STARTING LIFE AS A HAULAGE CONTRACTOR
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One-Man One-Machine Businesses; the 5-ton Steamer and the 2-ton Van.
LAST WEEK we dealt with the case of the Owner of a light van, and sketched in outline a scheme whereby a man of comparatively small means could, with a suitable choice of locality, make a very 'good living with his van by acting as a country common carrier. In the course of that article, in which we dealt in detail with a typical example of such working, we' stated that methods of calculating fair charges tor the work were the same in principle with all classes of vehicle and in support of that we may now turn to the consideration of the working of a motor vehicle -which, in regard to its size, lies at the other extreme end of the scale, namely, the 5-ton rubber-tyred steam wagon and trailer.
Operating Radius of a Contractor.
There are uses for this type a vehicle in all industrial centres, but perhaps nowhere are they in such high ,favour as in Lancashire and Yorkshire. Now it is not necessary for the owner of one of these vehicles to be domiciled or to make his headquartera in a city or large industrial town of the first rank. When one thinks of Lancashire from the industrial point of view, it is generally in terms of Manchester. or Liverpool, or both. These, however, are but the Centres, and a large percentage of the carrying trade in connection with these two cities is done between them. and smaller industrial towns within a radius, from them, of 20 or 30 miles or so.
Let us suppose, for example, that our prospective -motor owner resides at Wigan. It is almost certain that he will, in those circumstances, be able to fix up contracts with the cotton mills which abound in that particular town for loads between either there .and Manchester, there and Liverpool, or alternatively to those cities. Be should be able to book, on an average, three journeys per week, the distance far the return journey lacing, in either case, approximately. 45 miles, which, for a steam wagon and trailer, is a day's Work.
Our reader will, therefore in the first place, before committing himself to any extensive capital outlay, interview the managers of seine of these mills and endeavour to obtain promises from them of such contracts. We shall show that if he can rely, with certainty, upon work for three days in the week, then he will have no difficulty in making the business • pay. Any other additional work, which should very easily be obtainable once he becomes known—such work, for example, as bringing in coal to the mills from outlying colliery companies, the conveyance of machinery between local engineering works and collieries, or local engineering works and the mills, etc.—will help 1 o bring " grist to his mill " and find occupation for him and his machine during the other two or three days in thm week when his contractual obligations do not call for his services.
Arriving at Contract Prices.
The capital outlay for a new steam wagon and trailer will he about :ELM, which will include the cost of a few essential .spares and some garage fittings which the experienced hand,will undoubtedly feel are necessary. Confining ourselves to the three days a week, the running costs are 10.85d. per mile (9.)6d. for the wagon, and I.69d. for the trailer), and for 135 miles, £6 2s. 4d. The 'standing charges will be made up a little differently from those of our schedule.
We will for the moment leave out the item of driver's wages, since we are presuming our owner ' intends to drive his wagon himself, and we shall have to set mit the full wages of the mate, say £2 10s, a week. Adding the last three items of the standing charges, namely, rent and rates, inSurance and interest, for a 5-ton steamer and trailer,. we obtain 682d., or 12 16s. 10d. The total standing charges for the week arrived at in this manner are a:5 6s. 10d. Add .t.2 40s, for wages of mate; and
£3 5s. for himself and we arrive at the grand total of working costssof 111 is. lad. Ile must make a profit on his capital outlay, also consider contingencies, and the possibility of having to hire a vehicle -to enable nim to carry out his contracts notwithstanding that his cam machine is temporarily laid by. If we assume that ra per cent. on his outlay would cover -this, it would involve him in another .13 5n per week. For the business to pay on these contracts alone; he mustmake this total of £14 Gs. 10d,during those three days.
This would be the basis of his contract price for the work. Assuming he could get £15 it would pay him, and the rate is equivalent" to 2s. 3d. per mile. Even half-sacrown, it will be agreed, is a very moderate charge for this class of work, and 'our
• contractor may, therefore, look to recouping himself whilst carrying out this contract, and at the same time, having the remainder of the week in which to look out for fresh 'businessand prepare 'to expand his interest.
Classes of Work..
. We now come lower in the scale of capital outlay, and consider the case of a purchaser of a secondhand two-tonner, capital outlay, say, £300, plus about £100 for spare parts, overhaul, and as a contribution towards early replacement of tyres, which will in all probability be necessary in the case of a two-tonner bought secondhand at the price named. In an ,example which was put before us, the prospective contractor had offers of work on the following lines to deliver 26 tons of coal from a central depot in two-ton lots amongst customers all residing within a radius of three miles; the collection. from a wharf of 16 tons of fiourdistance of wharf, to depot two miles, and for the remainder of 'the week the work of delivering miscellaneous parcels, all, again, within a three-mile radius, • The coal being already bagged, probably a quarter of an hour will suffice for the loading, quarter of an hour for the run out, half -an hour to deliver, and another quarter of an hour back-1i hoUrs for each load. Calculated on an eight-hour day, this is six loads per ,day, say, the whole 26 ton's, 13 loads, delivered in two days. As this iS Within a three-mile radius, the maximum mileage would be 78. Let us assume 70.
Now, as to the .flour : 16 tons, or eight loads. Assume quarter of an hour at each end for loading or unloading. The journey is only two miles each way, and probably three-quarters of an hour would suffice for collectingaand delivering each load.' The whole contract could, therefore, be delivered in six. boors. The total mileage delivering the flour is 32. New as to the parcels a theseare of all kinds, the maximum being about,r100 Lbs. weight: Let us assume an average of 50 lbs. each; that is to say, 90 will go "to' a full load, It will probably take at least an hour to load these at headquarters. Allow three minutes for the delivery of each parcel—experience has shown this to be a good averagetotal
270 minutes, or hours for delivery. Five and a half from eight leaves two and a half hours, and assume a maximum speed on the average of 10 miles per hour, the distance travelled will be 25 miles per day, for two days. This is an estimate only, of course, but it agrees closely with actual practice. For the moment we will leave Saturday act of the question and assume only five days to the week. Total of
running charges 70, pIus 32, plus 25-127 miles at 8.47d. per mile, 24 9s. 6c1. Standing charges 24 14s. 4d., including an item of wages for the driver of 23 a week : grand total of working costs, 29 3s. 10d, Add 15 per cent. on the capital outlay, as .profit on the investment and allowance for contingencies, as stated in .the case of the steam wagon—say 25s. per week, or 210 Sis. per week in all. The average charge he will make in order ° to get this return would be 42s. per day. Total for the coal, 84s. or approximately es. 6d. a load, a moderate charge; 4.2s. for the flour, and, as regards parcels, either charge 425. a day or an average of 6d. per parcel.
It is of interest to note how much more profitably this work could be done with a three-ton vehicle. The coal and flour could easily, with this size chassis, be delivered in two days, and we can assume that the same price could be charged, that is to say, a total of 2,6 6s., leaving three clear days for the parcel carrying, and probably 120 a day of these could be delivered, still assuming 6d. per parcel, thisbeing equivalent to another 29, total income 215 Cs. Total outgoing, running charges i 70 mites, plus 32 miles, plus, say, 70 miles-172 in all—at 10.2d, per mile, equals 27 6s. 3d. Standing charges 25 13s. Total 212 19s. 3d. Excess of income over expenditure 22 6s. 9d. and the item for expenditure includes
23 5s. wages to the owner-driver, whilst 15 per cent. as a profit on investment and for contingencies :on 2600 is 36s, a week. It will be seen that this compares very favourably indeed with the return from the two-toriner, as in addition to allowing the driver an extra Ss. a week, the excess of gross profit over the 13 per cent. which we have agreed to be a minimum is 10s. .9d. a week.
The reader must be careful to note that in these two examples, as in the one given last week, no allowance is-made for what is termed " overhead '' or establishment charges. • As described, these businesses are essentially of the one-man, one-machine class. The owner is .presumed to carry his office under his hat. If and when the provision of a small office becomes necessary, or even advisable, then the expenses of that office, rent, interest on outlay on furniture and fittings, depreciation of the same, telephone charges, wages of office .staff, lighting, rates and sundries, must all be calculated, reduced to. a matter of pounds,shillings and pence per week, and added to the Standing charges-for the wagon. With, a single vehicle it may be possible to manage without, these luxuries. 'So soon as the contractor adds a second machine to his " flat," some office exPenditure and overhead charges become unavoidable.