Q We have been offered the job of carrying all the

22nd September 1972, Page 415

22nd September 1972

Page 415

Page 415, 22nd September 1972 — Q We have been offered the job of carrying all the

Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

products of a local firm which involves all smalls work mainly bags and drams. We operate three Transit 35cwt vans and one Ford 3-ton van. The company concerned would give us a contract for the exclusive right to carry all its products. Could you give as any idea of what to charge? Two typical load sheets are enclosed.

A While you have quoted typical loads, you do not say what volume of traffic the firm is offering to you nor its regularity. Is it possible, for instance, to allocate one or more of your vehicles exclusively to this work? If so, then it is suggested that your charges should be based on a weekly standing charge plus an appropriate running cost per mile. The alternative is to raise an hourly standing charge plus running cost.

Presumably you have costing data for your vehicles and to charge on this basis would not be a problem.

In the absence of reliable costing data, perhaps you might like to make use of CM. Tables of Operating Costs which give details of average standing and running costs for a wide range of vehicles. It is obtainable from Book and Sundry Sales Department, IPC Business Press Ltd, 40 Bowling Green Lane, London, EC 1R ONE, price 70p including postage.

For your immediate information, the table relative to a 35cwt Transit with diesel engine quotes weekly standing costs of: licences £1.65, wages £33.10, rent and rates £1.68, insurance £0.75, interest £2.58, total £39.76 per week. To this must be added the running cost per mile multiplied by the number of miles run each week. If your vehicles run 400 miles each week, for instance, the table suggests that 4.38p per mile is appropriate.

Therefore, £39.76 plus (4.38p X 400) £17.52 gives a weekly total operating cost of £57.28. To this must be added first an appropriation for establishment costs, say 20 per cent of operating costs (£11.455) and then a further 20 per cent on operating costs (again £11.455) for profit and contingency allowance. This gives a recommended minimum charge of £80.19 a week.

It is most important, however, that you relate your own individual costs, both standing and running, to the figures given in the table. Your own, more realistic figure must be substituted whenever possible.