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What Idle Time Costs Hauliers

22nd March 1957, Page 61
22nd March 1957
Page 61
Page 61, 22nd March 1957 — What Idle Time Costs Hauliers
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Which of the following most accurately describes the problem?

W-HEN a vehicle is off the road for maintenance purposes it is losing money, and if it desired to calculate how much, the method to be used is the same as that for reckoning a claim for loss of use or profits after an accident which immobilizes the lorry.

The procedure is to set down a figure for total revenue and deduct expenses saved because the vehicle is idle, These include fuel, oil, tyres and maintenance allowance. A figure for net profit is thus arrived at. When an insurance claim is made, the operator is asked to provide figures for earnings and expenditure for a corresponding period of a previous year.

I have some figures for a l6-tonner which was off the road for a week. The running cost per mile that the owner saved were fuel 3.75d., oil 0.3d., tyres 3d., and maintenance 2.4d. The total is 94-d. in round figures. According to Uatistics relating to a year previously, the vehicle could have been expected to have covered 40 miles in the week that it was off the road. The assumption is thus made that £25 6s. 8d. was saved in running costs, that amount being 640 times 9M.

In addition there were the wages of the driver and mate, . A mounting to £20 7s. 6d., including. overtime, subsistence allowances and insurances. The total saving was therefore €45 14s: 2d. If the vehicle .earned £95 in the week, had it been operating, there would thus have been a profit of 149 5s. 10d.

That is. in effect, equivalent to the loss involved if a vehicle is laid Up for overhaul or repair following a breakdown. To take another example—a 7-8-tonner running 400 Miles a week—we will use figures from —The Commercial Motor' Tables of Operating Costs." Such a vehicle ought to be capable of earning £42 17s. a week as a minimum. Let its accept £50 as being More likely. Running costs amount to 8id. a mile, comprising fuel 4d., oil 0.250., tyres 2d., and maintenance 2.25d. For a 400-mile week these total £14 3s. 40, Useful Work

Driver's wageS; etc., amount to £10 3s. 8d. so that the weekly expenditure is £24 7s. If we deduct this from the earnings of £50 we find that the net loss of earnings is £25 13s. A point which arises is the fairness "of including driver's wages among the costs saved. This depends upon circumstances, If it is possible to find useful work for the man to do—maybe in helping the mechanic to repair the lorry—it would seem unfair to the insurers to claim his wages from them.

However, the value of the work done by the man when not driving is not the same as normally. The appropriate zunount to be • deducted from the earnings is a matter for arbitration in individual cases. Anyone who has to present a case for claiming damages under an insurance policy, or a claim for loss of earnings, must be quite sure that he has his facts and figures in such good shape that they cannot be challenged.

This subject bears on that of charging for demurrage. Some authorities think that a claim for demurrage should not exceed the bare standing charges of the vehicle, plus an amount for establishment expenditure. I disagree. There arc two points which arise: first, the loss to the operator. because of the vehicle's being detained for loading or unloading is more than the bare standing charge. It is capable of being assessed in the same way as loss of use. Secondly, the wages of the driver are not to be included in the list of costs saved, for wages have to be paid while the vehicle is delayed.

I have been reminded that the time for tendering for

municipal haulage is upon us, and I shall therefore deal with some of the factors which bear upon this branch of haulage. Haulagezrates for Municipal work were for many years the subject of much heart-burning and controversy among councils on the one hand and operators on the other. The difficulties which arose before the war may not recur, but it may be wise to recall them for the benefit of hauliers who are thinking about venturing into this sphere of shortdistance work.

It used to be claimed that the owner-driver was the biggest stumbling block in the way of reaching art agreement on rates_ and charges, but the truth is that many municipalities deliberately took advantage of this weakness in the industry to have their haulage performed at the lowest cost. The Road Haulage Association made strentiousetforts to obtain fair treatment for their members. That they sometimes failed was not their fault. The blame must be laid at the door of individuals in the industry who let their fellows down.

Local Meeting

Sometimes a local meeting of hauliers who were interested in the subject would be called. Fair rates were agreed and, in many instances, tenders were completed at the meeting and dispatched to the authority concerned. It would subsequently be discovered that the rates actually paid were below those agreed. On investigation, the official concerned would explain that following receipt of the tenders at the agreed rates he received letters from hauliers (who had been presgnt at the meeting) asking if they might withdraw their tenders and put in fresh ones at lower rates, In other cases the reverse happened. Similar meetings were held and the tenders submitted, whereupon the local council took the attitude that this similarity in prices indicated the formation of a ring amongst the local hauliers. All the tenders were rejected and fresh ones, inVited from hauliers outside the ring.

Another way of dealing with the matter—and this has proved more successful than some—all the interested hauliers met in the office of the Association, completed the tenders and left them for the secretary to post. ln the Areas where this has been successful the Association was Strong, and the local authority had already been approached and persuaded that the rates submitted were reasonable.

Sometimes the local branch of the Association has made representations to the council and persuaded it that, provided all the essentials to the carrying out of a municipal contract were observed, certain minimum rates should he paid.

Of course one of the difficulties attending on obtaining agreement amongst hauliers, and stabilization of rates, was, in those days, the absence of any compulsion to pay fair wages. That condition does not now prevail, and thus one of the factors tending to depress rates for municipal haulage is eliminated, Another factor, however, remains; it is the habit of evading the provisions of the Road and Rail Traffic Act relating to hours per day that a driver may work. It was quite a common occurrence during the period of which I am writing for operators to undertake a contract with a municipality and to arrange to do other work outside the hours involved in the contract to make up their weekly earnings.

On the question of owner-drivers, I remember one municipality which made no secret of the fact that it used them as a lever to obtain cut rates. As an indication of the truth of my claim that owner-drivers were, in those days, the niggers in the woodpile, I remember that one council stated, in the form of tender, that preference would be given to owner-drivers who tendered. S.T.R.


Organisations: Road Haulage Association

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