PROBLEMS OF THE HAULIER AND CARRIER.
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The Time Factor in the Haulage Business—Estimating Charges Per Hour.
UNDOUBTEDLY, the taximeter would be a great boon to many hauliers if fitted to their vehicles and customers were agreeable to abide by the charges recorded. This instrument calculates automatically on a mileage and time basis, and charges whichever is the greater. A great deal of reckoning would be saved and many disputes concerning charges avoided. In the absence of such a labour saver, simple arithmetic must be resorted to by the haulier.
Calculation is not a very difficult matter, but the question of a basis upon which to work is always the fly in the ointment. Mileage is a comparatively simple matter to handle, as the odometer reading, multiplied by a suitable figure, gives the answer in cash. Often, however, the time aspect has to be considered, and either the customer or the haulier may insist on a rate per hour being charged.
A flat rate per hour can be a dangerous thing, and a number of hauliers find this out annually, to their cost. For the sake of illustration, let us take an instance. Many fail to grasp where losses occur:; therefore, a few moments spent in considering the matter will be well repaid. An inquirer raises the time question and I propose dealing with the Ford tomer, being the vehicle in which he is interested.
An Example of Imperfect Estimating.
For the sake of argument, let us take a cost per mile of 1s. 6d. or an hourly charge of, say, 9s. 9d. On a tradesman's round, for instance, the Ford may cover possibly five miles in an hour, stopping almost from door to door ; at the mileage rate the haulier gets only '7s. 6d., but 9s. 9d. if the charge be made on a time basis.
On the other hand, the vehicle may be used over country roads, 25 miles being covered in two hours. If charges per mile be made, the haulier reaps the sum of £1 17s. 6d., but only 19s. 6d. if an hourly price is charged.. As the Ford tonner costs 9id. per mile for operating costs, it can be seen that he actually loses 31d. on the job charged for on the hourly rate, the charge on time being 19s. 6d. and the operating costs 19s. 91d. From this example can be gathered the folly of fixing an hourly rate and applying it to each and every job as it comes along. In the first instance, it pays best to charge by the hour, but in the second a nasty loss is incurred if the same rate is adhered to. Time charges must be varied to suit the circumstances of the case; although mileage may not be mentioned
in the account, it is ever present, and the haulier must reckon with it, basing his time charges largely upon it.
So far, we have only investigated the effect of hourly charges on pro f& for one or two-hour jobs; what happens when work for a whole day or week is done on a time basis? In all probability the discrepancy between mileage and time charges will be less than in the case of small jobs. Why should this be? Principally because terminal delays crop up, the effect of the driver's meal times is felt, the ordinary business delays occur, loads are not ready, somebody has to be waited for, and so on, thus. reducing the distance covered. The smaller the mileage the greater the profit when a time basis is employed, provided the relationship between miles and hours has been correctly studied in the first case when estimating.
Quote Only on Knowledge of the Task.
When asked to quote per hour, a haulier usually
knows what type of work is in hand. If he doesn't, it is up to him to find out before committing himself in black and white. Is it a long, straight run out and home, oi is it a door-to-door job involving much waiting and a small mileage? In the former case, what is the average speed possible? How many hours will the job take and what amount of time will be spent stationary? The answers to these questions put together indicate how the charge per hour must be calculated. Obviously, the best way, if it be at all possible, is to charge by the mile or hour, whichever is the greater.
The reason for this can be seen in the following example, which is just a flight of fancy on my part.
A Ford one-tonner is hired to do a job at is. 6d. per
mile, carrying a mixed load of foodstuffs. The distance is 10 miles out, delivering at two points, and the vehicle then returns empty. It looks a nice straightforward job and the haulier agrees to is. 6d. a mile without hesitation, believing that the lorry will be. back home in about three hours and that he will then be free to use it on some other money-earning job. Without exaggerating matters, let us conjure up a picture of what actually occurs only too often in real life.
The lorry arrives at 8 a.m. and the driver finds no body about ; at 8.20 the customer arrives and gets busy hunting out the load. Other people call in at intervals, _delaying him, and it is not until 0 a.m. that the lorry is loaded, with the exception of one sack of flour. As often happens, this sack is anywhere but the place in which it is wanted, and search fails to reveal it until • 9.30 a.m. Away goes the lorry to un
loading point A seven miles away, which it reaches at five minutes past ten. The customer at A was told to expect his goods at nine o'clock, and, after waiting for three-quarters of an hour, he goes off in a huff, and does not reappear until 10.30. After expressing his views to the driver, he starts unloading his portion of the total, and actually completes the job at 11 a.m. The lorry then goes on its way, a further three miles to point B, which it reaches at 11.15 a.m. Here, again, the first delay has given rise to others, and the second consignee has become tired of waiting and left his warehouse locked up, a notice being pinned to the door stating that he will be back at 2 p.m. and has gone to his other premises a few miles away. There is nothing left for the driver to do but to wait. At 2 p.m. the owner of the premises returns and the remainder of the vehicle load is dumped ; the driver then proceds home, actually turning into the garage at 3 p.m. Altogether, seven hours have been spent on a 20-mile job, for which the charge, at is. 6d. per mile, will be only D. 10s. Had the haulier arranged to charge on a time or mileage basis, he would, of course, have sent in a till for 13 8s. 3d.—somewhat of a difference. The small account is foolish, in view of the fact that four extra hours of working timg, have been lost, possibly' upsetting other jobs on the same day. Because a vehicle may be used by a customer during time when it is not in request by others, it does not mean to say that the time lost, due to delays on the part of the customer, can be made a present to him; that time could usefully and profitably be employed by the vehicle owner ; therefore it is up to him to obtain a proportionate cash return.
An average series of figures to use as a groundwork Is 6i miles equals 1 hour, 40 miles a day, depot to
depot, and 51 days per week. These apply to comparatively small capacity chassis such as a tonner ; in the case of larger machines, the average speed is less, and calculations must obviously be amended. Overtime, including the services of the driver, must not be forgotten, as it is a distinct possibility in the case of many " time" jobs; extra will have to be paid for the driver's work, and the customer must be charged accordingly or loss will be incurred.
There is nothing greedy in the "time or mileage, whichever is the greater" principle; it is only sound business. You cannot afford to lose money one way or the other because of delays over which you have no control. Do not overlook the fact that it costs money for every minute the vehicle stands still; you must recompense yourself for this, in addition to the losses which you may suffer if a lorry be waiting at a customer's place for any reason, and you are thereby unable to work the machine on another job and earn money from another customer. S.T.R.