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15th March 1957, Page 65
15th March 1957
Page 65
Page 65, 15th March 1957 — SAVE YOUR MONEY
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Which of the following most accurately describes the problem?

IHAVE frequently urged readers to provide for future expenditure. In this way a haulier can build up a fund . available to meet sudden items of expense, for exam'ple the cost of a major overhaul. To avoid financial embarrassment. it is wise to have money to hand when such occasions arise. A secondary result is that the haulier obtains an accurate impression of the real cost of Maintenance. Few operators know anything about this.

Maintenance costs usually increase year by year, growing . from practically nothing in the first year to three figures in

the year that a major overhaul is required.vehicle covering big annual mileages must entail expencliture upon repairs and replacements as well as routine.servicing.

Take a 7-8-tonner running 20,000 miles a year. As soon as it goes into service it begins to run up a maintenance account. According to " ' The Commercial Motor' Tables of Operating Costs," an average cost for maintenance is 2.39d. a mile. Of that amount, 0.57d. is debited against routine servicing plus provision for varnishing and repainting, leaving I.82d. to cover repairs, overhauls, renewals and similar attentions.

• Amount Per Year

In a year that is equivalent to about £150. If the driver is a good man and other conditions are favourable, the sum spent on maintenance in the first year might be no more than £25 or £30: Even in the second year the operator might not have to spend more than £60 or £70, so that for the first two years of the, vehicle's life the expenditure is £85-f 100.

At the most that is about 0.6d. a mile—much less than the average of I.82d. which I have quoted. I have found that even experienced hauliers are misled by that. They think that the maintenance cost is about id. a Mile instead of nearly 2d., and base their rates and charges accordingly.

In its third year of life, the vehicle will probably need a partial engine overhaul, plus other. work involving £60 or £70. The operator would therefore spend much more in the third year than in the first two years combined. It might be that in the fourth year, provided that the work performed in the third year was done.efficiently, the maintenance cost would again diminish. But it is certain that in the fifth year, by which time the vehicle will have covered 100,000 miles, a thorough chassis overhaul, as well as engine overhaul, body repairs and renewals, will involve substantial amounts.

Disregard Expenditure

If, instead of disregarding his actual and direct expenditure during the first two years, the haulier had made provision for a maintenance fund—by budgeting 1.82d. a mile he would not only have avoided the error of underestimating his costs and charges, but would also have the cash available for these repairs.

This brings me to another point. From time to time, an operator should check his budgeted figures for maintenance against actual expenditure and make appropriate modifications. The problem is to determine the period over which this should be done. The answer, I am afraid, is the whole life of the vehicle, right from ths time it is new to when it is scrapped. This means, of course, that a man who gets rid of his vehicles at the end of four years is likely to have a lower maintenance cost per mile than one who keeps a vehicle for five years.

Reckoning tyre costs does not entail waiting as long. It is reasonable to wait until two sets have been worn out. However, if maintenance arrangements are poor, tyre costs per mile will rise as vehicles get older because of the effect of worn king pins, bearings and bushes, and track misalignment.

Whenever a vehicle is put into commission, the cost of a set of tyres should be debited under the appropriate heading . on the vehicle's. cost-analysis sheet. This is because the tyres depreciate—wear out—quicker than the chassis. Making a deduction in this manner means that the accounts are properly balanced.

The direct cost of maintenance is not always of primary importance. It is often an economy to spend a little more than strictly necessary to save large sums. Some years ago I addressed a conference of commercial-vehicle salesmen and service 'agents and upbraided them about their lack of appreciation of the importance of giving quick service. I pointed out that it was essential for vehicle operators lo have broken-down vehicles back on the road in the minimum of time. Loss of use was expensive.

• Loss of Use This point was brought to my mind a day or two ago when a haulier was complaining of the joss of use he had suffered because of the poor service from someone who, to an extent,

was responsible for the maintenance of his vehicles. He reckoned that he was the Poorer by Over £100 because of dilatoriness on the part of his service agent. •

1 have often been asked whether the figures-I give in the Tables include provision for such contingencies.. The question is rather absurd; having regard to the amounts quoted in the Tables: They arc obviously inadequate in such circumstances, but I did, during the war, when spare parts were short, try to cover loss of use. I soon regretted it because the variation in the cost of loss of use between one operator and another was so great and it was impossible

to compute useful average figures. . .

Wise operators make provision against undue idle, time by using reconditioned units. If a fleet contains even only a small number of the, same type of chassis, reconditioned engines, gearboxes and back, axles are kept in stock as replacements. When this is not possible, the alternative is to use the facilities of the vehicle makers' local agent and arrange for him to be on call at the shortest possible notice.

Reason for Standardizing Indeed, I know more than one big _operator who ha; standardized upon a make of vehicle knowing that maintenance costs Would be higher than were other makes chosen, because the service facilities were so much better.

An allied question, is whether preventive maintenance is worth while. Preventive_ maintenance involves a schedule covering certain attentions irrespective of whether they are required or not. The alternative is to incur performing maintenance jobs when absolutely necessary.

The objection to preventive maintenance is that it is sometimes expensive and difficult to impose. The maintenance engineer may find himself in conflict with the traffic manager when vehicles have to be taken out of service for a routine inspection. Its advantage is that of the "stitch in time," saving loss 'of use whichcould-he extremely expensive.

Actually, the assessment of the -cost of loss of use is almost identical with that of a claim for loss of profits or earnings following an accident which immobilizes a vehicle for some time. The procedure is to set down a figure for total earnings, deducting savings in normal expenditure and

thus arrive at a figure for net profit.—S.T:R. '

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