TRANSPORT TIPS FOR TRADESMEN.
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Particularly Addressed to Those Who are Replacing Horsed Vehicles by Motors. or Contemplating So Doing.
IT IS never an easy matter to decide just how much ought to be allowed for depreciation of a commercial motor vehicle, and the problem is rendered even, more complicated at a time when. prices of vehicles are liable to fluctuate considerably.
Depreciation Allowance.
Depreciation ire due to a considerable variety of causes. Strictly speaking, it is from one point of view a running expense, inasmuch as it is occasioned by wear and tear directly proportionate to the mileage covered. The life of a vehicle can be more accurately measured in miles than in years. At the. same time, it is not correct to estimate depreciation purely on the basis of the mileage covered. Supposing this to be insignificant, the vehicle still loses value, becauseit gradually ceases to be of a thoroughly modern type. One might, of course, make an allowance for obsolescence as distinct from depreciation, but the two are usually included under the one heading,. This really means that our records of costs of operation are not strictly accurate. More often. than. not the whole depreciation allowance is put down as a otanding charge, whereas it ought, for thel'inost part, to be regarded as a running cost, though obsolescence is unquestionably a standing charge.
Then, again, we have the difficulty, already mentioned, of making proper allowance in view of any change in price that may be announced by the manufacturers. Supposing that the price of a vehicle of the type owned is reduced by 2100, it is clear that the selling value of the vehicle is decreased to a somewhat similar extent, •and it is not right that it should stand in the firm's books at a figure based upon it' first cost which is no longer correct. The owner of the vehicle in such circumstances is, undoubtedly, justified in writing off as a loss any amount by which the price of a new vehicle of the type owned may be reduced.
Changes of Value that Should Not Go t& Operating Costs. ,
At the same time, it would not be fair to charge such amount against a vehicle in a record of operating costs, when it comes to estimating such costs per mile or ton-mile and considering future developments in the light of them. Supposing one has paid £600 for a. vehicle, and the manufacturers, subsea quentiy, are able to market the same machine far £500 owing to increased output or reduced manufacturing costs, it would clearly not be fair to add this £100 to the cost of operation and then, as a remit, estimate the cost per mile at an outrageously high figure and decide on that account not to buy any more motorvans. The same argument, of course, applies equally, but in an opposite sense, when a change of price is up instead of down. There must have been cases a year or so ago in which, if the increased selling value of the vehicle had been credited to it, it would have been found that the cost of operation was something less than nothing. Thus, for purposes of accountancy, changes in value due to changes in the first cost of the type must be allowed for; but fur purposes of record, with a view to the moulding of future policy, these same fluctuations should be ignored, otherwise they will give false impressions.
Awards to Drivers.
The system under which • the Commercial Motor Users Association makes annually a series of awards to drivers is undoubtedly a good one. The:investigations which precede the awards are so comprehensive that in no case does it seem possible for any distinction to go to a driver who is not in the first rank ia his business. In the first place, it is highly improbable that any except first-rateedrivers arc given a chance of competing by the owners of their vehicles, and, undoubtedly, those who prove successful are, at least, among the best of the competitors. Whether it is possible to ensure that the highest prize always goes in reality to the best man is another question.
There issso much possibility for variation in the degree of opportunity given to various drivers for doing themselves the greatest possible credit. Some men must undoubtedly be handicapped by the nature of their work, which may compel them to give less attention. to their vehicles than they would wish or to ill-use the vehicles more or less in the matter either of speed or of load. On the whole, however, the scheme is certainly a good one. It provides a valuable incentive to drivers and must add to the pride in their work taken IV the successful men.
The Usefulness of the Bonus as an Award.
When we come to the application of somewhat similar schemes of awards to the business of the individual motor owner, we are on more difficult ground. The various drivers in a single fleet know a great deal about one another and about one another's vehicles. Any attempt to place drivers more or less in an order of merit would be likely to lead to a good deal of jealousy and ill-feeling. The men's oppertunities cannot be exactly equal, and luck must always figure to some extent in performance. The chances are that some men Will feel that, if they had had the fortune to be put in charge of other vehicles, the so-called order of merit would have been reversed. It is certainly desirable to offer drivers some incentive to good work, hut in the rase of the individual firm, it' is. far safer to make this incentiVe take the form of a bonus payable if a certain standard of performance is reached, and not try to differentiate too much between a number of good men. I do not know whether the Commercial Motor Users Association has. ever studied bonus systems with a view to summarizing the principles involved in the various schemes that have been tried and informing its members of those principles and of the degree of success that has accompanied their application.. If not, it seems to me that something useful might bedone in that direction. Many members-of the Associationtmust have tried bonus schemes with varying results, and, if all their experiences' were collected and analysed, the resulting statement should be of considerable value as a guide. Similar information would, no doubt, be forthcoming on application from America, where perhaps schemes of this kind have been more extensively, employed.