Mark-up mix-up
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In a recent questions and answer column, you featured a question from an owner-driver starting in road haulage and I am surprised that you did not clarify an obvious misconception on the part of the questioner in comparing a 20 per cent return on capital employed with a retail trader's mark-up of 331/3 per cent, which he mistakenly regarded as a profit margin_
The 331/2 per cent mark-up not only has to provide the retailer's profit margin, but also cover all his operating costs, overheads, etc. The actual extent of his profit margin will depend on the level of such costs, whilst his • return on capital employed will depend on the level of profit margin and the number of times he turns over his capital during the course of the year. .G. ALLEN
Director and Secretary
Bulwark United Transport Ltd. Corporation achieve a clear understanding of the points at issue Unlike most state industries we have no monopoly, and must operate as a relatively small section of a fiercely competitive industry. This renders NEC more vulnerable than most public corporations to delays in decision-making by the 'owners:. but our sponsoring Department is well aware of our special position and is vigilantly responsive. SIR DANIEL PETTIT Chairman National Freight Corporation, London WI.