Are PART-LOADS Worth Carrying?
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Customers Are Averse to Hiring a Vehicle at Full Rate for a 'Consignment Occupying Only a Portion of Capacity, Yet Hauliers Are .Unwise to Quote Charges Which, Though Appropriate to the Load, Will Not Cover Costs BUYERS of transport are complaining that freeenterprise hauliers are reluctant to handle traffic which comes in small lots, consignments too large to be treated as parcels, but too small to go as complete loads. It is said that hauliers refuse part loads and will .accept only traffic which comes in full loads.
Even when it is possible to make up a full load by collecting from other customers in an area, the prospects of getting the small load carried are not too good, as the hauliers will dodge the customer in such a way as to cause him trouble by simply failing to turn up and collect the consignment, it is said.
I do not think that the problem is widespread, but it nevertheless does exist. I have been receiving letters from hauliers asking what they should charge for these part loads. It has been suggested that I should deal with the problem of arriving at fair charges for a load well below the rated capacity. of the vehicle in which it is carried.
I have always made it clear, and have frequently emphasized that the rates quoted in these articles are based upon the cost of operating the vehicle: they are the minimum charges which must be made if the work done is to show a profit. Obviously if a load of 4 tons is carried in a 6-tonner, that fact does not materially affect the operating cost of the vehicle—a small saving in fuel and tyres is perhaps realized, hut no more. The small load does not diminish the establishment costs and it should not affect the reasonable profit to which the operator is entitled.
Appropriate Price am quite aware that if this problem is considereq from the point of view of the haulier's customer, there is likely to he some difficulty in persuading him to accept the principle I have just laid down. If his views are to be considered, one of two things will happen: either that particular load will be carried at a loss, or it will be carried by some other, contractor in a vehicle of appropriate size
and at an appropriate price. .
The haulier has an excelknt precedent for increasing the rate per ton when the load is less than that-for which the vehicle was designed and normally used. He has the example of British Railways before him. The charges for small consignments. in eases where those consignments involve the sole use of a wagon, are higher per ton than they would be if the consignee offered a " full-truck " load.
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Beyond pointing out that fact and establishing as a principle that if the haulier is to make a profit he must base his charges in the first place on the operating cost of the particular vehicle used, I do not see what more I can do to help him.
Strict Adherence
An occasional consignment in a big lorry, carried for a regular customer and charged at a rate somewhat less than it should he if strict adherence is given to this rule is sometimes permissible, hut frequent recurrence of that practice merely involves loss.
I had a concrete example of the sort of thing I am discussing only a few days ago, when a haulier wrote to tell me that he had just carried a load of 4 tons from a town A to another, B, the distance being 130 miles, 260 miles per return journey. The vehicle used had a capacity of 6 tons and no return load was available. The inquirer naively asked me what would be a fair charge for the work. I am afraid I did not give him a direct answer to this question. I put it to him, as I am going to put it to the reader, as a problem for his own consideration.
This is the way 1 set it out. 1 assumed that the 6-ton lorry employed for the work was covering an average of 500 miles per week. On that basis the cost per mile, assuming the vehicle was an oiler and that fuel cost 4s. per gallon, was approximately ls., so that the net expense of running the vehicle for 260 miles was £13. AL the least his establishment charges are probably £3 per week, which means that to arrive at his costs another 10s. must be added to the net expense. The total is 'therefore seen to be £14 10s.
Further, I am of the opinion that the minimum net prefit from the operation of a 6-ton lorry must be £5 per week, which is approximately' £2 10s. for the 260 miles. On that basis the charge for this particular journey should be £17.
It is to be imagined that any tradesman would be willing to pay E4 per ton over a lead mileage of 130? The real mistake which this inquirer made was in accepting the load without pointing out the expense involved. 11 he had done so, the probability is that the customer would have chosen some other medium, for the transport of his 4-ton load over that distance.
He would either have sent it by rail, taking his chance of its reaching its destination in reasonable time, or he would have found some other haulier who would have done what this inquirer has obviously done, namely, accepted the load without thinking and then found himself in the position of not being able to charge a price which would show him anything but a loss. This inquirer would have lost the job and I think it would have been well lest.
The truth is that these occasional small loads are not for the smaller type of operator with only one or two vehicles: they can be carried at a reasonable rate only by a larger organization whieh has these two advantages: a vehicle to fit the job—a 3-tonner for a 3-ton load and a 5-tonner for a 5-ton load—and/or a sufficiency of small loads to be carried together in one large vehicle.
Better still, they can be handled by a haulier who is running a regular service over the route and who can therefore put the consignment in with other goods. 1 am of the opinion that it is not commercially practicable to carry small loads of, say, up to 4 tons, by road for the distance over which this particular load was carried, without the prospect of a return delivery unless. the commodity is one which can stand what otherwise would be an excessive charge_ that is to say a highly priced one.
£3 5s. Per Ton?
If this particular inquirer had been able to make use of a 4-ton vehicle, and supposing that that vehicle was normally covering a mileage of as much as 800 miles per week, then working out the problem on the same lines as I have done in reference to the 6-tonner, the cost per mile would be about 91d., giving a total of £110 5s. 10d, for the 260 miles. Adding 14s. 2d. for establishment charges and £2 for profit, the total revenue required would have to be £13 and the rate per ton £3 5s. There must be few commodities that will stand a transport charge of £3 10s. per ton for a lead distance of 130 miles.
On the other hand, had there been a 5-tonner on regular service between A and B, covering 800 miles per week and carrying loads in both directions, the figures would have to be amended as follows:—
The cost per mile would be approximately laid. The chargeable mileage would be not 260 -but 130, so that the vehicle mileage would cost £5 I Is. 4d. for operating costs alone. Adding 9s. 8d. for establishment charges and £2 for profit, the total charge is seen to be £8 Is. or approximately £2 per ton. It is likely that the customer would be willing to pay a lit& more on top of the minimum charge as reckoned above for the convenience received as the result of special 'services.
An excellent way of dealing with these "short of truck" load consignments is one which is operated by members of the National Association of Furniture Warehousemen and Removers, an Association which has done a good deal to stabilize rates for the twin functions of removals and storage. It is referred to as the scheme of operation of the small lots bureau, and requires the working of the group system, which is more widespread among furniture removers than other branches of road haulage.
NA.F.W.R. Method
The scheme originated in the Tunbridge Wells area of the Association some years ago. It has proved successful and has been adopted in other areas of the N.A.F.W.R. Lists of members' small lots awaiting transport are compiled weekly and circulated among members. The loads are carried as convenient according to an agreed charges schedule.
The procedure so far as the customer is concerned is this: a customer has a piece of furniture which he wants to send to a destination some 100 miles away. He asks a local furniture remover if he can take it. The remover, being fully aware of the difficulties, asks the customer if
he would mind waiting until there is a vehicle in the area going to or towards the point where the customer wants his item to be delivered. As a rule the customer agrees. The remover puts that item down on his weekly report to the bureau headquarters, where it is transferred to the card which is regularly sent out to members. It is dispatched as soon as a vehicle going that way is notified.
Value of Bureau
The point to note is that there is in the area quite a number of vehicles, any one of which may be departing in the right direction. Without the bureau and the co-ordination of facilities which are available, the customer would either have to wait until an operator happens to be going in the right direction, or pay the excessive price which would have to be met if the small parcel is put aboard a full-sized furniture van.
One point which arises from this article is that of buying a new vehicle. Suppose, for example, that a haulier who is buying a new vehicle can see an immediate prospect of regular work for a 4-tanner, yet realizes that there is a possibility that, in the near future, a 5-tonner would be required. What should he do? Buy the 4-tonner and wait until his business increases before he changes it far a 5-tonner, or decide to take the plunge at once and buy the 5-tanner ?
I should say buy the 5-tonner, because the increased cost of operation is slight, whereas the loss involved if he has to sell the smaller vehicle and buy the larger within a comparatively short period is likely to be great. The operating cost of a 4-tonner covering 800 miles per week will be about 91-cl. per mile: that of a 5-tonner ION., a difference of fd. per mile. The loss involved in a forced sale of the 4-tonner in the event of its proving inadequate for his requirements might be sevetal hundred pounds. S.T.R. A33