Building Up a Rates Schedule
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IN my previous article I dealt at length with the case of a haulier with a 3-tonner and a'5-tonner who wanted to know what his charges should be. The vehicles were petrol models, and having assessed rates for them I turned to calculating figures on the assumption that oil-engined lorries could be used.
This haulier was a B-licensee,, restricted to a 25-mile radius. He used the 5-tonner fol.* general traffic and the 3-tonner on daily hire to local councils. There was, he said, much rate-cutting in his area, particularly in connection with work for a rural district council and a county council.
I reached the following figures for time and mileage charges for the petrol 5-tonner: time charge, £17 7s. 2d. per week or 8s. 8d. per hour; mileage charge, Is. Old. Total revenue for a 40-hour week involving 300 miles of running should be £17 7s. 2d. plus £15 2s. 6d. for mileage. This amounts to £32 9s. 8d.
, For the petrol 3-tonner, the weekly fixed costs came to £15 12s. 10d., or 7s, 10d. an hour, and I reckoned the rate per mile to be I Id. If 300 miles are to be run in a week, the revenue must be £13 18s. 2d, for mileage phis £15 12s, 10d., that is £29 us,
Figures for Oilers
The oil-engined 5-tonner should earn £17 1 Is. to cover time charges, or 8s. 10d, an hour, plus 11d, a mile for 300 miles, which is £13 18s. 2d. The total is £31 9s. 2d. The 3-ton oiler should obtain £15 16s. 10d. for weekly time costs plus 9d. a mile, For 300 miles the .charge is £11 6s., making a total of £27 2s. 10d.
My correspondent's next question was concerned with the net profit per week to result in each case, To answer it we must go back to the make-up of the costs. First the petrol 5-tonner. The standing charges and establishment costs totalled £13 17s. 9d. and the running costs 10d. a mile, or £12 10s. for 300 miles. Total costs are thus £26 7s. 9d. The earnings, as recommended above. are £32 9s. 8d., and the profit is t h e difference £6 Is. Ild.
The petrol 3-tonncr's fixed costs are £12 10s. 3d. and the running cost 81d. a mile, making £10 18s. 9d. for 300 miles. The total is £23 9s., and B40 this deducted from revenue of £29 I Is. leaves £6 2s. profit
The 5-ton oiler has a time debit of £14 Is. a week, ant the running cost is 81d. a mile, making £10 18s. 9d. fo 300 miles. The total cost becomes £24 19s. 9d. The recom mended charge is £31 9s. 2d. and this would leave £6 9s. 5d profit. Fixed expenses for the 3-ton oiler are £12 13s. 6d arid the running cost is 71d. a mile, or £9 Is. 3d. for 30( miles. The total cost is £21 14s. 9d. and when this 1. subtracted from the recommended rate of £27 2s. 10d., sum of £5 8s. Id. is left as profit.
We next come to the hourly charges this operator shoul( make for daily hire. These depend upon the radii withic which he is expected to work. In towns, the radius i. usually about five miles, but in county councils' areas i may be as much as eight miles. The greater the radius the bigger the mileage per hour the vehicle is likely t( run.
Average Hourly Mileage
My experience is that the average mileage per hour o vehicles engaged in this class of work approximates to thc radius within which they operate. That is to say that the radius is five miles, the vehicle will probably averag4 5 m.p.h.
Therefore, in the case of the petrol 5-tonner the chargt should be 8s. 8d. an hour plus 5s. 21d. for five miles it Is. Old. The total is 13s. bid. For the petrol 3-tonne; the charge should be 7s. 10d. an hour plus five miles at 11d. which is 4s, 7d., making 12s. 5d.
For a six-mile radius, the charge for the 5-tonner shout( be another Is. Old„ making 14s. 11d., and for the 3-tonnei another 11d., making 13s, 4d. For an eight-mile radii]: the corresponding figures are 17s. and 15s. 2d. an hour On all these rates there should be an excess mileage charg( -1s. 2d. in the case of the 5-tonner and Is. for the 3-tonner My inquirer also wanted to know how to charge per tor for loads carried from one t( 25 miles. The first piece ol information required is du time needed for loading ant unloading, but he gave me ric help on this point. I assunu that the variety of the traffic is great and that the time therefore differ accordingly
S.T.R. is willing to give advice by post to operators who have reasonable problems in costing and fixing rates. It is essential, however, that he should be given full details of
What I propose to do is to apply average figures; I shall take 10 minutes per ton of payload plus i-hour for signing documents, turning round and so on, In this investigation I shall deal only with the 5-tonner. The terminal times will be I hour 5 minutes for loading or unloading, 2 hours 10 minutes per journey. Next we must compute the charge for these delays at the rate of 8s. 8d. an hour, and this works out to 18s. 1Gd. per journey or 3s. 9d. per ton.
I assume an average speed of 15 m.p.h., although I must allow for variations in this. Average speeds for short journeys tend to be much lower than for Jong trips. For a one-mile lead, the vehicle must travel two miles out and return and that will take eight minutes. The charge for that on a time basis is slightly less than Is. 2d, The mileage charge at ls. 0114. a mile is 2s. Id.,
so that the total charge, additional to the terminal charge, is 3s. 3d. For a 5-tonner that is approximately 8d. a ton.
These amounts-3s. 9d. for terminal delays and 8d. a ton for travelling charges—appear in the second and third columns of the accompanying table and are added in a fourth column.
It is next necessary to make correCtions because of low average speeds over short distances and another factor— which I have not mentioned so far. This is the tendency on drivers' part to increase the length of time required for loading and unloading when engaged on short-lead work.
There are several ways of allowing for these considerations, and the most satisfactory is to add what is called a weightage to the rate. Add a stated amount to the calculated rate for a one-mile lead, and diminish this amount as the lead distance increases. This weightage is shown in the fifth column of the table. It starts at is. '3d. per ton for the first lead of one mile and diminishes by Id. per mile as the lead distance increases.
At 16 miles it has been eliminated and thereafter hi. is subtracted from the calculated rate per mile of lead distance. This process obviously cannot be carried too far. At a lead distance of 16 miles the vehicle will probably attain an average speed of 15 m.p.h., but on journeys over longer distances the speed is unlikely to continue to rise past a certain figure.
S.T.R.