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PROBLEMS OF THE HAULIER AND CARRIER.

24th November 1925
Page 33
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Page 33, 24th November 1925 — PROBLEMS OF THE HAULIER AND CARRIER.
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Which of the following most accurately describes the problem?

The Ton-mile—Its Features, Good and Bad—Its Use and Abuse.

AS an expression, the ton-mile is familiar amongst the members of the hauling and carrying industry. To those who grasp its meaning and use, it can be of great service, but to those who are new to the job and have not fully realized the intricacies of the term there Is much to be said against it. Broadly speaking, the haulier or carrier in a small way of business is well advised to give the ton-mile a wide berth, as its thoughtless use often involves losses which become serious before the victim has a chance to find out where his trouble lies.

Before discussing the merits and demerits of the term, what is a ton-mile? Mileage multiplied by the load, expressed in tons, gives the answer in ton-miles. For example, one ton carried one mile equals one ton-mile, half a ton carried four miles equals two ton-miles, ten tons carried five miles equals 50 ton-miles, and so on.

So far, the matter seems quite simple and the calculation straightforward; now we come to the uses and misuses. As a factor in compiling statistics it can be very informative, but exceptional care is required in its adoption. For instance, a large concern Owns a fleet containing two makes of vehicle of the same load capacity. At the end of the year the managing director is anxious to find out how the types compare as regard cost, and he asks the fleet manager accordingly. Let us suppose the lorries

• in question have been transporting the company's goods in a consistent manner. By means of the ton mile a comparison can be made, but—and it is a very big but— circumstances must be similar in the ease of all vehicles to be dealt with, or even this basis is of practically no value.

Should one group of lorries have run, say, 50,000 miles in all and carried on the average two tons, the ton-mileage will be 100,000. Another group. of five lorries also carrying an average load of two tons does 30,000 miles, the result being 60,000 ton-miles. Assuming that the costs for this amount of work are x2,470 and 11,989 respectively, the costs per ton-mile work out at 5.9d. and 7.9d.

At first sight, one make of lorry runs much more economically than the other on the basis of cost per ton-mile. Why should this be? Because we are comparing dissimilar conditions, the total of one set of five vehicles is 20,000 miles per annum greater than the other. This example is merely quoted to emphasize the importance of dealing with exactly similar cases for comparison on the ton-mile scheme. The difference of 2d. per ton-mile is accounted for solely by the reduction of cost per mile run by reason of the greater distance covered by one vehicle group. Another important factor is the dead mileage. In the example in question there is presumed to be no waste running. If there had been, this would have been ignored, as only loaded miles count in ton-mileage calculations, and any variation between the two groups would have entirely altered the relative cost per Mile in reality but not shown up in figures.

Continuing with this example, the director cannot really get the comparison he wants. There seems to be a clear difference of 2d. per ton-mile, but he is not told that one group has done more work than the other and that running light may have been necessary in one case more than another. The total operating costs go _up every mile, whether it be run light or loaded, but the ton-mile ignores the unloaded distance, and, therefore, loses its value unless absolute similarity be ensured in the cases to be compared.

The foregoing instance demonstrates the relatively small field in which the term ton-mile is of much practical value to the small user. To the distributor of goods who delivers from door to door, the expression is, practically speaking, of no use at all. If anyone suggests quoting on a ton-mile basis for distribution work, try to substitute another basis, as you will find it commercially very undesirable. You will want a readyreckoner on the vehicle and a booking clerk, in addition to a driver I Mileage, or time and mileage combined, is the proper plan for computing charges in this type of delivery work and in the majority of other haulage.

Even though deliveries be few and far between, compared with house-to-house work, the ton-mile is still an unfavourable proposition. The general principle is to allot the dead mileage to various customers. Certainly it may be done, but, as a rule, it involves too much clerical labour and, therefore, puts up the establishment costs. The better to illustrate this matter, I propose giving another fictitious example. A haulier does a trip of 10 miles out, carrying on his two-tonner 5 cwt. for three miles, 7 cwt. for four miles, 8 cwt. for six

10 cwt. for eight miles, and another 10 cwt. for ten miles. The lorry leaves home fully loaded with its complement of two tons, and charges are made by the proprietor for three-quarters of a ton-mile, 11 ton-miles, 21 ton-miles, 4 ton-miles, and 5 ton-miles respectively. In all probability the last few miles outwards are gaining no-profit, as the vehicle is running much below capacity and the charge rate is usually a "flat" one. The return journey is generally done at a loss. The flat rate per ton-mile must be high in the first instance to avoid loss, in which case the customers will object to paying high prices to counteract the unprofitable running occasioned by others.

On certain types of work the customer insists on a price per ton-mile in such matters as municipal contracts and so forth. To those who are forced to use the expression, a little advice may be helpful. It is Important to remember that only the loaded miles count, and forgetfulness of this fact will be expensive. Empty running is not paid for ; therefore, when sitting down to work out the charges per ton-mile, see that you include an allowance for those dead miles. You cannot charge for them as such, but there is nothing to prevent you adjusting the cost per ton-mile to compensate; in fact, you will be foolish if you do not.

The most simple plan is to total up the ton-mileage and divide by the lorry's capacity, thus getting the loaded mileage; add 100 per cent. for the miles traversed when running light or as the case may be, and carry on with the calculation of the basic figure per ton-mile. Another item to be remembered is that, when transporting, say, two tons on a three-tanner and charging at a flat rate per ton-mile, the vehicle does not run at two-thirds its normal cost of operation—no such luck If your customer be 'likely to give these part loads at all regularly, it must be clearly pointed out beforehand that a minimum charge will be fixed, and if he must run a vehicle below capacity other than in emergency, the minimum charge must be made, having due regard to the cost of operation.

I have come across instances of hauliers who make a practice of:charging soimuch per ton-mile, irrespective of the size of vehicle. One, for example, runs a one-tonner and a three-tonner, but still asks the same figure per ton-mile whichever is used. In this case there is too much of the ton and too little of the mile. Operating costs are, after all, at the root of all calculations, or should be. A vehicle costs so much to rim and keep ; you want so much profit and allowance foroverhead costs. Get the total and then convert it into a charge per ton-mile if you have to, but get down the bed-rock of operating costs every time. Flat .ate sounds very easy, but it often renders the task of mak. lug ends meet more than ordinarily difficult.

S.T.R.

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