• Unprofitable Rates for Sand and Ballast Haulage
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Condlions of Loading and Material Which Render Inapplicable Any Ordinary Standard Rates; Yet Another Object Lesson for Those Who Favour Statutory Rates
jr-NONTINUING Consideration of the letter from A.C.I.S.,
dealing With • his unfortunate experiences of sand and ballast haulage, as published in " The Commercial Motor" dated December 3, 1943, and amplified by him in a later communication, he has this comment to make on the figures ,which have been published in My recent articles dealing with this class of haulage.
" All these suggestions -are; naturally, apPlicable, when average conditions prevail. My purpose in writing the first letter—and that purpose stillremains-L--was to point out to sand and ballast hauliers, a large number of. which I know to be quite small concerns, the many snags for which they must look.
" Of these, I think the first and most important is that they must study conditions at the pit, and particularly the roads in and out. Secondly, they should take steps to find out whether the ballast is to be dry or wet."
He then refers to the article of mirie which appeared in " The Commercial Motor" dated December 24, 1943, in which I expressed the view that A.C.I.S. was exaggerating when he stated that eight out of 20 vehicles engaged on a particular job of sand and ballast haulage were off the road as a regular thing.
Actually, he now states, that out of a fleet of 45 4-yd. tippers there have been only one or two Occations when more' than 30 vehicles were in action at the same time. The average over a period, he adds,. was 28. This, low average of vehicles on the road or, alternatively, this high percentage of vehicles out of commission due to the need for major repairs, was, he states, due to two reasons:—(1) The conditions at the pit ; the roads in and out of the pit were extremely bad; and (2) the hallast was wet, being loaded straight into the lorries from the river„ by excavators. Weighbridge tests showed that it weighed from 61
to 7i tons per 4 yds. "
National Need Necessitated Big Percentage of Overloading Not only, therefore, were the roads bad, but the vehicles were constantly and heavily overloaded, to the extent of not less than 35 per cent., and quite frequently 50 per cent. Only the particular circumstances of the case, he adds, prevented the haulier from refusing to continue. The work, as it `happened, was of national importance, and it was most essential that it should continue without a break.
He then gives me some statistics relating to the operation of this fleet. They relate to a periodof 10 months, during' which the average hours were -10 per day for six days 'per week and oCcasionally a short seventh day. There were 48 vehicles in all, the 45 already Mentioned and three others engaged in straight' hauling. -The latter have consistently* earned good money and cost comparatively little for repairs'. The statistics given Me by A.C.I.S. are set out in-the accbmpanying Table IV.
On these figums A.C.I:S. makes the following comment:— Earnings are low and the cost of repairs is high. Indeed, they are like. the two ends of a balance; if one is up the other is down. The figure for depreciation, too, is higher than usual.
The reader will note that the total cost per vehicle per week exceeds the total earnings, so that for these 10 months all these vehicles were operating at a considerable loss.
Referring to his previous letter, A.C.I.S. reminds us that he stated that the running lorries could make only six trips in an 81-hour day. Actually, he states that there were other trips to be made, and I have calculated that only si trips per day on an average were completed for the 30 lorries available.
He adds that 40 of the lorries were purchased new last yeai and the other five were bought the year before, so that it cannot be said that the vehicles were old and decrepit and, under normal conditions, due for replacement.
I. should make it clear "that of the information given in. Table IV, A.C.I.S. is .i.espcinsible for only the first column of figures, giving the percentages. I have added the second and third columns, but my figures are directly calculated from 'those given me by A.C.I.S. For example, in his statement he gives me a figure of 22.66 per cent, for petrol and oil. That proportion of £23 12s.—which is 100 per cent.--amounts to £5 7s. a week; which• is, therefore, presumably the actual average expenditure per vehicle per week on petrol and oil.
Then I have taken an average of 51 journeys, eight miles each way per day, six days per week, which gives me approximately 530 miles per week. By dividing £5 7s. per week by 530 miles I get 2.40d., which I take to be the expenditure per mile on petrol and oil.
It if not practicable to make a direct eomparison between
• these figures and those in " The Commercial Motor " Tables of Operating-Costs.
Turning to ' Table II in those Tables, the cost per mile for petrol for a 5-tonner covering 500 miles per week is given as 2.31d and that of lubricants as 0.16d. The total is 2.47d.; Co that so far as the consumption of petrol and oil is concerned A.C.I.S.'s vehicles are not extravagant. This is probably due to the. fact that they are all comparatively new.
A Puzzling Point on Drivers 'Wages and Expenses The next item, wages and expenses of drivers, is quoted at £7 3s. 7d. per week. I am a little puzzled as to how this amount is made up. Actually, the wages of a driver in a Grade I area, working 60 hrs. per week, should not, at that time, have exceeded £5 7s. • • At first, I thought that the wages of the drivers of 45 vehicles had been debited against the 28 machines actually in use, as that would have given me approximately the correct amount. I came to the conclusion, however, that there was no intention of doing this because the next item—licences and insurance at £1 3s. 7d. per, week—is slightly less than I Would have expected as the net cost per vehicle of those two items, without taking into consideration the fact that 28 were in use out of a total of 45.
I must assume, therefore, that the amount for wages is the actual sum paid to the driver, and includes some subsistence allowance due to the fact that he is operating away from his home base.
Depreciation at 331 per cent, per annum is a fair estimate for vehicles engaged on this class of work, and the fact that it amounts to 1.44d. per mile, as compared with the figure in the Tables of 1.22d. per mile, does not surprise me. The depreciation and the cost of repairs of vehicles engaged on such work is usually considerably above the average and, as I have so often explained, figures in • " The Commercial Motor " Tables of Operating Costs are average.
Office wages and other head-office expenses are what I would call establishment costs, and they appear to be below, rather than above the average.
We come, finally, to repairs and, as there is no separate provision for the cost of tyres, I can only assume that the two items, tyres and repairs, have been consolidated. According to the figures in the Tables, maintenance and tyres together total 2.23d per mile, as against 3.32d.
Here, of course, is a considerable difference and one which is to be expected from A.C.I.S, 's statement about the troubles experienced in connection with the operation of his fleet. Indeed, having in mind the fact that he stated in his first letter that " each lorry on the road had an average of at least one puncture per day," I should not have been surprised to find the difference between the average costs and those of the vehicles of this fleet even greater than that which is exemplified in the figures put before us,
An alternative method of eomparirig the figures is as follows:-Take first of all the running costs-petrol and oil at 2.40c1., tyres and maintenance at 3.32d., hod deprecjation at 1.44d., which gives the total of 7.16d. per mile, compared with " The 'Commercial, Motor " figure, at that date, of 5.82d.; showing a difference against A.C.I.S. of 1.34(1., rather more than lid. per mile, which is quite a
considerable amount. •
• The standing charges, comprising wages, tax and insurance, amount to £8 7-s. 2d. There is no provision for insurance, or for garage rent. If I allow. 12s. 10th for those two items I get a total *for standing charges of £9 per week, as compared With £6 Gs. per week in the Tables. Adding overheads at £2 8s. 4d., the total of fixed costs per week comes out at £11 8s. 4d. Add 20 per cent, to that for profit-another £2 5s. 8d.-7-and I get £13 14s. as _being the amount required to cover-the
fixed charges.• • . That is 5s. Sel. per hour on a 48-hour week, coirlpared with 5s. 6d; which was the amount I suggested in the previous article as appropriate for making calculations of sand and : ballast rates. Furthermore, I also stated that 10d. per mile should be sufficient on to-day's operatiug costs; and that amount should be satisfactory in connection with vehicles costing 7.16d. per mile.
It Still seems, therefore, as though 5s. 6d. per yard for this eight-Mile haul should be sufficient. Obviously it is not, because a considerable loss is being made, and
think the discrepancy arises from the fact, also noted, that A.C.I.S. does not appear, in drawing up his schedule of costs, to have properly allocated excess expenditure due to the fact that 28 vehicles only were working out of a total of 45 machines. It seems to me that the next thing to do is to try to assess the effect of making an allega
tion. This I will do later. S.T.R.