What Terminal Delays Cost
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The Time to be Spent in Loading and Unloading is a Major Factor to be Considered When Assessing a Haulage Rate: "The Commercial Motor" Costs Expert Quotes Periods Needed for Various Materials and Shows How Overhead Expenses Must be Allotted
TIME, rather thah mileage, is often the determining, factor in the assessment of a haulage rate. No matter what the length of lead may be, it is generally appreciated that major consideration must be given to time in any calculation of costs and charges. The limitation of private-enterprise hauliers to a radius of 25 miles, however, has greatly intensified the impottance of the time factor, for the shorter the distance the greater the importance of terminal allowances in assessing the total rate. Generally speaking, most operators appreciate this and attach importance to the time involved, especially to the time liable to be lost. Only the minority, however, has an accurate knowledge of how important time is.
Consider the matter this way: there are four kinds of cost to be taken into account.' Three of these are related directly to time, and the fourth is not entirely free of dependence on time. The four kinds are: running costs, standing charges, establishment .costs and profit. (Profit is included as one of the items to be taken into consideration when assessing a rate, although it is not actually a cost
These standing charges are obviously related to time, and so arc the establishment costs.. Profit is usually assessed as a ratio to total cost, i.e., expenditure on running costs, standing charges and establishment costs, so that it is true to say that profit is largely measured on a time basis. Regarding the running costs, the actual cost per mile comprises expenditure on consumable stores—fuel, oil, tyres, spares— and depreciation, but is also related to time if ittakes longer than normal to run a mile. The cost of a mile at 4 m.p.h, is much greater than at 12 m.p.h.
Perhaps an example will help. Let us take a 6-ton oiler. The standing charges to-day approximate to £.9 per week. The running costs are about 9d, per mile. A fair figure
for establishment costs is £3 per week. Profit should be calculated at 20 per cent, of the expenditure on running costs. standing charges and establishment costs.
5s. 4d. per Hour
Assume a standard 44-hour week. The standing charges per hour are £9 divided by 44, which is 4s.; establishment costs, £3 divided by 44, which is Is. 4d. (both these amounts are assessed to the nearest penny). The total of fixed charges is thus 5s. 4d. per hour. The cost of running a mile, if it takes a quarter of an hour, is therefore 9d. for the ron,ping costs plus one-quarter of 5s. 4d., which is Is. 4d., and the total is 2s. Id. per mile.
The cost of running a mile at 12 m.p.h. is still 9d. for the running cost but only one-twelth of 5s. 4d., Sid., for fixed expenses, and the total is thus 1s. 21d. If the vehicle be running at 24 m.p.h., the cost per mile is 9d., plus 20.. which is hId.
Another matter in which time is of importance is in relation to the number of profit-making hours per week which the vehicle runs. I have taken 44 hours as the basis in the calculations above, but suppose that the operator can as a rule find only 40 hours profitable work for his vehicle. The standing charges per hour ,then become £9 divided by 40, which is 4s. 6d.; the establishment costs £3 per week divided by 40, which is Is. 6d.; and the total of fixed expenditure becomes 6s. per hour instead of 5s. 4d.
On the other hand, if the vehicle be at work for 50 hours per week, the cost is reduced. There are two ways of assessing this cost. First of all, and this is the usual way, take the £9. for standing charges and spread it over 50 hours, giving 3s. 7d. per hour Similarly, with the A36
establishment costs, £3 divided by 50 approximates to Is. 2d., so that the total is 4s. 9d. per hour instead of 5s. 4d.
There is often a good deal of misunderstanding about the treatment of a week which exceeds 44 hours, and, therefore, entails the payment of overtime to the driver. Some operators think that the charge per hour should be more when the 44 hours have passed so as, they imagine, to make up for the overtime payment. They are quite wrong. I can show this by dealing with the 50-hour week in another way.
The cost to the operator is in the first place 44 hours at 5s. 4d, per hour, which is approximately £12, but the remaining six hours cost him only 3s. 5d, per hour, that is, payment of the driver's wages at time-and-a-quarter. The other items, standing charges at £9 per week and the establishment costs at £3 per week, have already been paid for and are completed by the time the vehicle has run 44 hours.
Mileage is Governed It should be obvious that, given steady and continuous work throughout the week, the mileage covered is governed, to a large extent, by the time which must be spent in loading and unloading the vehicle. This factor is important to any haulier who is attempting to determine the basis of the charge he will make in connection with a contract for haulage.
Most readers of these articles know the times involved in loading and unloading goods with which they usually deal, but when asked to quote for some new business may be at fault in determining terminal delays. To help operators who are in that position, the following notes are set out relating to the time taken to load and unload various materials. Except where otherwise mentioned, it is assumed that the loads-are dealt with by one man.
Foodstuffs for cattle to be transported from the millers to farmers are a good example of agricultural traffic. In that connection, the oasis for the calculation of time spent on terminals is 1-hour per 5 tons each way—;hat is, that the time for loading is 1-hour, and the time for unloading is also I-hour.
Timber in planks and "pieces," as they are called, can be loaded at the rate of one standard in 11 hours and unloaded at the rateof one standard in an hour. The weight of a standard Of timber varies according to the kind of wood, but the usual figure for pinewood and material of that kind, as imported from Norway and the Baltic area, is about 2i tons,
The question of loading -and unloading times is a vexed one in connection with household furniture. The furniture itself forms a load which is of sufficient variety to involve great differences between the times taken for one job and another. In the case of a house of furniture, the time is governed partly by the distance that the furniture has to be carried from the house to the van, partlyby the work to be done inside the house, and by the layout of the house itself.
All these factors have again to be taken into Consideration when the furniture has to. be unloaded at the point of delivery. As a rule, three men are employed to deal with a house of furniture to-day. The time taken to load may be anything from 3-5 hours—usually nearer the higher figure. Unloading generally occupies about an hour less than loading.
Liquids collected in tankers are usually loaded by pump and delivered either by gravity or pressure. The loading
time is usually about 500 gallons per I-hour, or 1,000 gallons in 20-25 minutes; a.good proportion of the time is taken in coupling-up and preparing to' load, and. that is. why the time per 1,000 gallons is much less in proportion than that
to be allowed for 500 gallons. Unloading takes a little longer,,beirig usually at the rate of about 500 gallons in about 20 minutes and 1,000 gallons in 35 minutes.
-Hay in trusses of i-cwt. with three men at .work can be loaded at the rate of 2 tons per hour. Unloading does not take so long and a fair allowance of 3 tons per hour will be satisfactory.
As regards sugar-beet, the time taken to load varies with the position of the heap of beet. The time taken also vanes . according to the skill and experience of the loaders. Two Men should be able to load 5 tons of beet in about I-hour. Unloading may take only 10 minutes if the beet he unloaded by water jet, as is the case in most factories, and about the same time if the beet can be tipped. Each year, more and More provision to facilitate tipping is being made at the various sugar-beet factories, but the unloading may take I-hour for 5 tons if the beet has to be thrown from the vehicle into the silo.
Cattle are loaded usually in 1-hour: I am told that four or five stubborn beasts can be got aboard in• that time. Unloading takes only a few minutes as the animals will usually trot out quickly as soon as the ramp is down and the doors are open, and I-hour is usually ample. Both in the cases of sugar-beet and cattle, of course, part of the difficulty is the time lost in waiting turn. So far as sugar-beet is concerned, there is frequently a queue for the weighbridge and a queue for the Ella, where that is in use. Time is often lost in loadipg cattle and livestock because of the time spent waiting at the markets.
Flour, Bricks, Coal
Flour in bags can be loaded and unloaded at the rate of 5 tons per hour. This is the case when as is usual, there is assistance offered at each end.
Bricks are frequently loaded in thousands and 1,000 bricks may weigh 2.I-3 tons, depending upon the class of brick and the' part of the country where the bricks are made. The normal time for loading and unloading1,000 bricks is .1-hour, on the assumption that there is help available for both operations. Coal can be loaded from railway wagons into a lorry at the rate of 5 tons per hour. Unloading is usually by tipping and the time taken is negligible, provided that there is not a lot of manteuvring to get into• position. When coal is collected from the collieries, a vehicle is frequently loaded by chute and the' time involved is in waiting turn to get under the chute as it does not take more than a few minutes once the vehicle is in position. Road materials are another of those commodities where the time loss is not so-much that involved in actual loading. but in getting into position to load. The time necessary to deal with a load of hand-filled stone may be anything from 5065 minutes.
Tarmac, Machinery, Cattle Cake.
Tarmac takes longer, usually 11-11 hours, to load and unload. Chute-loaded Tarmac takes •-hour per load with allo-wanez for Waiting. Unloading road stone, when the burden is not tipped, can be effeeted'at the rate of 5 tons in
Machinery can be loaded at the rate of 8 tons in 2 hours,
and it takes about 24 hours to unload. •
Cattle cake in -1-cwt. bags can be loaded at the rate of 5 tons per hour, whilst the same weight can be unloaded in 1-hour. in all these cases, the figures given for loading and unloading are net, and unless otherwise stated there is no provision for delays involved in waiting turn to be loaded or unloaded. It may be of interest to take some of the figures for loading and unloading in assessing charges tobe made for haulage of that material. The first item on the list was foodstuffs for cattle. The time taken to load and unload this material is -'hour for each.
.1 will assume that a 6-ton oiler is used and will take the figures already given for the cost of operating such a vehicle, namely. £12 per week for fixed charges including establishment costs, and 94. per mile for running costs. A sum of £12 per week has been shown to be approximately 5s. 4d. per hour for a 44-hour week. • Take the case of a run of 10 miles between the mill and the farm. The vehicle will probably take one hour to do the double journey. That accounts for 5s. 4d. for time taken in travelling. Add another•5s. 4d: for the time taken to load and unload, and we have a total cost (with no allowance for profit) of 10s. 8d. for time, to which must be added the cost of 20 miles at 9d„ which is 15s. The total is LI 5s.. 8d.. which is approximately 4s. 5d. per ton.
In a journey of 20 miles, the travelling time will probably be IA. hours; the charge for loading and unloading will be the same as before, 5s, 4d.; the charge for l hours travelling time is 8s.; and 40 miles of running costs at 9d. per mile is 30s., giving a grand total of £2 3s. 4d., which is 7s. 3d. per ton.
In order to find the rate to he charged, profit at the rate of 20 per cent, of the actual cost shouldbe added, • which means that the rate per ton for the 10-mile haul should be 5s. 3d., and the rate per ton for the 20-mile haul 8s. lid. •
20 per cent. Profit It may be as well to emphasize that the method of calculation is to take the time for loading and unloading and then that for travelling, and to cost it on the basic cost per hour including establishment costs as well as standing charges for the vehicle. To that sum must be added the running cost of the vehicle for the distance involved, and. as already stated, a further 20 per cent. goes on to provide
a minimum reasonable profit.
An alternative way of dealing with the same problem is to add the profit to the cost per hour and the cost per Mile. If I take the figure. of 20 per cent. I shall have 6s. 6d. per hour as the time charge and approximately lid. per mile as the mileage charge. As a check on the previous figure, let me run through the solution of this problem taking the new basis.
For the 10-mile haul, there is one hour, at terminals and one hour travelling at 6s. 6d., which is 13s. To that must he added for 20 miles at 1 id., 18s. .44., giving a total of El I Is. 4d.. which as before is seen to be 5s. 3d. per ton. For the 20-mile run, there is one hour for terminals and IIhours for travelling, totalling 21, hours, which at 6s, 64. is 16s. 3d. Add for 40 miles at lid. per mile, LI 16s. 8d.. and we get a total of £2 12s. lid., which again
is 8s. lid, per ton. •
Short Week's Unfavourability I have already referred to the importance of taking the number of working hours per week into account when assessing rates, and the unfavourable difference which a short week makes to the earnings of the vehicle concerned. It is of interest to run through the calculations relating to an example showing how serious this can be.
1 will assume that instead of 44 working hours, the vehicle runs only for 30 profitable hours per week, and will assume that the vehicle is engaged on. the same I0-mile lead throughout the week. In a 44-hour week, the vehicle would do 22 journeys and as its earnings are. £1 us. 4d. per journey, the weekly revenue would amount to £34 9s. 4d. The net cost of operating comprises £12 per week fixed charges, plus 9d. per mile for 440 miles, which is £16 10s, The total cost is, therefore, £28 10s., and the net profit £5 19s. 4d.
If only 30 hours he worked per week, then only 15 journeys will be run. The revenue, still reckoning on the vehicle earning El I Is. 4d. per trip, will total £23 10s. The cost of operating will comprise fixed charges, still reckoning at £12 per week; plus the cost of 300 miles at 9d. per mile,
which is £11 5s. The total cost is, therefore, £23 5s. and the net profit only 5s. per week. S.T.R.