Rates for the Jobbing Haulier
Page 66
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Charges for a 3-tonner Covering 240 Miles a Week Under Contract : How to Arrive at Profitable Rates for Higher Mileages THE accompanying table is the result of an attempt of mine to help a haulier who has for some time been under contract to a customer and operated a 3-tonner over 240 miles a week. The haulier was charging Is. 9d. a mile. This customer now wishes to add to the weekly mileage not by specific amounts but by distances up to 480 miles.
The customer still requires rates quoted on a mileage basis. He evidently has some idea about the costs of operating vehicles and realized that, provided the hours of work do not inciease, the charge per mile should fall as the weekly mileage rises.
The haulier feels that the customer is well worth pleasing with a schedule. Such a schedule runs on a sliding scale and the operator was at first inclined to refuse to work on these lines. I persuaded him that the customer was "always right," and advised him to set about calculating his rates in the form that the customer wanted them.
Such a schedule needs to be assessed only once in a long while. It takes only a short while to work out, after which it can remain unaltered until major changes in cost make revision desirable.
The haulier was earning £21 2s. Id. under the contract.
I do not understand how he got the odd 2s. Id., for at Is. 9d. a mile the earnings for 240 miles should total £21. However, he has given me that figure and I have to accept it.
Building Up a Rates Schedule
To build up this schedule we may take 61d. for running costs per mile. To that add 20 per cent. for profit, Id., which makes the charge 71d. a mile. Referring again to operation over 240 miles a week, the total cost, covering standing charges, establishment costs and running expenses, is £17 Its. 7d. The weekly profit is £3 10s. 6d. and the charge £21 2s. id. The mileage charge is Is. 9d.
The cost per mile for running expenditure is 61d., equivalent to 5s. 71d. for 10 miles. Adding Id. a mile for profit we get 6s. 3d. for 10 miles. These amounts were added to the original line of figures to give me totals for each line, 10 miles at a time.
There are many ways of building up a charges schedule but perhaps the most important is that which provides the jobbing haulier with basic data. The scale comes in useful when the operator has to give a quotation quickly, for instance when a customer makes an inquiry over the telephone.
If the operator has a figure for weekly mileage, he can refer to his copy of " ' The Commercial Motor ' Tables of Operating Costs" and give a quotation at once. He must, however, bear in mind what I have said so often-the figures in the Tables are to be regarded as representing only minima.
Take the case connected with the table accompanying B32 this article. The customer wanted a rate for a 3-ton oiler
covering 240 miles a week. The Tables do not give a charge for 240 miles but they do for 200 and 300. For 200 miles the recommended charge is 2s. a mile; for 300 miles it is Is. 6d.
It would be sufficiently accurate to take Is. 9d. This would apply only if the mileage were always 240 a week. If the distance should rise to 500, the minimum charge per mile should be ls. 2d. For 240 miles, Is. 9d. is the lowest figure which will yield a small, legitimate profit.
For 500 miles, the operating cost is only 94d. a mile. The charge may be Is. 2d. and the difference between the rate and the cost is partly made up of lid. for establishment expenses.
Another method of charging applies to regular work with low weekly mileages. A charge based on hours worked is best in such cases. For example, if a vehicle covers only eight miles an hour, the charge might fairly be 12s. an hour.
There is, however, no means of reading such quotations directly from the Tables. They can be obtained from the "Time and Mileage" figures. In Table III, the time charge is quoted as 6s. an hour. That includes no provision for
mileage. Below the figure of 6s. it is stated that if the hourly mileage is over five the charge per mile must be 71d. If the proposed contract provides for eight miles per hour, there must be added to the 6s. time charge enough to cover eight miles at 71(1., that is 4s. I0d., making 10s. 10d. an *hour. Again I warn the reader not to accept less.
Another method, highly popular with those who let out vans on hire, is to make a fixed charge per hour or other period. There is usually an arrangement for an extra charge to be made if the agreed mileage per hour is exceeded. That is called excess mileage, and it is customary to fix it rather high, ostensibly to cover unexpected cost. Actually it is from these excess payments that the profit is made. It is rare for the agreed mileage to be all that is run; it is the exception for, it not to be exceeded.
None of these methods is open to the jobbing haulier who holds himself out to take on mileage contracts of any description, provided that they are carried out conveniently by the suitable available vehicle. He is usually asked to quote a specific price, either per job or per mile for some work which will take up only a portion of the week.
It is for men in such a position that the scheme I have described in this article is intended. An operator should reckon how much his time and that of his vehicle are worth. He should also have in mind an additional amount per mile which he must earn if he is to make the work profitable.
If he remembers these figures, he will be able fairly readily to estimate for any job which comes his way. A schedule of time and mileage figures should lie on. his desk near the telephone so that he can make a prompt and accurate reply to any inquiry. S.T. R.