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A 30 m.p.h. Limit Economically a Mixed Blessing

25th June 1948, Page 44
25th June 1948
Page 44
Page 47
Page 44, 25th June 1948 — A 30 m.p.h. Limit Economically a Mixed Blessing
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Which of the following most accurately describes the problem?

pROCEEDING with any consideration of the benefits— or otherwise—which are likely to be derived -from the expected increase to 30 m.p.h. in the speed limit of heavy goods vehicles, I propose now to deal with the second and third of the routes which have already been described. As readers will remember, I have selected as an example a 10-ton oil-engined lorry and have shown that the fixed charges per,hour; exclusive of drivers' wages, amount to 7s. 3d., whilst the running cost is 5.6d, per mile.

lt is assumed, in the case of those journeys on which return loads are-frequently obtainable, that the outward load is high-grade traffic and the return load low-grade traffic. As is to be expected in the circumstances,the times for loading and unloading vary according to the class of traffic. On the outward, run, two hours are necessary. to load the vehicle with a full 10 Ions and a similar period to unload.On the return journey, an hour at each end is sufficient-for

loading and unloading. • Provision is made for a short run from the point of delivery of the outward load to that at which the return load is picked up, and from the delivery point of the return load to the garage or headquarters whence the next journey begins. The distance is taken to be five miles and the time needed to traverse it, half an hour.

At the beginning and end of the journey there is assumed to be a 10-mile stretch of more or less congested running over which the average speed is 12 m.p.h. Consequently, 20 miles of each journey in each direction occupy an hour and 40 minutes. The balance of the journey is assumed, in the case of 20 m.p.h. vehicles, to be traversed at an average speed of 18 m.p.h. and in the case of 30 m.p.h. vehicles, to be covered at an average of 27 m.p.h.

Three Popular Routes Three fairly regular traffic routes from London have been cited as examples—first to Leicester, a distance of 108 miles; second to Leeds, 192 miles, and third to Blackburn, 210 miles. A most important-assumption is made, namely, that drivers do not exceed the speed limit.

It has already been discovered, in the first of these three articles, which dealt With one-way traffic only, that, so far as the haulier's traffic is concerned, an increase of permitted speed would be a miNed blessing. At least, it would be if we adhered to the-theoretical method of assessing rates on the basis of cost plus a fixed percentage of profit. That discovery does not need figures.. or extended calculations to

make it clear. The increase in speed from 20 m.p.h. to 30 m.p.h. must obviously bring about a reduction in cost of transport, so that if the haulier's profit is cost plus 20 per cent., his net return must diminish in proportion to the cost, and unless by some reorganization of his traffic he can increase the number of loads carried per week, operation under the proposed new rule will be less profitable than it is now.

A Limited Advantage, .

In the first article it did appear that in one case the haulier benefited, but that was 'because on the second of the two routes (London to Leeds) the increase in speed was sufficient to enable three return journeys to be run per week, instead of two. Over the first route of 108 miles the vehicle was already doing three journeys per week at the 20 m.p.h. limit and it was impossible to increase to four. On the third route (London to Blackburn), although by increasing the speed limit from 20 m.p.h. to 30 m.p.h. the operator was able to complete two journeys within a normal week, there was insufficient time left to make a third run, and his profits diminished accordingly.

In the article which appeared last week I dealt with the shortest of the three routes on the assumption that return loads could be picked up, and figures showing comparative costs and earnings when rates were assessed on the basis of cost plus 20 per cent, profit were set out. Those figures indicate a big drop in the net profit which the haulier makes. Moreover, there is no way in which that profit can be inCreased. At 20 m.p.h. three journeys occupy 57 or 60 hrs., but at 30 m.p.h. the minimum is 48 hrs., so that another journey, presumably requiring 16 hrs., would bring the total_ of hours per week to 64, which is more than can reasonably be expected of any driver, week in, week out. In these articles I am not concerned with the cases in which, by the employment of two crews, a vehicle is able to be kept at work up -to 110 hrs. per week, or even more.

1 will 'now deal in-detail, with the London-Leeds run of 192 miles in each direction, first assuming that the speed limit is 20 m.p.h. I will take a .series of operations in Sequence, so as to ascertain the total time necessary on a complete round journey, assuming that the full load i taken out and a return load brought back, subject to the Conditions already described.

First, two hours are spent in loading. The initial 10 miles are covered -in 50 mins at an average of 12 m.p.h. The next 172 miles are traversed at an average ot ill m.p.h. and take 9 hrs. 33 mins. Fifty minutes are needed for the final 10 miles at 12 m.p.k and at the end two hours to unload. The total is 15 hrs. 13 mins, and will be regarded as 151 hrs.

Baying unloaded, the vehicle runs five miles to the place where the return load is to be picked _up. That journey is assumed to take half an hour. • The return load is picked up in an hour. The return journey takes 50 mins. for the first 10 miles, 9 hrs. 33 mins.. for 172 miles, and 50 mins. for the last 10 miles. An hour is required to unload and 30 mins. to get back to the garage. The total is 14 hrs. 13 mins., say, 141 hrs.. • The time needed for the complete round journey is thus 30 hrs., and it is reasonable to•aSsume that, if the loading be regular and traffic be reasonably free, two journeys will be completed • Per week. The distance (192 miles each way, plus five miles at each' end for Picking up the return load) is 394 miles, or 788 miles per week. The cost per " week, on the assumption that those (wci journeys are covered and that a return load is carried every' time, will be: 60 hrs. at 7s. 3d. per hr., .£21 -15s.; 788 miles at 5.6d. per mile, 118 7s. 9d.; wages, subsistence and expenses, 19 15s.; total. £49 17s. 9d. This is the net cost to the Operator of carrying 40 tons, so that the cost per ton is a shade short of £1 5s.

To ascertain what we are regarding as the minimum rate, that is to say, the rate which must earn a profit on cost of

20 per cent., he must obtain an average 10s. per ton.

We are assuming that he is carrying high-grade traffic in one direction and low-grade traffic on return. If, therefore, he obtains £1 15s. per ton for the high-grade traffic, the rate of El 5s. per ton for the low-grade traffic will bring him the revenue he needs. The weekly return on the assumption that the average rate of El 10s. per ton is obtained is £60 and the profit is L10 2s, 3d.

One Return Load a Week

In considering the economic aspect on the assumption that only one-return load is obtained in a week, a new statement of cost must be made out, as the weekly mileage is now reduced by 10 to 778 and the number of hours from 60 to 57. That reduction of hours arises from the diminution of loading and unloading time, plus half an hour at each end in the five-mile journey to pick up the load at the terminal and return to headquarters, having dropped that load.

That new statement of cost is thus: 57 hrs. at 75. 3d. per hr., £20 13s. 3d.; 778 miles at 5.6d. per mile, /18 3s.; wages, subsistence and expenses, £9 Ils. 9d.; total, £48 8s. For that amount 30 tons have been carried, instead of 40. The cost per ton is noW'£l 12s, 3d., and 11 20 per cent, be added to arrive at the average minimum rate, we obtain the figure of £1 18s. 8d. per ton.

Again proceeding on the assumption that the outward load is high-grade and the return load low-grade traffic, we should obtiin approximetely £2 5s, per ton for the outward load and £1 12s. or so for the return load. (These figures are only approximate.) 'The' minimum revenue per week, if an average all 18s. 8d. be obtained, is £57 10s and the profit £9 2s.

We must now consider what will happen if the operator be foolish enough to quote rates on the assumption that he is going to obtain a return load on every journey, and misses a return toad in any week.. Presumably he quotes the figures for regular return loads, namely, 11 15s, for the outward journey and £1 5s. for the return run. In that case, his revenise is for 20 tons at £1 15s. (£35) and for 10 tons at £1 5s. (£12 10s.). a total of £47 10s., so that he loses 18s. during that week.

What will happen when this law-abiding haulier, with his law-abiding drivers, is permitted to operate his 10-ton vehicle at a maximum of 30 m.p.h.? In that case he will be able to travel 172 miles of the journey at an average speed of 27 m.p.h., instead of, as now, 18 m.p.h. The time needed to traverse that distance under the new conditions will be

6 hrs. 22 mins., instead of 9 hrs. 33 mins., showing a saving of 3 hrs. 10 mins. (say, 31 hrs.) in each direction, which means that the round journey will take 61 hrs. less than it does now. The times, therefore, assuming that return loads are obtained for both journeys, will be reduced from 30 to 231 hrs., and in order to Complete two round journeys pet week, 47 or 48 hrs. will be needed.

The statement of costs now becomes: 48 hrs. at 7s. 3d, per hr., £17 8s.; 788 miles at 5.6d. per mile, £18 7s. 9d.; wages, including subsistence and expenses, £7 19s.; total, £43 14s. 9d. For that amount 40 tons have been conveyed. so that the net cost per ton is it Is. Lid. The average rate which must be obtained in order to get that minimum revenue of cost plus 20 per cent, is £1 6s. 4d, per ton, which will be made approximately if he obtains £1 10s, per ton for the outward traffic and El 2s, 8d. per ton for the return.

The weekly revenue on the assumption that he does obtain the average rate of it Os. 4d. per ton will be £52 13s. 4d. and the 'profit per week £8 18s. 7d., which compares most unfavourably with what he could now obtain under the present conditions with a 20 m.p.h. limit (£10 2s. 3d.).

Costs of Operation at 30 m.p.h.

If under a 30 m.p.h. limit he obtained only one return load per week instead of two, the times and mileages would be reduced correspondingly and the cost would be: 44 hrs. at 7s. 3d. per hr„ £15 19s.; 778 miles at 5.6d. per mile.

£18 3s.; wages, subsistence and expenses, £6 16s.; total, 140 18s. That is equivalent to a cost per ton of £1 7s. 3d., which necessitates a minimum average rate of £1 12s. 9d. per ton and the rates may be, say, £1 17s. 6d. for the outward traffic and 11 8s. for the return traffic.

The revenue, at the average rate, will be .149 2s. 6d. per week and the net profit 18 4s. 6d., compared with £9 2s. under the 20 m.p.h. limit.

Now to run quickly through the ligures for the London Blackburn route of 210 miles. At a limit of 20 m.p.h. 62 hrs. per week are required for two round journeys, picking up return loads on both, and the mileage is 860. The cost therefore becomes: 62 hrs. at 7s. 3d. per hr., 122 9s. 6d.; 860 miles at 5.6d. per mile, £20 13s. 4d.: wages. subsistence and expenses, £10 2s.: total, £53 4s. 10d. The average cost per ton of 40 tons carried is £1 6s. 8d,, and an average minimum rate with a 20 per cent, profit return is £1 12s. Suggested rates for outward and return traffic are Li 18s. and 6s. respectively. Revenue per week is £64 and net profit £113 15s. 2d.

Assuming that only one back load per week is carried, the figures now become: 59 hrs. at 7s, 3d. per hr., 121 7s, 9d.: 850 miles at 5.6d. per mile. £19 16s. 9d.; wages, subsistence and expenses, 19 10s.; total. £50 14s. 6d. Cost per ton for carrying 30 tons is £1 13s, 10d.; average minimum rate, £2 Os. 6d.; revenue per week, 160 15s,. and profit £10 Os. 6d.

If the speed limit were increased to 30 m.p.h., the time for two complete round journeys, with return loads on both occasions, would be reduced from 62 hrs. to 55 hrs. and the figures for cost would be: 55 hrs. at 7s. 3d. per hr.,

£19 18s. 9d.; 860 miles at 5.6d. per mile, 120 13s. 4d.: wages, subsistence and expenses, £8 14s.; total, £49 6s. Id. The tonnage carried during the week is 40. so that the net cost per ton is £1 4s. 8d. The average minimum rate must be £1 9s. 6d., at which the revenue per week will he 159, showing a net profit of £9 13s. lid., as compared with £10 15s, 2d. under the 20 m.p.h. limit.

With only' one back load instead of two, the figures are: 52 hrs. at 7s. 3d. per hr., £18 17s. 9d.; 850 miles at 5,6d, per mile, 119 16s. 9d.: wages, subsistence and expenses, £8 2s. 2d.: total, £46 16s. 8d, The cost per ton is 11 lls. 3d. and the average minimum rate lit. 6d., which gives a revenue of £56 5s. and a net ..profit of 19 8s. 4d., as against £10 Os. 6d. under the 20 m.p.h.

limit. S.T.R.


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