Dover Needs Enlightenment
Page 72
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Our Costing Expert Shows in Convincing Fashion the inequity of the rates that
are Paid to Contracting Hauliers
on haulage costs
AN alert haulier in the Dover area, Mr. A. J. Plummer, learning that Durham County Council has increased the rates paid to hauliers for the hire of their vehicles, and that it did so as the result of persuasion by Mr. F. Milton, Northern Area Secretary for A.R.O., backed by figures which I placed at his disposal, draws my attention to the rates for hire which are current in Dover.
He has sent me a cutting, from a local journal, in which the proceedings of the town council are reported. The disclosures made there reveal that the officials of that council are unaware of the cost of operating the motor vehicles which they hire. They must be so, because it surely cannot be possible that, with such information at their disposal, they would expect efficient service for the rates they pay for the hire of those vehicles.
The council was asked, by contracting hauliers, for the addition of 6d, per hour to the current rates for the hire of 30-cwt. and 2-ton lorries. In justification of this request, the hauliers pleaded increases in the cost of operation, including, especially, wages. Anyone with a knowledge of the facts is well aware that the request was a most reasonable one. It was met by a grant of 44d. per hour!
That increase brings the rates for the hire of the vehicles to 3s, 44d, per hour for the 30-cwt. machines and 3s. 104d. per hour for the 2-tonners.
It does not need any elaborate calculation to know that these rate* are uneconomic. For the benefit pf those who do not appreciate this fact-and with them I couple the names of the Dover Town Councillors, as well as the contractors who are doing the work-the following simple demonstration of the inequity of these rates is made.
• Expenses That Must Be Faced • With every motor vehicle go certain fixed items of expense, which can in no way be avoided. Let me set these out, first of all, in connection with the 30-cwt. vehicle. The first of these is wages of the driver. Dover is in a Grade 2 area. The statutory rate of wages is 57s. per week. On to that must be added the 4s. per week which has, since the fixing of the statutory rate, been agreed between the trades unions and the employers' associations. It is, therefore, something which the council is morally if not legally bound to recognize. That brings the basic rate up to fils. per week. Provision for the two National insurances, for insurance against employers' liability, and for holidays with pay, adds, in effect, a further 5s. per week, so that the wages are, actually, 66s. per week.
The other items of these fixed expenses am, on a weekly basis: Road Fund tax, 10s., garage rent, about 5s., and insurance, about 12s. I cannot do more than give approximate quotations for the last two items, because they vary somewhat, It is unlikely, however, that they are less than the figures cited. There is also provision for interest on capital outlay, at 4 per cent, per annum, which is 4s. per week at least. The total of these items, which none can dispute, is 97s, per week, and that, in a 48-hour week, is a fraction over 2s. per hour.
The other expenses that the haulier has to meet are equally unavoidable, in their incidence. They differ from the above in that the total, per week or per hour, is determined by the conditions, or, more exactly, by the mileage which the vehicle covers in those periods of time. They are more conveniently assessed on a per mile basis.
There is petrol, costing the haulier, who buys in quantity, Is. 7d. per gallon. Such vehicles as these, on a small weekly mileage, will consume at a rate not better than 12 m.p.g., so that the cost per mile is 1.58d. Lubricating oil will cost 0.08d. per mile, and tyres, 0.40d. Maintenance, including washing and cleaning, general upkeep and routine work, as well as provision for major overhauls and repairs, will average Id. per mile, and depreciation, including obsolescence, as well as wear and tear, 4.22d. The total of these is 4.28d. per mile. If the vehicle averages only
BM 4 m.p.h. during its week's work, that is 17.12d. per hour; if it runs 5 m.p.h., it is 21.4d. per hour, and if it does 6 m.p.h. then the total is 25.68d.
At the most moderate estimate, therefore, that is to say, if I assume that the average is as low as 4 m.p.h., the bare cost of operating this vehicle is 3s, 5.12d. per hour. It is more likely to be 3s. 9.4d., which is the cost at 5 m.p.h., and is quite probably 9s. 1,68d. if the average be 6 m.p.h.
The foregoing are the bare operating costs of the vehicle. No provision is made for overheads, which, if the operator has any establishment at all, must be at least 6d. per hour. His total expenses range, therefore, from an absolute minimum of Sc. Ild, per hour (leaving out the fractions of a penny) to 4s. • 7d. per hour, which, incideetally, is not necessarily a maximum. His remuneration from Dover Town Council is 3s. 44d. His " profit," therefore, may be anything from minus 64d. per hour to minus Is. 24c1., or more than that.
Similar figures can be quoted in relation to the 2-tonners. I give them briefly, merely noting that the same qualifications apply as in the case of the smaller vehicle.
The standing charges are little more. There is 2s. per week extra on the tax; possibly 6c1. per week more for insurance and the same on interest. The total is 100s. per week instead of 97s., and that is 2s. Id. per hour.
The running costs are as follow :-Petrol, 10 m.p.g., I.90d. per mile; lubricants, 0.10d.; tyres, 0.80d.; maintenance, id.; and depreciation, 1.38d. Total, 4.8$41, per mile. For 4 m.p.h. the total cost per hour is 3s. Sid.; for 5 m.p.h. 4s. lid., and for 6 m.p.h. 4s. 6d.
Add the minimum of 6d. per hour for overheads, and it is plain that the operator is losing, at Dover Town Council's rate of 35. 104d, per hour, an absolute minimum of 6d. per hour; he may be losing lid. per hour, and is, in all probability, losing Is. 34d. per hour.
• Cost of Operating Tippers • In the same newspaper cutting mention is made of the rate for scavenging vehicles. These also, Mr. Plummer tells me, are 2-tonners, with tipping gear. The cost of operating vehicles with tipping gear is greater than that of ordinary lorries. The first cost is higher, because of the gear and the more substantial bodywork which is required to withstand the stress of tipping. The maintenance cost is also greater, and the provision for depreciation must be more. The rate for the hire of these vehicles used to be 27s, id. per day: has now been increased munificently to 28s. 3d.
The cost to the operator of running these vehicles must be more than that provided for above in relation to the 2-ton lorries, but, taking it as being the same, and assuming that the vehicle runs 40 miles per 81-hour day, the operating cost alone is 33s. I lfcl. That amount comprises 17s. 84d. standing charges, being that for 84 hours at 2s. Id., and 40 miles at 4.88d. per mile, which is 16s, Sid. On to that should go 4s. to 4s. 6d. for overheads,
I should like those officials in Dover who are responsible for fixing these rates to check over the above figures and justify, if they can, the prices they are paying. When they do so, I respectfully suggest that they do not draw my attention to the fact that, at tht council meeting reported in the journal to which I am referring, it was also stated that the council gave permission to one of the contractors concerned to employ as drivers youths of under 21 years of age, or to imply that, in so doing, they have given that operator the benefit of 12s. per week in wages. I have not overlooked that point.
If the council replies-as is the habit of councils when tackled in this way-that it has been paying what the hauliers have asked, then I turn to the contractors themselves. I ask them how they reconcile the rates they are receiving with the 'above figures. They may, in reply, disclose some hitherto unknown method of cutting the cost, of operation or, as is more likely, they may inform me that they are able to do the town council work at a loss because of the more profitable work they can do with these same vehicles while they are not needed by the council. S.T.R.,