'IONEERING for COST RECORDING

18th March 1955, Page 183

18th March 1955

Page 183

Page 184

Page 183, 18th March 1955 — 'IONEERING for COST RECORDING

Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

How "The Commercial Motor" Has Put Thousands of Hauliers on the Right Road •Since Its Inception by Giving Guidance in the Matter of Accurate Accountancy as a Basis for Profitable Quotation of' Road Transport Charges HE importance of operating costs has always been appreciated by The Commercial Motor. Its readers also have always had similar views on the same ject. Re-reading some of the early numbers of the 7nal makes that strikingly apparent. The question is: s came to the appreciation of that importance first, the mai or its readers? The answer to that is the same as one concerned with that time-worn question of the and the hen.

laturally, the early problems to which cost figures were solution often involved comparisons between the cost of 'sport by horses and that of motors. In that matter the kside haulage of imports and exports soon came into minenee. The value of horses in dealing with that kind raffle was high, and those who favoured the horse were strong position. Only by persistence and the comparison :osts were they eventually routed,

,t the other end of the scale came the method of deliverhousehold goods from door to door. An early and resting series of articles was one which had as its subject question of replacing horsed vehicles by small vans. In the rsc of a special series of articles in March, 1914, on use of light vans, the following statement of cost of ration was given:—

f interest in connection with those figures arc the high of pneumatic tyres, the low level of wages—LI per k—and the absence of the item "Tax." There was no in those carefree days.

y this time, "'The Commercial Motor Tables of :rating Costs" had been in existence about three years. Tables, however, were a long way from being as cornlensive as the modern issue. They consisted of a half1 of notepaper. but nevertheless were sufficient to meet needs of opevators at that period. An example of cost

of operation of a 4-ton lorry, set out in a manner similar to the above, gave a running cost as 10d. per mile.

A characteristic feature of the search for, and interest in, costs figures which still prevails is the concern of municipalities and their transport engineers. They arc not only seen to be cost-conscious themselves. hut in their willingness to pass on the information to [heir colleagues in other places arc always to be thanked.

A particular instance of this was the publication of costs of house-refuse collection as disclosed by the Heston and Isleworth council. Data given compared the cost of operation of three types: electric, steam and petrol. The cheapest was seen to be electric, at £333 per annum; steam came next at £338, and petrol the most expensive at £404. All showed an economy as compared with horse-drawn equipment.

Evils of Rate-cutting

In a weekly feature, " Answers to Queries," there was always at least one request for information about costs of operating a commercial motor of some description, It is of interest to note that, even at this early date, it was necessary to warn contractors that there were Other items of expenditure, other than the bare operating costs, to be considered when quoting for haulage. The editor considered it wise to warn these men of the evils of rate-cutting. As a roughand-ready rule for calculating the price to be charged it was usual, and sufficient, to recommend the haulier to charge double the operating costs in order to be sure of covering extra expenses and making a reasonable profit.

The problem of :be return load had already reared its head and the reader, asking the question about the rate to charge was warned: "We do not find it any advantage to recommend carriers to accept unduly cut prices; it really pays them better to keep their vehicles in their depots." Shortly after the outbreak of the lirst world war it was annouoced that the prices of commercial motors were increased by 10 per cent., with the prophecy that more • rises were likely to follow. A further step forward in the usefulness of the Tables came of a reader's suggestion that the items should be split into standing charges and running c41 costs and time and mileage figures thus provided. This was in October, 1914, the third month of the war.

Costs of municipally owned vehicles were argued at length, but it was shown that mechanical means were cheaper than horsed equipment. The rising costs of horses and fodder were used as arguments in favour of the motor vehicle.

The pros and cons of the ton-mite and the vehicle-mile as a unit of cost were discussed. The editor came down heavily against the ton-mile which, in most cases, had only academic interest. One instance of the use of the ton-mile was when the owner of a mixed fleet wished to compare the economic advantages of particular sizes of vehicle. The conclusion was: "Cost per ton-mile is the best check on the engineering side; earnings (or savings) per vehicle-mile are the best check on the efficiency of the traffic side."

The proprietor of a laundry produced figures for the cost of operating a 1-ton van showing a total of 5.23d. per mile. On that basis the cost per customer for two calls per week worked out at 41d., which he considered to be quite reasonable.

Carefully compiled information about the costs of road sweeping, embodying the experiences of three London boroughs, showed that the motor was much cheaper than horses. In Deptford, the saving was 6s. 3d. per mile swept. In Glasgow the overall cost of street sweeping by motordriven appliances was £3,500 per annum, saving £1,321 as compared with horse-driven machines.

What is Obsolescence?

The difference between obsolescence and depreciation as a costs item was outlined as follows: "Obsolescence is an entirely separate matter from depreciation. Under Treasury concession, the owner of a vehicle which becomes obsolete and which is replaced by a new and improved vehicle, is entitled to an allowance to the extent of the unexhausted (written-down) value of the obsolete vehicle, less any sum received from the sale, whether as a vehicle or as scrap. If the vehicle is not replaced by a new and improved vehicle, no allowance will be made."

A new field for the use of the motor vehicle was for agricultural purposes, and comparative costs of horsed and agricultural tractors were drawn in an interesting article which showed that whilst the cost of ploughing, using a horse-drawn double-furrow plough, was Ils, per acre, that cost was reduced to 6s. 9d per acre when a petrol-engined tractor was employed. It was noted that whilst the horses ploughed two acres per day, the tractor ploughed three. Other articles on the same subject followed.

The problem of the return load cropped up again in September, 1918, not, however, in its effect on costs and charges, but from the aspect of national economy. A description of the workings of a clearing-house establishment was published.

The editorial staff had, before the end of World War I, been deliberating the problem of the returning soldiers, particularly those who had been in the. transport side of the R.A.S.C. It appeared likely that the majority of the men would be considering putting to practical peace-time use the lessons they had learned overseas, lessons concerned with the operation of mechanical transport.

Budding Hauliers

At the end of 1918 there was a change in the inquiries so regularly dealt with in" Answers to Queries." Whereas formerly the questions in the main came from tradesmen operating their own transport, we call them C-licensees today, they were coming from men who were proposing to use their vehicles as means for earning a livelihood, by hauling for hire and reward.

Positive steps to guide and encourage the haulage industry, still hardly existent as compared with its position today, were taken. First, there was a short series of articles beginning with one entitled "Starting in Life as a Haulage Contractor," followed by another, 'Advice to the Haulage Coniractor," and then a series of seven, all described by the generic title, "Starting Life as a Haulage Contractor." An interesting and revealing article appeared in the (42

November 4, 1919, issue in which the cost of carriage of certain traffics by road and by rail was compared. Putting forward the figures for cost alone, the difference between the one system of transport and the other was £19 2s. in favour of road, being £10 5s. as against £29 7s. per consignment. The writer pointed out that, in the case of road transport there were other advantages which tended to weight the scale against the railway but which could not easily be calculated. He referred to the fact that for a consignment by road there would be a saving in packing and packing materials, and of repeated handling.

In January, 1920, there was announced a new feature, a series of articles entitled "Hints for Hauliers." In a leading article it was stated that the series was "intended to be of some use to all those interested in the haulage industry, but it is principally addressed to that large body of newcomers who, returning from war service, are applying the experience gained by them, as officers and men, in mechanical transport, and are engaging in the road transport industry...."

Basic Principles

The first of the series was published in the same issue and has continued unbroken to the present day. The title has changed from time to time, and is now "Solving the Problems of the Carrier," and the objective, at least in the sense that it is not for men returning from war. It is still, in its basic principles, directed towards the education of the small operator.

Up to March 23, 1926, the half-page schedule of operating costs had been deemed sufficient for all ordinary purposes, but at that date a big departure from what had been regarded as almost sacrosanct was made. An entirely new plan was put into operation whereby the reader could tell at a glance what his net costs amounted to according to the weekly mileage his vehicle covered. The format was altered and the presentation of the figures revised so that the operator of every known type of vehicle could find, at one glance, information concerning his particular machine. The Tables assumed the form of those presented in the edition now current.

The following incident shows the faith and high regard in which the publication is held. A Mr. A, we shall call him, was concluding the formalities whereby he had bought the haulage business of Mr. B. A copy of the Tables was on the desk of the seller, Mr. B. The buyer, noticing its presence, jokingly said "Surely Mr. B, you do not take any notice of that thing?"

" Well," said the other, "1 have built up my business on the basis of the figures in that book, and you arc now giving me £10,000 for it. So what?"

Lecture Tour It should be observed that the policy of The Commercial Motor from its earliest days has always included some measure of assistance for the small operator. The Tables and the weekly article on the subjects of costs and charges were complementary. In 1933, however, a third measure

havirg the same object in view was inaugurated. In co-operation with the two associations which catered for the needs of commercial motor users, the Commercial Motor Users' Association and the Associated Road Operators as They then were, a series of lectures was arranged, having as their objective the education of hauliers in the matter of cost-keeping and the application of knowledge. of costs to the problem of rates assessment.

A preliminary try-out was made in Cambridge and was not a howling success. The problem was attacked anew and the first real lecture was one given at Northampton. During the course of the series practically every area of the A.R.O. was visited and most centres of the C.M.U.A. No fewer than seven lectures per week, one of them on Sunday, were delivered in the northern area. Attendances varied: the largest was at Newcastle, when there were over 200 present, and the smallest at Slough, where there were eight. The work continued until the outbreak of war.

This is the end of the story, but certainly not the end of the endeavour. S.T.R.