costing column Free delivery
Page 39
If you've noticed an error in this article please click here to report it so we can fix it.
• How misleading those two words can be! Obviously, somebody somewhere has to pay. So let us have a brief look at how some of the variations in transport costs can arise.
Traders can obtain transport services in various ways. The fact that organizations whost names are household words for efficiency use all of the alternatives—or a combination of two or more—indicates that no one method is superior to all the others.
In the end each trader must make his own choice and he should consider the factors peculiar to his goods and the competitiveness of his trade—in road transport terminology his traffic requirements. Then he can set about deciding what vehicles he needs and who should operate them.
In comparing alternative transport costs traders should realize that these can vary substantially directly as a result of the special features of individual traffics even though to the layman one lorry or van load may seem much the same as another.
Perishable goods, for example, may demand a higher standard of vehicle reliability to ensure delivery on time than less urgent traffic. If so, that higher standard will inevitably raise the cost. So, too, if the goods are easily damaged and therefore need additional precautions.
A special type of body may be necessary for particular flows of traffic. Though ideally suited to the traffic for . which they are built and justified on overall distribution castings they could increase actual transport costs. The initial price of the vehicle would be higher and most probably the subsequent operating cost.
In addition, the more specialized the vehicle the more limited the use to which it could be put. Therefore, unless the trader is assured that the basic flow of traffic will always be sufficient to keep a specialized vehicle fully occupied—which is unlikely—he would be wise to budget for a lower overall utilization than would normally apply for the more flexible platform vehicle.
The level of competitiveness in particular trades can also substantially affect costs. For example, a sound economic case might well be made for delivering a particular quantity of goods to a customer once a week. But if it is the practice of competitors to deliver smaller quantities more frequently then the trader will presumably have to conform or opt to withdraw rather than engage in uneconomic operation.
Whatever is his decision the all-important factor is that he should know just what variations in vehicle operating costs are involved in providing alternative levels of service. Such an assessment will certainly confirm that delivery is not free.