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Applying the Metropolitai ates to 'a Difficult Problem

22nd November 1940
Page 28
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Page 28, 22nd November 1940 — Applying the Metropolitai ates to 'a Difficult Problem
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Which of the following most accurately describes the problem?

Showing that These Rat are Applicable to the Ca of a Seven-day, 24 Ham Per Day, Hire Job WAR conditions are bringing to light some novel transport problems. Many of these are not easy and the solutions reached are rarely pleasing to all the parties concerned. Here is an example.

A. haulier in the. Metropolitan area writes: " An old and valued --customer of mine has, since the air raids started, had one of my 4-ton lorries for 24 hours each day. I rendered my account on the overtime rates agreed with the company before the blitzkrieg started. This has caused a storm, and I have now been asked to quote a low rate for a definite 24-hours' service for -seven days each week, " I would be grateful for your advice on what you would consider a reasonable quotation for this 4-ton vehicle and driver for a 168-hour week, also what you consider a fair figure for ordinary overtime work and Sunday work.

-" I would point out that the 168-hour week is based on about 500 miles per week and the vehicle is often standing by at night during the raids, awaiting orders, and when the occasion arises it goes out, sirens or no sirens."

1 ansWered: "In my view your minimum charge for seven days per week, 24 hours per day, for a 30-cwt. lorry, should be £32 13s. The charge is calculated on the assumption that you pay your driver the full wages reckoned according to the Road Haulage Wages Act and set out in RH4 as applicable to the London area. I assume that you are at practically no extra expense as regards either your standing charges or overheads. In assessing the rate, which I suggest you should charge, I have allowed for the vehicle covering 500 miles per week.

Assessing Rates in Respect of Overtime

" In respect of the question about overtime, in the ordinary way I should assess this at the rate of 3s. per hour, plus 5d. for every mile run during that hour and, on Sundays, 4s, 3d. per hour' plus 5d. for every mile run."

. It should be noted that in his inquiry the haulier refers to the employment of a lorry and driver.I took that to mean the conditions were such that the man would be standing by, available for service as and when required, and would be able to get stifficient time for rest and refreshment. These conditions are analogous to those which apply in the, case of vehicles hired by the military for 24 hours and for certain cases of civil-defence hire. Because of that, as will be seen in the figures which follow, I made no provision for change of drivers, assuming that one man would oe available throughout the week and that he would expect to be paid as if he was working the full 168 hours.

I arrived at my figure of £32 13s. as folIows:-To-day, the running cost of a 30-cwt. -lorry is 4d. per mile, made up in this way (the figures are pence per mile): petrol, 1.71d.; oil, 0.10d.; tyres, 0.40d.; maintenance, 0.89d.; depreciation, 0.90d, .

The calculation of the wages to be paid is rather compli cated. For the first 48 hours the driver will receive • £3 12s., the standard wage for a 30-cwt. lorry operating in

the London area, and assuming that his employment commenced after June 8, 1932. For the next eight hours he will be entitled to time and one eighth, or is. 8/d. per --hour, which is 13s. 6d, For the next 88 hours, to bring him to midnight on Saturday, he will he paid at the rate of time and a quarter, which is Is. 100., totalling £8 5s. On Sundays, for the whole of the 24 hours he will be paid at double time, that is Ss. per hour making another £3 12s. The net total of wages is thus £16 2s, 6c1.

In addition, the employer will have to make provision for National Unemployment Insurance, National Health Insurance, insurance under the Workmen's Compensation Act and for holidays with pay. The total of these four items approximates to 45. 6d. per week, bringing the gross figure for wages to £16 7s.

Standing Charges That Do Not Change • The other standing charges, that is to say tax, garage rent, insurance, and interest on capital outlay, will total the usual figure of £1 10s. -per week and the establishment charges will probably amount to £1 per week.

In the circumstances, these are not likely to be increased over and above normal merely because a vehicle is away on 24-hour duty; there is no possibility, either, of reducing them, as all the items still remain to be met. If this sum of £2 10s. be added to the wages figure we get the total for fixed charges, including wages, at £18 17s. per week.

. The -cost of 500 miles at 4d. per mile is £8 7s. per weekand the total cost to the operator is, thus, £27 4s, If profit be added at the rate of 20 per cent, on cost, that is £5 9s,, it brings the charge up to £32 13s. per week.

When I had sent a reply, it occurred to me that this operator, being in the Metropolitan area, might possibly have been well advised to have charged on the basis of the Metropolitan rates. These were published in The Commercial Motor dated July 6, 1940. For a 30-cwt. lorry a charge of £2 per day is to be made, that providing for 8i working hours and the maximum mileage of 50. For every hour over the 8,/ per day, a charge of 3s. 6d_ is to be made, and for every mile over 50 per day or over 6' m.p.h., an addition of 30. per mile.

Tackling this problem, with the Metropolitan rates schedule as a basis, I arrived at the conclusion that the charge ought to be £36 15s. 3d. I reached the total in the following way:-First, there are six days of Si hours each at £2 which is £12. Then, in order to complete the six days of. 24 hours each there is a further period of 93 hours for which the operator should, according to this schedule, charge 3s. 6d. per hour. That totalled £16 5s. 6c.l. Then there is Sunday, for Si hours of which I presume the rate would still be £2, plus 15i hours to make up the 24, at $s. 6d. per hour, a total of £4 13s. 3d.

There is no provision in the Metropolitan Rates Schedule for a special pric,p to be charged on Sunday, but it did

occur to me that the operator would expect to be reimbursed for the extra wages he would have to pay on that day, as compared with a normal weekday. That I assessed at 41 lie. od. The total, so far, is £34 11s. Oct.

No cognizance, however, in the above, has been taken of the mileage run, which is limited in this schedule to 50 per day. That is 350 per week, so that We must still charge for a further 150 miles at 31c1. per mile-£2 3s. 9d. -giving a total of £36 15s. 3d.

Prominent Leader Answers the Problem

By a fortunate coincidence, the day after I had dealt with this inquiry I met Mr. T. A. McDowail, one of the oldest and best of the many thousands of friends I have in the industry. He was, as a good many are aware, principally responsible for the Metropolitan Rates Schedule and I took the opportunity to put the problem before him and ask, first, if he thought it was one to which the Metropolitan Rates Schedule should be applied, and, secondly, how he would assess the rates to be paid. He thought that the Metropolitan rates were applicable and, later, wrote telling me the way in which those rates ought to apply. His answer was along these lines: " In handling such a problem by Metropolitan rates, I should have said to myself that a seven-day week of 24 hours means 14 days of 50 miles each, that is £28. Each of those days is 12 hours-14 times 34 extra hours, 49 hours at 3s. 6d., £8 Us, 6d.; 14 days and 49 hours and 700 miles allowance, £36 Hs. 6d1

" However, it is obvious that the driver must rest and eat, and the Metropolitan rates are for 84 working hours. In practice, the man would have, at least, 14 hours off in each 12. Let us assume he has only. an hour, and it will mean that 14 hours must be knocked off at the extra hour rate, since that is how they have already been charged -less 14 hours at 3s. 6d., £2 9s. ThaThaves £34 2.s. 6d.

" Now, that is what I consider the contractor is entitled to, because it is up to the customer to use his mileage allowance, and if he does not, then it is probable that his smaller mileage is dearer per mile. However, the contractor is, asking for a cheap price and wishes to take advantage of all methods of obtaining it.

".Since it is work which appears to entail much standing about, it may be logical to assume that, perhaps, the smaller mileages are not, in this case, very much dearer and, therefore, he may be inclined to allow the 200 miles off his original price and put them back if thea mileage be done. Deducting 200 miles at 34d. per mile (42 18s. 4d.). the total becomes £31 4s. 2d.

"You allow £1 11s. 9d. for extra Sunday wages, I know that is right, but in practice two drivers would have to be employed, and, possibly, a relief. It is probable that some arrangement would be made which would obviate the Sunday wages (£1 11s. 9d.), but let us put them on. The total is now £32 15s. 11d. " As I have said before, I have never yet found a problem which cannot be solved by using the Metropolitan Rates Schedule.

" Now, if this turned out to be a job where the lorry must not be left, it would be necessary to get a dispensation in respect .of Section 19 (51 hours) and use ihree drivers, doing continuous eight-hour shifts. We must then, put back the £2 9s, for meal hours and the than can last out with a Thermos and sandwiches.

" Their times would be arranged on the sea system, with dog-watches to change them around : (1) 8 a.m. to 4 p.m. ; (2) 4 p.m. to 8 p.m.; (3) 8 p.m. to midnight; (1) midnight to 8 a.m.; (2) 8 a.m. to 4 p.m. ; (3) 4 p.m. to 8 p.m., and so on.That will continually change their hours and days. If the times be awkward for changing, they can be altered.

" This hourly business does not come within the scope of your question, but I am inclined to add a little more. In working out a schedule it must be remembered that the watches must be divisors of the 24-hour day. Watches of 2, 4, 6, 8 and 12 hours can be used, but any others will alter the changing times each day andcreate confusion. At sea they use four on and eight off, with dogwatches from 4 p.m. to 6 p.m. and 6 p.m. to 8 p.m. That is satisfactory when you live 011 the job, but travelling time eaters ipto it when ashore. Probably a six-hour schedule will cater for Section 19, except for the half hour. That should he easily got over." .

Rates Conclusions .• That Vary Little It is particularly interesting to note that whilst Mr. McDowall tackles the problem in a different manner from that 'which occurred to me, his conclusion about the rate (32 Iris. lid.) is only 2s. 11d, different from that I first arrived at. That isan extremely close agreement.

I dealt with the question about overtime rates, included in the letter of inquiry, in this way. I took 2s. per hour as being the driver's wage-actually, 1s. 104d. Is the more exact figure for the bulk of the period-added 6d, per hour for sundry expenses ariSing out of providing for overtime, and a further 6d. on to that total of 2s. 6d., representing 20 per cent, for profit.

For Sunday work, the driver's wage is 3s. per hour; add 6d., as before, for sundries, and 9d. as 20 per cent. of that total, and you get 4s. 3d, per hour.

It is of interest to compare the total charge, using these figures for overtime, and totals by the other methods.

In the six days of the week there are 144 hours. Taking away the 48 hours' standard week, 96 hours are left for which the operator would charge 3s. per hour, that is £14 8s. All the hours worked on Sunday would count as overtime and be charged at 4s. 3d. per hour, which is £5 2s. The total 'charge for overtime alone is, thus, 419 108., so that if the rate for the 48 hours be £14, then the total is 433 10s., which is not very different from that which I suggested in the first place. S.T.R.

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Locations: London

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