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15th May 1919, Page 15
15th May 1919
Page 15
Page 16
Page 15, 15th May 1919 — PRICE AND COST.
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Which of the following most accurately describes the problem?

The Influence of the Price of a Commercial Vehicle Upon the Cost of its Running.

THE PRICE of the commercial motor vehicle has unquestionably gone up. We may have to pay perhaps 2900 for a chassis which previously cost us 2600, or at least for the natural successor of that chassis. Now, in view of this fact, some people are apt to jump to the conclusion that the cost of owning and using the commercial motor vehicle has gone up -in like proportion; that is to say, 50 per cent. Nobody who reasons the thing out can really think this' but one hears the idea expressed somewhat in the following words :—" The price of the vehicle has gone up 50 per cent. Is it possible for commercial motor transport to bear such an extra charge and yet compete with other methods'?" The inference contained in such words is obviously that the 50 per cent, rise means that the money which previously .siifficed to finance a delivery department with three vehicles will now only suffice to finance a similar

• department with two vehicles.

:-First Cost and its Effect on Working Costs.

' Now, in order to find out what is really the effect of an increase in first cost and how that effect compares with other variations and with other costs, we must take rough figures representing something near the truth. It is not uncommon to allow five years' depreciation in respect of a motor omnibus or similar vehicle running about 100 miles a day, five days a week and 50 weeks in the year. In so doing, we put the life of the vehicle at approximately 125,000 miles. If we call it 120,009 miles, then any expenditure amounting to a penny a mile wohld. cost £500 during the life of the vehicle, or 2100 a year. If the cost of the vehicle has gone up by £250, we must allow an extra halfpenny a, mile on the average, for depreciation.

If the total working costs were approximately is. a mile, we should have to assume their increase to is. oid. This is an increase in the proportion of 25 to 24, or Approximately 4 per cent. If the rise in price had been 2300 instead of £250 then the rise in the costs per mile would not be more than 5 per cent., even if we put the total mileage to a somewhat lower figure than our original estimate.

If we work a 3-ton vehicle, first over good roads and then over bad for a, sufficient distance in each case, we might well find that the cost of tyre maintenance would average lid. in the first instance and 2d. in the second instance, showing a difference of a halfpenny a mile. Thus, the quality of the roads on which we work raay quite easily lead to the same increase in working costs as does a rise in the price of the chassis from 2600 to 2900, and this is thief even if we assume that the more rapid wear of the tyre is absolutely the only injurious effect of the inferior road surface. As a matter of fact, continual working on bad roads must almost certainly lead to an increase in the expenditure on repairs and maintenance. It will also lead to some increase in the fuel bill per mile, and it will probably necessitate a somewhat lower average speed,. which in turn puts up the cost per mile, 'because it means that the wages bill per mile is higher, since the wages are a constant factor .and will not be reduced with the reduction in mileage.

Altogether then, it would not be in the least out of the way to estimate an extra penny a mile due to using a vehicle regularly on bad instead of on good roads. In this estimate we do not use the word " bad " as applying to an unmade track, but only to our conception of a bad road from the point ,of view of this country.

If, then, we can so arrange matters that what were bad roads shall be reconstructed and made into good roads, we may fairly expect to effect a. saving which will balance twice ever an increase of 50 per cent. in the first cost of our vehicle. With present prices of wages, fuel and so on, we shall certainly find that, if we 'operate a 3-tonnei over adistance.of.about 8,000 miles a year (160 miles a week.) over somewhat hilly and heavy roads, our total wasking expenses in the-course of the year will not be less than about 2600, which was probably about the pre-war cost of the vehicle. Thus, in ai five year life the total figure involved in: our expenses account is not merely the price of the vehicle 'but about -six times that amount. We may, however, reasonably put the life of thavehicle at eight or nine years, which means that, even at the present first cost, the figure involved is still about six times the first. cost.

In other words, an increase in first cost only im-: plies an increase in about one-sixth Of the total cost. This evidently means that a 50 per cent, rise in first cost would correspond to about an 8 per cent. rise in total cost. We have, however, only put, our total mileage in this instance at about 60,000.

If we work under fairly favourable conditions, a good vehicle should certainly cover double this distance before it is worn out. Hence we get back to our original estimate of a 4 per cent. or 5 per cent. rise in operating costs, sresulting from a 50 per cent. rise in first cost. ,

Let us take some quite rough figures for the first costs of a 3-tonner working on fairly good roads. Suppose these amount to Is. a mile.' Now, some of the expenses incurred bear a direct relation to the mileage covered, but others—and notably the item of wages—do riot. Suppose that wages represent a quarter of the whole operating expenses. If, for any reason, we halve the mileage covered, we double the cost of 'wages per Mile. If that cost was about 3d., it becomes about 6d.

Dependency of , Efficiency Upon System.

Thus, by using our vehicles somewhat unintelligently so as to keep them not fully occupied on useful work we may easily run up the cost by no less than 3d. a mile. In so doing, we really fine ourselves an amount six times as great as that involved inspaying,the present higher price for the chassis. Hence, it becomes clear that, by scheming things out carefully, so as not to waste time unduly at terminalssor en route, and so as to keep the vehicle and its driver usefully engaged during the working day, we may quite easily save, during the life of the vehicle, a great deal more than the extra we are now called,up on to pay. The work of some vehicles is, of course, thoroughly well organized, 'hut there remains a very big percentage of motor users who could certainly effect a 10 per cent. improvement in mileage and in efficiency, by thinking things out carefully with a view to cutting down time wastefully spent in loading and unloading and in hanging about waiting 'for a load.

We realize easily enough that a 50 per cent. increase in the cost of a a somewhat serious matter; even though it may be unavoidable, but yet how many of us take the treuble really to examine our whole system properly from the point of view of efficiency?

Looking at the subject again from another angle, let, us take the fuel bill. Suppose we have 'to pay 2s. for a gallon of petrol and that a gallon suffices on the average for an eight-mile run. This means a fuel cost of 3d. a mile. If we can increase the fuel economy so as to cover 10 miles per gallon we shall have reduced the fuel cost to rather less than 2id. a mile. The difference between eight miles and 10 milesson a gallon is not infrequently merely a matter of proper carburetter adjustment or of the replacement of an obsolete type of carburetter by -a more modern and efficient one, better suited to use the somewhat inferior fuels now available. What percentage of commercial motor users have seriously gone into the possibility of increasing their fuel economy to this extent? Prohn3)1v the.e who have don so are comparatively few in number.

Fuel Qualities and Engine Efficiency.

Now, we know quite well tnat-we cannot get the best results with an interior and somewhat crude fuel if we use an engine, carburetter and induction system designed wholly with an eye to the use of a fuel of much higher grade. The gradual change for the worse in the quality of fuels has been recognized by designers, who have to some extent provided against it. Their methods of making this provision 'vary; but to take two examples, we have 'the Paterson system (shortly to come on the market) of interenanging'temperature with velocity in the vaporization of light and even very heavy oils, and we also have the system of causing the fuel to impinge upon a hot spot where the heavier fractions are vaporized. We have also various systems for heating the whole bulk of the fuel during its passage to the engine, and, arising out of one or other of these or a combination of the two, we have systems enabling paraffin to be used with fair succeesewhen once the engine has been heated up on petrol.

Let us compare a vehicle' costing 2600 and requiring fairly _good petrol for its'efficient use with a vehicle costing, say, 2900 and capable of using a fuel worth 6d. a gallon less and obtaining the same mileage with a gallon. Say that the distance covered on a gallon in each case is eight miles. The newt vehicle gives a saving of 6d. In this eight miles, that is to say, of id. a mile. Compare this with the id. a mile extra that has to figure in the accounts to balance the higher cost of the vehicle 'and we see that, when it comes to making up the accounts for the entire mileage of each vehicle, the new type and its fuel will have cost something like 150 less than the old type and its fuel, assuming-equal mileage and durability in each case. This comparison illustrates clearly the fact that, limn the user's poinf of view 'and assuming a he mileage of 100.000 miles for a substantial commercial vehicle, a 2900 machine does not have to be very much superior in efficiency to a 2600 machine in order to be the cheaper proposition in the long run. if the material used in its construction is superior, with the result that maintenance costs less; if a better springing system increases the life of the tyres ; if a modern carburetting system enables lower grade fuel to be employed and not merely for the most part wasted, then the extra cost is more than justified in the user's books.

Peace-period Operating Costs.

All this does not mean, of course, that it is rather pleasant than otherwise to have to pay £900 instead of 2600. What it does mean is that in practice the rise in first cost, considerable though it may be, will seldom, if ever, make any difference to the proper decision as to whether a motor vehicle ought to he purchased or not. A very slieht improvement in durability or in fuel economy will bring the balance level again.

. We are not going very far if we assume that, in one way or another, the peace period vehicle will be sufficiently superior to the pre-war model to make a difference of a id. in operating costs. In all probability the difference will be eonsiderably larger than this. Similarly,, if we pick up an old secondhand vehicle for, say, 2300, we may be justified because the lower initial expenditure happens to suit our pockets, but the net result of the transaction in the long run will probably Drove not to be as good as the purchase of a new vehicle, even at the comparatively high price now ruling.


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