PROBLEMS OF THE HAULIER AND CARRIER.
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How the Cost of Beet Haulage is Reduced by Diminishing the Time Spent in Loading.
TN my previous article I calculated the cost of beet
haulage by what have been, up to now, orthodox means, namely, by five-ton lorries, loaded and maloaded manually. I went into this problem at length because I had received a number a letters advising me of an attempt to cut prices in that class of work. The complaints all Lad reference to one particular concern, which is, apparently, desirous of capturing the bulk of the beet-haulage eontracts in the eastern counties.
Readers must refer to the article in question for schedules of charges which have been quoted to me by various parties. All I propose to repeat from that article are the rates which my calculations showed to be reasonable under the somewhat difficult conditions which prevail in this branch of the haulage industry. I showed that for hauls of the following lengths3, 5, 10, 15 and 25 miles—charges equivalent to 3s. 8d. 4s. 6d., 7s., 9s. 6d. and 14s. must be made.
What Rumour Says.
I did not, in the former article, deal with the cut rates, those concerning which complaints had reached me. I propose to do so now, but must first of all decide how the work is going to be done. I have no definite information on the point, merely rumour, and everyone knows how apt rumours are to fly when a matter of this kind is under discussion. Credence is given to the most fantastic tales and to place reliance on them would be folly indeed. Out of the welter of story and surmise I have, therefore, chosen that which seems most likely—the firm considering the quotation of low rates preferring at present to keep its plans secret. I am going to assume that the report that 10-ton six-wheeled lorries are to be used has a basis of fact and that special elevating machinery is to be employed to reduce the loading time to a minimum. It is fairly reasonable to assume that one factor in reducing cost is the use of a bigger loadcarrying unit—I have emphasized the importance of that again and again—whilst the fact that this new haulage company stipulates in its contracts that the beet shall be placed by the farmers in certain agreed spots for loading rather lends colour to the view that some form of loading device is to be used.
Now I must work out a special formula for calculating the cost and minimum charge, just as I did in the other cases.
Assuming the use of steam wagons for the work, the running cost per mile is 8.66d. The standing charges amount to 1,978d. per week (£8 45. 10d.), which is equivalent to 3s. 9d. per hour. The time agreed upon as necessary to load five tons of beet is one hour, and half an hour for unloading. If this machinery for loading is any use at all it should do that work with a 10-ton load in half an hour. Assume that the unloading still takes three-quarters of an hour. Let us take it that the average travelling speed is still 12 miles per hour.
Each load will take an hour and a quarter to load and unload, that being a matter which is entirely independent of the distance that the load has to be conveyed. The cost of dealing with each load in that way will, therefore, be 1i times 3s. 9d., which is 4s. 9d.
How the Cost Works Out.
The cost per 'mile which the load has to be carried must now be worked out. It is twice 8.66d. (see the previous article for explanation), which is 17.32€1., plus twice the standing charge per mile, reckoning 12 miles per hour. An hour of this vehicle's time is worth 3s. 9d., so that one mile runs the owner into 31d. for standing charges alone. Twice '31d. is 7id., and the total cost of carting the beet for a mile (and coming back the same distance to collect the next load) is 24.82d. (nearly 2s. id.).
The amount of the establishment charges will depend, of course, on the number of vehicles runby the company and on the efficiency of the management. For the time being I propose to assume that they are the same as before, namely, ten shillings per week per
machine, plus a week each as a contingency fund.
I assumed in the last article that the owner of a fivetonner would expect to obtain a profit of at least 16 a week. That being so, I do not see how a man can run a 10-tonner for less than £10 a week profit.
The sum total of profit and establishment eharges, therefore, is £11 10s, a week, which is 5s. 6d. per hour, as near as makes no matter. To allow for this we must add 6s. 10id. to the loading cost and 11d, to the cost per mile (twice 51d.). That brings the figures
for loading and mileage to us. 71d. and 35.82d. respectively. (If we call the latter figure 3s. we shall not be so far out.)
Minimum Charges.
We are now in a position to state what the minimum charges must be to show the profit named in the schedule. For a three-mile run—the shortest named in any of the lists of charges which have been sent to me—the charge must be 115. 71c1. for loading and unloading, plus three times three shillings for the mileage. The total is 20s. 7id. for a 10-ton load, which is 2s. id. per ton, showing a very considerable reduction on the 3s. 3d. per ton which I showed to be the minimum for a similar trip with a five-ton load.
The formula for calculating this minimum charge for carrying a load any given mileage is 115. 7id. (say, 12 shillings) plus x times three shillings, where x is the length of the run, one way only, the sum to be divided by 10 to bring the result to a price per ton. For a fire-mile trip, for example, the calculation becomes 12s. plus 5 times 3s. (totalling 278.). divided by 10, which gives 2.7s., or 2s. 9d. per ton. Similarly for 10, 35 and 25 miles the minimum charges, thus calculated, amount to 4s. 3(1, 5s. 9d. and Ss. 9d. respectively. These figures are in very close agreement with the quotations put forward by the new company.
Cold Comfort.
It should -he noted that there is no allowance in the foregoing calculations for any extra labour charges for loading and unloading. These, as I showed in the last article, would make a difference, depending on the number of men employed, and modified according to theextent to which the employment of extra men in this way effects economy of time in loading and unloading. The additional cost would not, however, bring the minimum profitable charges anywhere near those which I have shown to be necessary in the case of smaller vehicles, capable of carrying only five tons at a time, and I am, therefore, forced to warn those many readers who have written to me concerning this matter that, given efficient management and the devotion of a careful eye to establishment expenses, there is no reason why these low prices should not show a reasonable profit. This is one of those cases where the application of scientific methods to a business not previously thought susceptible thereto is likely to have successful results, and the upshot will be that many of those who are unable or unwilling to apply such methods will find themselves out of business—or out of that business at any rate.
There is, however, many a slip 'twixt cup and lip, and there are plenty of snags which the new company will have to surmount before they settle down to a regular routine of profitable beet haulage. Many of those snags may be sufficient entirely to upset the scheme of operations, and it might easily be through one of these that the ordinary haulier, the kind of
man who has written to me about this matter, would come into his own.
.Trouble will, in a good many cases, arise over the question of loading. A clause in the 'circular letter from the new company reads: " . . we do not propose to call on the grower for any assistance in loading. The farmer's part will be limited to dumping his beet in an accessible place on or near the field, to be agreed upon between the grower and the company and in a manner also to be mutually decided upon. The loading will be done entirely by the transport company."
Where Opinions Differ.
Now, it strikes me that there are going to be many eases in which growers and the company will find themselves at variance over the 'reading of that clause and, in particular, over the meaning of the words, " . . . we do not propose to call on the grower for any assistance in loading." Readers who have had experience in beet haulage will agree with me in this : that there is a vast difference between the ideas of one farmer as to what constitutes loading assistance and those of another. In some cases farmers are helpful; in others the haulier has to do everything but get the beets out of the ground himself. Even -in the best of cases, however, the haulier usually has to enter the field for his load ; the farmer puts it where it is most convenient for him (the farmer). The experienced beet haulier is used to this sort of thing; he takes the rough with the smooth. He may lose a little on one job, where the conditions are difficult, but he gains correspondingly on another, where the circumstances are favourable.
Some farmers will see no difficulty at all in complying with the rules laid down by this new company illad they will raise none. Many, however, will find that the extra labour involved in putting the beet down in the place desired by the transport company will run them into such expense as entirely to nullify the saving which is going to be effected by the new rates. Again, there will be others who will be entirely unable to comply with this rule, and it is amongst these that the small haulier will find his clients. In brief, this invasion of the beet-haulage business is going to narrow the field for the small haulier and, therefore, intensify the competition between them. It should not have the effect of lowering prices, and any rate-cutting will not only be suicidal for those small hauliers, but will be playing into the hands of the new company.
My advice to the small haulier is to get busy now amongst his clients, find out what they are thinking and, in particular' to ascertain whether they have realized the importance to them of that clause in the contract which promises them that they need not give the company "any assistance in loading." Do not make the mistake of running down the new company ; give credit where credit is due, but do find out whether your customers know what is meant by depositing the
beet in some place " to be agreed upon." S.T.R.