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Fit the Vehicle to the Job

23rd September 1960
Page 260
Page 265
Page 260, 23rd September 1960 — Fit the Vehicle to the Job
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Keywords : Business / Finance

Previous Determination of Operating Requirements and Costs is Essential If the Correct Choice is to be Made

THE total cost' ofbuying,and subsequently operating, a 5-ton goods vehicle 400 miles a ,week for five years would be approximately £7,7.00. Of this amount £6,650—over 86 per cent—is attributable to operating costs. Expressed iti this way, this high -proportion emphasizes the vital importance Of carefully considering all aspeets of future operation before purchasing a new commercial vehicle. The figures just quoted, for example, reveal that if a decrease of only 1 per cent, in operating costs could be achieved at the expense of an addition of 5 per cent, to the initial cost of the vehicle, the alternative specification would be worth while.

With over 30 Manufacturers exhibiting at -the Commercial Motor Show, a wide choice of vehicles is available to prospective purchasers. •But advantage can be taken of the many new models now on show only if the operator knows exactly what he wants. Expert advice and detailed technical descriptions of the wide range of commercial vehicles now available are given in The Commercial Motor. Other aspects which prospective purchasers . should consider when making their choice include traffic and legal -requirements, as they affect vehicle selection. Operators, should also have in mind a comparative analysis of possible operating costs.

Legal Limits

Briefly stated, the main restrictions on The dimensions and gross weights (that is, load plus vehicle) of goods vehicles are as follows: The total permitted gross laden weight for a fourwheeler is 14 tons, with 9 tons as the maximum on any one axle. Twenty tons gross is permitted on a six-wheeler and 24 tons on an eight-wheeler. A trailer is permitted a total gross laden weight of 14 tons, whilst a vehicle and trailer with powerassisted brakes can have a total weight of 32 tons.

Standard rigid goods vehicles, whether four-, sixor eightwheelers, are limited to a maximum length of 30 ft., whilst articulated units can extend to 35 ft. The overall width of goods vehicles and trailers is restricted to 7 ft. 6 in., but this can be increased to 8 ft. if the vehicle or tractor unit weighs not less than 4 tons unladen. There is no height limit for goods vehicles.

Public service vehicles are restricted to a maximum length of 30 ft., irrespective of whether they have singleor doubledecker bodies, fouror six-wheel chassis. The total laden weight is limited to 14 tons, again with a maximum of 9 tons on any one axle.

Within the legal limitations, there is a substantial variation in both size and types Of body available to the goods vehicle operator. A total of 40 basic types is shown in the appropriate sections of the new edition of " ' The Commercial Motor' Tables of Operating Costs." These tables show how operating costs increase with the size of vehicle. It would, for instance, c34 cost £16 17s. to run a 10-cwt. petrol-engined van 300 miles a .week, £19 4s. for a 1-tonner, and £21 for a 2-ton van.

Averaging 400 miles weekly, a 4-tonner with petrol engine and platform body would cost £24 7s. to run, whilgt a 6-tonner would cost £28 I ls. Corresponding costs when an oil engine is installed would be, £22 13s. and £26 6s. respectively.

A 16-ton eight-wheeled rigid goods vehicle would cost £74 8s. to run when averaging 1,000 miles a week, compared with £76 19s. for the corresponding articulated vehicle.

A 31-seater coach, when fitted with a petrol engine, is shown to cost £44 when it is run 600 miles a week, compared with £40 5s. for the oil-engined version. Corresponding figures for a 41-seater coach are £47 17s. and £45 10s.

Many goods vehicle operators—and particularly C-licensees —will no doubt be considering the economics of specialized bodies, many of which are exhibited at the Show. In such cases, having determined a fair balance between size and cost, it is necessary to decide whether the greater operating efficiency which a specialized body should give in specific circumstances can outweigh any lack of flexibility because it cannot be employed on other work. Alternatively, if a multiple-purpose vehicle were a possible choice, the advantages it provided would have to be considered against _ the reduced carrying capacity which its probable increase in unladen weight would necessitate.

More important still when considering the purchase of specialized goods vehicles, is that both operator and customer should be in agreement as to the benefits which the vehicle is expected to provide, the manner and extent in which they are to be exploited and the proportioning of any additional cost of operation. Many of these specialized vehicles must inevitably be more expensive than standard platform models, so it is imperative that all these factors should be discussed and determined beforehand if a bad buy is to be avoided, Practical experience in transport operation is invaluable in determining whether a specialized vehicle would prove an economic addition to an existing, and efficient, fleet as distinct from a useful, but separate, unit. Otherwise, apparent advantages of such a vehicle—derived from costing in isolation— may be offset by reduced overall efficiency of the total fleet.

Priority treatment in the initial allocation of loads and possibly subsequent loading times for a new, and probably more expensive, vehicle could react unfavourably on the economic operation of the remaining vehicles of the fleet.

Standardization of both makes and types is readily acceptable as an ideal although, in practice, some compromise has inevitably to be made. When considering this aspect of transport operation in relation to vehicle selection, it is important to determine beforehand what policy is to be adopted as to the period of vehicle replacement: ' With the increasing range of goods vehicles being offered_ by the larger manufacturers, a policy of more frequent replacement is becoming accepted by operators. Where such a policy is adopted, the need for manufacturers' service and spares should be reduced. Correspondingly, the proximity of a manufacturer's service depot becomes less vital.

At the start of this article, I gave the cost of operating a 5-tonner 400 miles a week for five years as £6,650. I will now break that cost down into its component items and similarly treat costs for a 16-ton diesel-engined articulated unit.

With an unladen weight of 2 tons 12 cwt., the 5-tonner (with petrol engine) would have an annual licence duty of £32 10s. This would result in a standing cost per week of 13s., assuming a 50-week year to allow for two weeks when the vehicle may be off the road for major repairs or holidays. Drivers' wages are reckoned at £9 4s. 3d., inclusive of appropriate additions to the basic rate to provide for insurance contributions and holidays with pay.

6.99d. Per Mile

Rent or rates incurred in garaging the vehicle are nominally assessed at 10s. 9d. a week. With an annual insurance premium of £31, the equivalent cost per week amounts to 12s. 5d. Interest charged at a nominal rate of 3 per cent. on the initial outlay of £1,050 adds 12s. 7d., making a total standing cost per week of LII 13s. At 400 miles a week, the cost per mile would be 6.99d.

With petrol purchased in bulk at 3s. 10d. a gallon, and an average rate of consumption of 12 m.p.g., fuel costs per mile will amount to 3.83d. Lubricants are reckoned to cost 0.22d. With a set of tyres costing £158 and having a mileage life of 30,000, tyre costs per mile become 1.23d. Maintenance is reckoned at 2.44d. per mile.

In calculating the cost of depreciation, the amount to be written off is obtained by first deducting the cost of the original set of tyres from the initial price of the vehicle, followed by a further reduction of the estimated residual value. With a resulting balance of £780 and an estimated vehicle life of 150,000 miles. the depreciation cost per Mile becomes 1.25d.

The total for these five items of running cost is therefore 8.97d. which, when added to the standing costs, gives a total operating cost per mile of 15.96d. when averaging 400 miles per week. At this weekly mileage the corresponding running costs per week would be: fuel, £6 7s. 84.; lubricants, 7s. 4d.; tyres, £2 Is.; maintenance, £4 is. 4d.; and depreciation E2 Is. 8d. The total is therefore £14 19s. Total operating costs each week are £26 12s.

With this 5-tonner continuing to average 20.000 miles a year, the itemized cost of operating the vehicle for five years would be as follows: licences £162 10s.; wages £2,303 2s. 6d.; rent and rates £134 7s. 6d.; insurance £155 4s. 2d.; and interest £157 5s. 10d. The total standing costs are £2,912 10s.

The running costs amount to: fuel £1,595 16s. 8d.; lubricants £91 13s. 4d.; tyres £512 10s.; maintenance £1,016 13s. 4d.; and depreciation £520 .16s. 8d. Total, £3,737 10s. This gives the total operating cost, which I mentioned, of £6,650.

Shown as percentages of the total operating cost, these items are as follows: licences 2.44; wages 34.64; ient-and rates 2.02; insurance 2.33; interest 2.37; total standing costs, 43.80. The percentage of running costs are: fuel 24.00; lubricants 1.38; tyres 7.70; maintenance 15.29; depreciation 7.83; total running costs 56.20.

Even when assessed (as here) on the minimum basic rate, wages amount to the largest single item of the 10 operating costs. It therefore follows that any modification such as improved cab design, tailboard loaders or similar devices which improve the efficiency and daily productivity of a driver, must result in a substantial improvement in economic operation.

Similarly, because fuel is the second largest item of cost, even a small reduction in the rate of consumption could reap substantial benefits. In this instance, a 10 per cent. improvement would save almost £160 in five years.

Appropriate to the type of vehicle, the comparative operating costs of the 16-ton " artic." oiler would be based on an average weekly mileage of 1,000. With an unladen_ weight of 7 tons 15 cwt., the annual licence duty would be £125 (£2 10s. a week). Wages will now amount to £10 5s. 2d., the rate applicable to a basic week still being retained to facilitate comparison. Rent and rates are assessed at 15s. 4d. and insurance at £2 2s. 10d. a week, resulting from an annual premium of £107. Assuming an initial cost of £4,690, interest would amount to £2 16s. 3d. and the total standing cost to £18 9s. 7d. a week.

Oil Cheaper

With oil fuel costing 3s. a gallon and a rate of consumption of 9 m.p.g., fuel costs per week would amount to £21 12s. 6d., whilst lubricants would add £1 3s. 4d. Assuming a cost per set of £500, and a mileage life of 40,000, tyre costs each week would amount to £12 10s. Maintenance is reckoned to average slightly more-£12 10s. 10d.

Making appropriate residual allowances in respect of both the tractor and trailer, and adopting the same procedure as before, the depreciation cost a week will amount to £10 12s. 6d., giving a total running cost a week of £58 9s. 2d. and a total operating cost of £76 18s. 9d.

Over a five-year period, when 250,000 miles will have been operated, the total cost of the 10 items, together with the percentage in brackets, is as follows; licences £625 (3.25); wages £2,564 I ls. 8d. (13.33); rent and rates £191 13s. 4d. (1.00); insurance £535 8s. 4d. (2.78); interest £703 2s. 6d. (3.66); total standing costs £4,619 15s. 10d. (24.02).

Running costs amount to k14,614 I Is. 8d.. (75.98) made up of: fuel £5,406 5s. (28.11); lubricants £291 13s. 4d. (1.51); tyres £3,125 (16.25); maintenance £3,135 8s. 4d. (16.30); depreciation £2,656 5s. (13.81).

Compared with the 5-tonner, which averaged 400 miles a week, there is a noticeable difference in the ratio of the respective standing and running costs. For the smaller vehicle. running costs accounted for 56.20 per cenk of the total whilst for the 16-tonner this amount is increased to 75.98 per cent. It therefore follows that an even greater additional outlay would be justified on the larger vehicle on any modification or additional equipment which would result in a reduction of one or more items of running cost. S.B.

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