Eliminating the Need for the Classification of Goods
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LAST week I showed, in this feature, that it is possible to reduce to five the number of classes in a schedule of merchandise for transport by road. Even so, the difficulty still remains that, for the classification to be of any use, all the goods which may require to be carried by road must be enumerated and listed, each in its appropriate class.
That must inevitably result in the compilation of a " Classification of Merchandise" book equivalent to that publi.shed by the railway companies—something which should be avoided if possible. Unfortunately, with any such method of classification, it is unavoidable. What we must try to discover, therefore, is some new method which lacks that disadvantage.
Having that idea at the back of my mind, I at once fastened on that part of the Leeds Schedule published on pages 154-155 of " The Commercial Motor " "dated April 3, Which referred to rebates in traffic measuring less than 80 cubic ft. per ton. It seemed to me that there might be in that the germ. of a new method of classification of the kind which is wanted. Further investigation appears to show that the prospects;of success are not good.
First of all, 80 cubic ft. is taken as the limit of bulk for one ton. Consignments exceeding that specific bulk are to be charged for as follow:—
80 to 90 cubic ft. per ton 90 to 100 cubic ft. per ton 100 to 110 cubic ft. Per ton 110 to 120 'cubic ft. per ton. 120 to 130 cubic ft. per ton 10 per cent. increase. 15 per cent. increase. 20 per cent. increase. 25 per cent. increase. 35;5 per cent. increase.
150 to 140 cubic ft. per ton ... ... 50 per cent. increase. The increase is on the basic rates set out in the Schedule.1
No Advantage by Adopting System of Percentages Now, I do not understand the reason for this complicated system of percentages: I cannot see that it offers any
• advantage over the. old-established method of 'measuring any consignment the volume of which exceeds 80 cubic ft. per ton and reckoning every 80 cubic ft. as one ton. If it be bulky and the measurement is 400 cubic ft., then it is reckoned as 5 tons. Nothing could be simpler. Moreover, it corresponds with the method which has been used in shipping circles for generations, except that there the limit. is 40 cubic ft. per ton.
I should abandon that part of the scheme right away as
being an unnecessary innovation, involving complications without corresponding benefits.
It is with the other portion of the.addendum that I am at the moment concerned, wherein it is suggested that rebates be granted. In the case of traffic which is from 40 to 60 cubic ft. per ton a 71 per cent, reduction from basic rates is proposed. For traffic weighing at the rate of 60 to 80 cubic ft. per ton a rebate of 5 per cent, off basic rates.is suggested. It was when I read that clause that I hoped there might be in it a simple way to classify traffics—so simple that the need for enumerating and listing all kinds of goods would be eliminated.' Let us examine it with that in view.
. Only Two Factors Need be Given Consideration First, it should he recalled that I showed, in the preceding article, that it was really necessary to take only two factors into consideration in any classification of goods for road
• haulage—(a) loading and -unloading times,and -(b) value. Now, the factor " value " is ignored in the Leeds Schedule. That was stated by Mr. Harry Wood in the interview with " TheaCommercial Motor " representative. I am not, however, confining myself in this article to this Schedule, but am trying to find a solution of the classification problem on broad grounds. In any case, Mr. Wood and I are not viewing that factor froth the sarne standpoint. He is thinking -of -it in terms of insurance: I am considering it, to some extent, from the aspect of what the traffic will bear.
However, it may be simpler, for the time being, to ignore value and consider only loading and unloading times. If the method cannot he made to apply to that it is of no use discussing it further.
With the exception of the lightest of timbers, there are few ordinary commodities which come up to SO cubic ft.
per ton. Coke does, bat coke is not a long-distance traffic. The same applies to chicory, hay, straw, etc. Much of the traffic coming close to the limit is machinery and the like, packed in cases. That does take longer than usual to load and unload and, so far as that goes, the method may be said to apply. At the other extreme are such traffics as metal ingots, sheet steel, plain axles, gun barrels,, shell blanks, and so on, all of which are 10 cubic it. to the ton or less than that figure. Most timber comes within the 40 to 60 cubic ft. range, cement in bags, about 20 cubic ft., and paper about .35 cubic ft. Barrelled goods scale about 40 cubic ft. to the ton, and canned foods rather less. Potatoes, which are carried fair distances by road in peace-time, weigh approximately 50 cubic ft. to the ton, with new potatoes in boxes, about 60 cubic ft. Common bricks, also a " distance" traffic in peace-time, average about 18 cubic ft. to the ton. iron and steel sections, angles, bars—if of a length which can conveniently be accommodated on a lorry—will weigh about one ton for 10 cubic ft. Structural steel .work may he anything from 10 to 150 cubic ft. per ton. Grain and flour, in sacks, come between 40 and 50 cubic ft. per ton. Now, the classification according to cubic content provides for three classes (apart from the over 80 cubic ft. divisions which I do not accept as proposed). The top class, the bulkiest, is carried at basic rates, the others at 95 per cent. and 924 per cent, of basic rates respectively. It seems clear from the above references to the weights of materials that the vast majority of ordinary traffics will come in the lowest class. That, in a way, is something which may reasonably be expected. There must be one "
normal" class into which the bulk of road traffic will fall, and there is no logical reason—value of goods apart— why that class should not be the lowest rated.
Loading and Unloading Times Affect Rates Differentiation But are all these goods equally easy to load and unload? Are there not some which take considerably longer than others, thus justifying a higher rate, regardless of the fact tha„t the bulk is small? A good deal depends, of course, on the handling facilities which are provided but, assuming these to be what are usually experienced, then it must be admitted that the loading and unloading times for these several kinds of goods, all of which would come in the same class, vary, considerably—certainly enough to justify some differentiation in rates.
Timber, for example, takes approximately twice the terminal time sufficient for grain or flour in sacks, "and grain or flour in sacks twice the time of metal ingots. There does seem, therefore, to be a serious flaw in the plan for classifying traffic on the basis of cubic content. • There is, moreover, another defect in this scheme, considering the outcome, viz.: rates to be paid, on a cost-plus • profit basis. It is illogical to differentiate between the various classes on a percentage basis. The difference ought to be a flat rate per ton, for the effect on cost of a difference in loading time is a given amount per ton. It does not vary with the distance travelled.
A percentage differentiation, therefore, which might meet the case in respect of a short haul, would be excessive if applied to a long haul. One which would be satisfactory as applied to a long haul would be insufficient in application to a short haul. This can be demonstrated by example. 'In the Leeds Schedule a terminal charge of 2s. per ton is included. It applies, as it should, to all rates. It is stated that this 2s. is intended to cover the cost of the run from the garage to the loading point and other indefinable costs, as well, as times of loading and unloading.
It is quite possible for there to be 100 per cent, difference between terminal times for one traffic and those for another. Presumably, in the case of traffic needing twice as long,as the normal time, the terminal allowance would be 4s.
Now, the scheduled rate for a 30-miles lead is 14s. 5d. If 2s. be added for extra terminals that rate becomes 16s. 5d., an increase of approximately 14 per cent. The scheduled rate for a 200-miles lead is 52s. 3d. Add 2s. and it becomes 54s. 3d. The increase then is less than 4 per cent. Therefore, I maintain that the difference between classes may not be a percentage.
The Solution—Agree Upon a Rates Schedule Surely the solution of the problem is to have no classification at all. Agree upon a standard rates schedule: this Leeds Schedule can, for the sake of argument, be assumed to apply. The rates in that Schedule are to apply to most traffics, those which take the normal times to load and unload. That time allowance is to be clearly stated on all contract notes relating to all traffics, whether normal or not. Whenever the specified terminal times are exceeded, payment is to be made accordingly, on a demurrage basis.
Is this practicable? I think it is, provided agreement can be reached as to what should be the " normal " time to load and unload. The time must be reasonable and sufficient to avoid charging demurrage unnecessarily.
On the other hand, this time allowance must not be excessive. Time is most emphatically to be interpreted as money in the case of the use of a motor vehicle. Customers must, therefore, not he encouraged to detain lorries unnecessarily. Moreover, if the time allowance be more than is needed, there will be demands for rebates from those whose loading and unloading facilities are good. The provision of such facilities is to be encouraged, but the means to that end should be a general diminution of the terminal allowances in the basic rate, not the complication of rebates.
In some quarters an allowance of 20 minutes per ton has been suggested, at each end. That is much too long. In the case of a 15-ton load it would mean a total allowance, for loading and unloading, of no less than 10 hours.
In my view, an allowance of 10 minutes per ton, plus a further 15 minutes for turning round, signing of documents, and so on, is fair. That would mean, in the case of a 6-tonner, the provision• Of 75 minutes at each end of. the
journey-24 hours in all—for terminals. In the case of a 12-ton lorry the corresponding times would be 21 hours and 44 hours respectively.
It is of interest, in closing this article, to ascertain what those periods would mean, per ton, for terminal charges. A 6-tonner should earn 5s. 60. per hour, so that the total charge for terminals would be 13s. 9d., or 2s. 34d. per ton. A 12-tonner, two men up, is worth 1 Is. per hour. The terminal .charge should, therefore, total 49s. 6d., or
4s. lid. per ton. S.T.R.