road for major overhaul or driver's holidays.

In all three examples it will be assumed that an adult driver is employed and that the total cost of wages to the employer is £10 Os. 6d. a week. This includes allowances for contributions to National Insurance and employer's voluntary liability insurance, and an addition in respect of driver's holidays with pay. The third item of standing costs-rent and rates-will be nominally assessed at the equivalent of lls. 2d. a week. .

For the purpose of vehicle insurance it will be assumed that ancillary operation in a medium risk area is involved, and that consequently art appropriate premium of £27 5s. a year will he payable, the equivalent of 10s. 1 Id. a week. Interest charged at a nominal rate of 5 per cent. on the initial outlay of £1,031 adds £1 Os. 8d. a week.

The total for these five items of standing costs is therefore £12 16s. 6d. a week. This amount will have to be met irrespective of the extent to which the vehicle is operated, or even if were not operated at all As emphasized in the series last week, this factor has a substantial bearing on economic operation of commercial vehicles. Continuing under-employment can prove increasingly expensive to the operator. Thus, in this instance, the standing cost per mile when averaging 300 miles a week is 10.26d. At 400 miles a week it is reduced to 7.70d.

Assuming fuel oil is purchased in bulk at 45. 1.1d. per gallon and a rate of consumption of 24 m.p.g. is maintained, the fuel cost per mile will be 2.07d. Lubricants are estimated to cost 0.25d. a mile.

With a set of tyres costing £85 and a mileage life of 30,000 being obtained, the resulting tyre cost per mile will he 0.68d. Maintenance, inclusive of washing, servicing and repairs, is assess..d at 2d. per mile. With an appropriate allowance of obsolescence, depreciation adds 2.22d, a mile. A vehicle life of 100.000 is assumed and the balance to be written off is calculated to be £843. This is obtained by first deducting the equivalent cost of the original set of tyres from the price of the vehicle, followed by an appropriate deduction in respect of the residual value, here reckoned as the equivalent of 10 per cent, of the original cost.

THE total for these five items of running costs thus amounts to 7.22d. per mile, or £9 Os. 6d. a week when 300 miles are averaged. The addition of standing costs and runnine costs results in a total operating cost of 17.48d. per mile or .1.21 17s. .a week.

If. however, 400 miles per week are averaged by the 2-tonner the following adjustments to the operating costs will be necessary. As already stated, Whilst the standing costs remain the same at £12 16s. 6d. a week, the corresponding cost per mile is reduced to 7.70d.

. The first three items of running costs-fuel, lubricants and tyres----remairt the same, but maintenance is reduced to 1.60d. per mile. This is because it is assumed that washing is done at ..-egular intervals (say, weekly) with the result That the proportionate cost per mile, diminishes as the average weekly mileage increases, Depreciation is also reduced to 2.02d. as, because of the increased mileage, no allowance is now considered n ecessa ry, for obsolescence. .

As a result of these adjustments the total running cost becomes 6.62d. per mile or .£11 Os. 8d. a week, and the operating cost 14.32d. per mileor £23 .17s. 2dr a week when 400 miles are averaged. If will be noticed that the additional 100 miles are operated at a further cost of £2 Os, 2d., a notional operating cost per mile of 4.82d. as compared with 17,48d. per mile when averaging 300 miles a week.

Appropriate to their larger size, it will be assumed that the three-ton and four-tonplatform vehicles average either 400 or 600 miles a week. The three-tonner is reckoned to have an unladen weight of 2 tons 8 cwt., with a corresponding annual licence duty of 136, or 15s. 3d. a week. Wages remain the same at £10 Os. 6d. whilst rent and rates are adjusted to 1 Is. 10d. a week.

IN the previous example C-licence operation was assumed relative to vehicle insurance: For .the two platform vehicles A-licence operation is assumed, with a resulting higher annual premium of £87 12 Od., the equivalent of 1 15s. Id, a week; Because of the platform body, however, the initial outlay is slightly less than that for the 2-ton van, namely, £1,005, with a corresponding reduction in interest charges to Os.ld. At 400 miles per week, this gives a total standing cost of £14 2s. 9d. a week or 8.48d. per mile.

With an increased rate of fuel consumption of 22.5 m.p.g. the fuell cost becomes 2,21d. a mile. Lubricants are again reckoned at 0.25d a mile and tyres at 0.74d., because of the increased cost per set, namely, £93. Maintenance is now reckoned at 1,76d. a mile and depreciation at 1.30d., on an estimated vehicle mileage life of 150,000.

This gives a total running cost of 6.26d. a mile or £10 8s. 8d. a week. Total operating costs become 14.74d. a mile or £24 I Is. 5d, a week, when 400 miles are averaged.

At 600 miles per week, with appropriate adjustments as before the total. operating cost becomes 11.77d. per mile or £29 8s. 3d. a week, In this ease the additional 200 miles is now being operated at a notional cost per mile of 5.81d.

The four-tonner is reckoned to cost £1,132 and have an unladen .weight of 2 tons 14 cwt. With appropriate increases in respect of licensing, rent and rates, insurance and interest the total standing cost is £14 9s. 10d. a week or 8.70d. per mile at 400 miles a week and 5.80d. per mile at 600 miles a week.

With an average rate of consumption of 21 m.p.g. fuel cost per mile becomes 2.37d. a mile. Tyres are reckoned to cost 0.95d. per mile, maintenance 2.03d. and depreciation 1.44d. This gives a total running cost of 7.05d. per mile or £11 15s. Od. per week. Correspondingly the total operating cost per mile is 15.75d. or £26 4s. 10d. a week at 400 miles a week. These latter amounts are adjusted to 12.70d. a mile or £31 14s. 10d. per week at 600 miles a week. The additional 200 miles are now operated at a cost of 6.60d. per mile.

It will also be noticed that where, by more efficient traffic control, the four-tonner can undertake the work done previously by bothl two-tormers (and even assuming the fourr-tormer had to Operate the total mileage of the two smaller vehicles, namely, 600, which in practice would be unlikely) a saving of nearly £12 per week would be achieved.

But however efficiently a vehicle may be selected, operated and coSted, inadequate traffic control, particularly where demands arc excessive, can more than cancel out any benefits thereby derived. S.B.

Economic of Reta lCI ivery

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