Starting with No Capital.
Page 62
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Whilst it is true, as I have said, that these four questions are the most prominent, in some form or other, in the majority of the letters I receive, yet it often happens that an enquiry will be void of any of them. One who is not conversant with the peculiar conditions of the haulage business would be inclined to think that the question concerning capital would never be absent. He would be wrong. • Not only does it often happen that a letter from a prospective haulier contains no reference at all to this important point, but it is often obvious that the enquirer is determined to start without any capital. I received a typical enquiry of this class the other day which has several features of general interest. It is worth while to publish it here and to deal with it at length.
Carting Coal for Colliers.
The enquirer fives in a mining district where, apparently, the workmen have their coal carted direct from the local station in ton lots. The farthest part to which coal has to be carried is 11 miles away from the yard and, at the present time, about 100 tons per month have tO be carried. This amount will probably increase during the winter. He wants to know if he can make a profit by undertaking this cartage with a 25-cwt. lorry of well-known make. He can get 2s. 3d. for every ton no Matter how near to the station or the 11-mile limit the delivery may be made. In addition, he tells us that he can run what he calls a " Paddy " to take the girl operatives to the local mill, which, I gather, is 6 miles distant by train, plus a farther 2 miles' walk, making 8 miles in all. Apparently, at present each of these girls pays 3s. 6d. a week for a season ticket at a reduced rate, and our enquirer is thinking of taking 20 of them to work in the morning, coming back to do his day's coal haulage and going to fetch the girls again at 5 o'clock in the evening. He is going to charge them the same as they are now paying for their railway tickets.
Question of Income and Expenditure.
Finally, he says that there are three more pits near the village from which he thinks he could get work to eke out whatever profit may result from the above operations. He proposes to obtain the lorry on a hirepurchase system and will have therefore to find the instalments for this, as well as to pay for the upkeep of the vehicle and his own living.
If I assume that he delivers 25 tons of coal a week and that the average distance is a quarter of a mile out and three-quarters of a mile home, then, supposing that a ton is carried on each journey, which will be of the average total length of 11 miles, he will have to make 25 trips a week, so his mileage for this work will be 371 a week.
If I am correct in thinking that the journey with the mill girls is 8 miles out and 8 miles home, then this, as the distance is covered twice a day, will involve 32 miles daily, or 192 miles per week. The total weekly mileage will therefore be 230.
The running costs of a lorry of the type he specifies will be 3d. per mile, that is to say, 57s. 6d. per week, and the standing charge will be 14 12s. 2d. during the same period. The total weekly cost will therefore be £7 9s. 8d., which includes an allowance of £.3 Os. for driver's wages which, presumably, will go to the owner himself.
His income will be that from the cartagesof 25 tons of coal at 2s. 3d. per ton, that is to say, 12 16s. 3d., plus the fares from the 20 girls at 3s. 6d. each, namely, £3 10s. Thus, the total is £6 6.s. 3d., so that it would appear that he is going to lose £1 Ss. 5d. per week, which would certainly be most unsatisfactory from every Point of view.
Getting Down to Rock-bottom.
Obviously, however, a mere statement of more or less academic figures of operating costs is not sufficient to meet this case. In order to answer the inquiry usefully it must be looked into more carefully, giving special regard to the peculiar circumstances. What this man really wants to know is how much he will have to spend and, assuming that he takes at least the 16 Os. 3d. as stated above, how much he will have left to pay the instalments due on his lorry and to keep himself.
Looking at it in this way, I can tell him that he will, naturally, have to buy petrol and oil all the time. I must also warn him that at the end of the first year, If not before then, the tyres will need renewal, so that, unless Ile is going to be caught without money to buy a new set, lie will have to set aside the sum of id. a mile, which is approximately 15s. a week, in preparation for that emergency. On the other hand, it is safe to assume that during the first year the amount needed for maintenance will be negligible and, in the peculiar circumstances of the case, it may be permissible, but only for the first year, to ignore depreciation. On these lines, I may take it that the running cost will be no more than 21d. a mile.
Consideration of Standing Charges.
Now as regards standing charges. He will probably have paid both the licence and insurance with the initial deposit on his hire-purchase contract. He must, however, look forward to the necessity of renewing both at the end of the year and, unless he cares to run the risk of not being able to use his lorry after the conclusion of the first year, he should set aside 10s. 6d. a week against the next payment of the licence and 6s. 3d. a week for re-insurance.
If he now adds to those figures his garage rental, if any, and I think we ought to assume that this will be at least 5s., then he will have 21s. 9d. a week as standing charges. That means that for operating costs he must reckon on an absolute minimum of £2 Os. 9d. a week. His income, as I have shown, is 16 6s. 3d., and if he subtracts 12 6s. 9c1. from that, he will have a balance of £3 19s. fid., out of which he must pay the instalments on the lorry and provide a living for himself. S.T.R.