Comparisons Are Helpful
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One of the Objects of" The Commercial Motor' Tables of Operating Costs" is to Enable Vehicle Owners to Check their Expenditure Against a Recognized Yardstick
IN addition to providing guidance to newcomers to the industry "` The Commercial Motor' Tables of Operating Costs" arc extensively used by experienced operators. Comment was recently requested by a company established as long ago as 1860 as to what net and gross profit was obtained from five scheduled operations which they proceeded to detail. Whilst I do not propose to discuss the actual costs, a topic of general interest concerning the use of the "Tables" was raised.
There are two main purposes ill the publication of the "Tables bf Operating Costs" and this weekly series of articles on costing. First, they are intended to assist those who have little or no knowledge of commercial-vehicle costing or those who have some knowledge of the general principles, but insufficient operational experience to formulate reasonable estimates of such items, as for example, maintenance and depreciation.
The second purpose is to endeavour to assist established operators who are well acquainted with both the theory and practice of costing, but who, from time to time, wish to make comparisons with an impartial yardstick. With this in mind it is considered more helpful in such circumstances to provide a reasonable average estimate rather than to make the estimate so specific to the individual case that the result would merely duplicate the reader's own costings. , The latter remarks apply particularly to items such as wages, which may well vary according to individual bonus schemes. Unless I am requested to estimate for a specific job, the cost of overtime payments is not normally included, because it is more convenient to accept a standard figure for wages regardless of the weekly mileage involved. Whilst this admittedly cannot be strictly accurate, a practicable alternative is not readily available. This is because no scale of drivers' hours varying according to mileage would he equally applicable to a Wide range of conditions. In practice, if charges have been calculated on total operating costs as recommended in the "Tables," the whole of the standing costs should have been met out of revenue received in payment for the first 94 hours of vehicle operation. Therefore, any increase in both the amount and rate of pay necessitated by overtime working will be more than offset by the absence of any other standing cost.
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A READER says he operates a tractor unit with an unladen
weight of 6 tons and ballast weighing a further 6 tons. It is used to draw a trailer designed to carry machinery with an unladen weight of 8 tons, giving a total unladen weight of 20 tons. He asks whether he is correct in assuming that when travelling empty, or with a 12-ton load, making 32 tons in all, the vehicle comes within the Construction and Use Regulations. Additionally, if a load in excess of 12 tons is carried (making a total in excess of 32 tons), does the vehicle automatically become a special type?
From the information provided it Would appear that this combination could be used under the Motor Vehicles (Authorization of Special Types) General Order, 1955, at a gross laden weight in excess of that permitted by the Construction and Use Regulations, only for the carriage of abnormal indivisible loads as defined in Article 13 of the General Order, subject to compliance with the conditions and restrictions laid down in Article 14.
When carrying loads which can be broken down the maximum laden weight is restricted to that laid down in the • Construction and the Regulations. ,•
I T is urrderstzindable that hauliers'. customer's May request rates to be expressed in terms of units Peculiar to their indastry, Standards of timber are referred to in a reader's inquiry in which he asks for facts and •figures to substantiate'. an increae in rates *high he is about to negotiate.
Although it is both natural and advisable that-the..operator should. Ode attention to the peculiarities Of the •ctistiarrier'.i trade. anck resulting traffic, this should not be allowed to invtlidatethe basic principles of costs-time and 'milerige-06 which. charges are. finally formulated, • . As is the case with so many inquiries, no average weekly mileage was stated, and this was therefore assnmed to he 300, on the basis of the type -of journey, this particular -haulier was operating. Self-employed, he claimed to average 66 hours per week, using a 7-ton petrol-engined vehicle: The annual licence, including a proportion of the A-licence fee, would cost £37, the equivalent of 14s, 10d. per week. An exception to the rule regarding overtime working is made here, because the haulier is solely employed by one customer. Wages are thus assessed at £15 7s. lid. Vehicle insurance is reckoned at 27s. 5d. and interest at 16s. 9d., giving a total weekly standing cost of £18 6s. I Id. Adding a third to this sum to cover both the profit margin applicable to contract work and overheads gives a weekly standing charge of £24 9s. 3d., or about 7s. 5d. per hour, assuming 66 hours per week.
The five items of running costs per mile are estimated as follows; Fuel 5.10d. (based on a price of 4s. 3d. per gallon); lubricants 0.26d.; tyres 1.60d. (assuming a life per set of 30,000 miles); maintenance 3.48d.; and depreciation 1.97d.; total 12.41d. Adding the same percentage as before the charge per mile comes to 16.55d., or approximately is. 41d. 1 will now apply these figures to the examples given of a
typical day's work---a 60-mile round trip taking 11 hours to collect and deliver, on average, three standards of timber. The mileage charge would amount to £4 Os, 6d. and the hourly charge to £1 4s.4,7d., giving a total for the day of £8 4s. ld. The cost per standard would thus work out at £2 14s, 8d.
ANOTHER request for details of operating costs concerns a proposal to deliver eggs to London on a 7-ton oil
engined vehicle operated under C licence. In anticipation, presumably, of some empty running, the suggested vehicle would be fitted with a two-speed axle and would cost around £1.950, The journey to London would be made two or three times per week and no loading or unloading delays are expected.
Assuming that five return trips are completed each fortnight, weekly mileage will average 1,200. Wages will be correspondingly assessed at the legal six-day maximum of 66 hours. Weekly standing costs would then read: Licence, 17s.; wages, £15 7s. 11d.; rent and rates, Hs.; insurance, 165.; interest; IA 3s. 5d.; total, £18 15s. 4d.
Under the favourable conditions of this type of operation fuel consumption should be below average and is assessed at a rate of 17 m.p.g. It is also assumed that fuel would be purchased in bulk, resulting in a fuel cost per mile of 2.56d. Lubricants are estimated to cost 0,25d., tyres 1.76d., maintenance 2.13d., and depreciation 3.15d. per mile; total, 9.94d. Total operating cost per week would thus be 1:68 9s. 4d., made up of standing costs £18 15s, 4d, and running costs of £49 14s. Costs per fortnight (live return trips) would he £136 18s. 8d.
Assuming 35 tons were delivered, and excluding payment for returned empties, the costs per ton would amount to £3 18s. 3d. This would not, however, include any allowance for overhead costs, which must inevitably be peculiar to each and every ancillary operator.
AN interesting variation in trailer work is revealed in another reader's inquiry. He at present employs a 7-ton van on a return trip from A to C of about 500 miles. The distance from A to B is some 200 miles, and from B to C 50 'miles. It is now proposed to tow a two-wheeled trailer of i0-15--cwt. capacity from B to C .and back to B. The object is to eliminate double handling of products, which are processed at depots at B and C, The reader asks for comments on the legal aspect of this arrangement.
First, as regards additional duty payable, the annual rate is £10' where the unladen rate of the towing vehicle does not exceed 2+ tons, or 115 if it is between 2+ tons and 4 tons, which is 'presumably applicable in this case. In addition, when a Vehicle draws a trailer an attendant must normally be carried. One of the several exceptions, however, is when the trailer has an unladen weight of under a ton and is equipped with overrun brakes. If, as seems likely, the trailer purchased by this reader cask within this category, an attendant would not be req iii red.
"j HAVE a 1957 model 5-cwt. van, fitted with heater, which A has done about 10,000 miles; and I wish to fit side windows Co the rear of the driver's seat so that I can legally do more than 30 m.p.h.," writes a reader. He goes on to say that preliminary inquiries reveal that additional purchase tax in the region of £110 would then be payable. He considers this to be excessive and asks for comments.
The legal position is that in accordance with the Finance Act; 1958, a mechanically propelled road vehicle which is constructed or adapted solely or mainly for the carriage of passengers or having to the rear of the driver's seat roofed accommodation which is fitted with side windows or is constructed or adapted for the fitting of side windows, is subject to a purchase tax of 60 per cent. on the whole vehicle. Goods vehicles, however, are subject to a purchase tax of 30 per cent. only on the chassis.
When a conversion is made, irrespective of whether the vehicle is new or not, the additional tax payable will be calculated on the current wholesale value of the vehicle (less any tax already paid on the chassis).
The effect of the regulations on the price of a typical 5-cwt, van and private car built on is similar chassis is as follows: in round figures the basic price of the 5-cwt. van, new, is £365, plus purchase tax of £55-a total £420-and for the private car the basic price is £380. purchase tax £190 and total £570. The difference in fax, when new, is therefore around £135 and any conversion made later from van to car would incur a proportion of this difference relative to the age of the vehicle. The actual amount could be determined only by reference to the local Customs and Excise office in accordance with individual circumstances.
COULD you please tell me if it is in order to drive on the public highway a vehicle which is steered by its rear wheels?" The reader then goes on to specify the type and make of vehicle he has in mind.
All motor .vehicles used on roads in this country have to comply with the Motor Vehicles (Construction and Use) ,Regulations, 1955, and as subsequently -amended. -Although the Regulations do not specifically refer to ,Vehicles :steered ,hy the rear. wheels, in practice it is generally impossible for such vehicles to comply with the provisions of Regulations 34, 38 and 43, relating to " overhang" Which term is defined in Regulation 3( l).
There arc a few exemptions to these-Regulations, and in addition straddle carriers which use roads to a limited extent under Article 9 of the Motor Vehicles (Authorization of Special Types) General Order. -1955, are also exempt . from the
"overhang" requirements. S.B.