Two Vehicles
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ONE DRIVER
Calculating Rates for a Special Tipper Contract on which One Driver is to be Employed with Two Lorries
TERMINAL times are a vital factor in the proper assessment Of haulage rates. Particularly is this so with 'short-distance tipper work, in which terminal delays can result in reduced daily tonnage because of lost trips.
I have been asked to advise on quoting a haulage rate for the carriage of clay from quarry to works, using two tippers but only one driver, one vehicle being loaded while the other is delivering its load. By this means each vehicle is able to complete six trips per day during normal hours, each trip being eight miles return.
At first sight the reader may consider this to be an expensive way of combating terminal delays, but only an examination of the operating costs involved can determine the facts. Incidentally, in this instance, it must be assumed that the conditions of operation are' such that the stationary vehicle awaiting, or during loading would be in such a position as not to hinder other operations. Alternatively, provision for a minimum of shunting may have been mutually arranged. In other circumstances, neither of these assumptions may be valid.
Overnight Loading
To enable a prompt start to be made on the first trip of the day, it would facilitate matters if one of the two vehicles were left to be loaded overnight. At the same time, the additional expense involved in making special arrangements to return both vehicles to base each night would be avoided.
The inquirer states that both vehicles would be operated 44 hours per week exclusively on this contract. Allowing six trips per day, Monday to Friday, and three on Saturday morning, 33 trips per week per vehicle would be made. If 6-ton tippers were used, 198 tons per week could be moved by each vehicle.
Turning now to the operating costs for this type of vehicle, the first of the standing charges (licences) would amount to 14s. 10d. per week. Drivers' wages would be 165s. per week (Grade I), plus contributions to National Insurance and employers' liability. Together with an adjustment to make allowance for holidays with pay, the total wages charge would then be 172s. 5d.
(22 Rent and rates are put at an arbitrary ['mitre of Ills. pet week. Insurance is assessed at 32s. per week, allowance having been made both for operation under A licence and for recent increases in premiums. Interest is charged at 17s. per week, giving a total of 246s. 3d. per week for the five items of standing charges.
For the second vehicle, however, there will be only four items of standing charges-licences, rent and rates, insurance and interest--as only one driver is employed on the two vehicles. These total 73s. 10d., which, added to 246s. 3d., makes a total weekly standing charge of 320s. Id. for the two lorries and one driver Estimated running costs, in terms of pence per mile, are: fuel (petrol), 5.67d.; lubricants, 0.27d.; tyres, 1.76d.; maintenance, 2.71d.; and depreciation, 2.73d., giving a total running cost of 13.14d. per mile per vehicle. The 33 trips per week would involve a weekly mileage of 264, resulting in a totAl weekly running cost per vehicle of 289s. Id.
Establishment costs are based on a figure of 60s. per week per vehicle, but in these special circumstances, 80s., rather than 120s.., for the two vehicles and one driver would be a fairer proportion.
What it Would Cost
If only one vehicle and one driver were employed on this contract for a week, the operating costs would then be: Standing charges, 246s. 3d.; running costs, 289s. Id.; total, 5355. 4d. To this sum is added establishment costs of 60s., together with a profit margin of 20 per cent., giving a final total of 714s. 5d. As the one vehicle would move 198 tons per week, the charge per ton, to the nearest penny, would be 3s. 7d.
When two vehicles and one driver are engaged on the contract the corresponding figures would be as follows: Standing charges, 320s. Id.; running costs, 578s. 2d.; establishment costs, 80s.; total, 978s, 3d. With the addition of 20 per cent..profit, the total charge for the week should then be 1,173s. 11d. As 396 tons would be carried during the week by the two lorries, the rate per ton would then be 3s., again to the nearest penny.
In comparing these rates of 3s, 7d. per ton (one vehicle, one driver) and 3s. per ton (two vehicles, one driver) it will be noted that the latter figure represents a reduction of approximately 10 per cent., resulting from splitting the labour cost. This corresponds closely to the 19.91 per cent. which I showed last week to be the wages content of the cost of operating a popular type of vehicle 44 hours per week.
The inquirer makes no mention of the possibility of using a tractor unit and two semi-trailers adapted for tipping. If operating conditions permitted, this combination could provide the most economical method of performing this particular contract. If, however, the contract was of comparatively short term, the greater adaptability of the two rigid tippers for other work would probably be the deciding factor.
Consideration of the operating costs of such an articulated outfit provides an interesting comparison, although it may be more limited in use than the rigids, particularly as a tipper.
Standing charges would, of course, be higher than for a single rigid tipper. Allowing for a heavier unladen weight, the weekly licence charge would be 21s. Wages would remain the same at 172s. 5d. per week, but rem and rates would be increased to I5s. to make allowance for one tractor unit and two trailers. Insurance is increased to 40s. per week, whilst interest is estimated at 30s. per week. This is based on an initial cost of £1,000 for the tractor unit and £750 each for the two tipping semi-trailers. Total standing charges are, therefore, 278s. 5d.
As regards running costs, the tractor unit would travel 528 miles each week, compared with 264 miles covered by each of the two semi-trailers, in order to move the same weekly tonnage (396) as the two rigid tippers.
Fuel costs have again been based on a consumption rate of 9 m.p.g., which, at 4s. 3d. per gallon, is equivalent to 5.67d. per mile. Lubricants and tyres are estimated to cost 0.30d. and 1.81d. per mile respectively. Maintenance is reckoned at 2.02d. per mile, allowing for tipper operation and the higher mileage that the articulated outfit would cover, compared with the rigid vehicle. Because of the higher initial outlay, the cost of depreciation would be greater for the tractor unit and two semitrailers, and is estimated at 3.84d. per mile., Total running costs would, therefore, be 13.64d. per mile, or 600s. 2d. for the weekly mileage of 528. Adding the standing charges _of 278s. 5d. gives a total weekly operating cost of 878s. 7d.
Establishment costs would probably fall midway between those for one and two rigid tippers, namely, 70s. per week. A profit margin of 20 per cent. would also have to be included, giving a final total of 1,137s. 7d. Divided by the weekly tonnage figure of 396, the charge per ton when operating a tractor unit and two semi-trailers would be 2s. 10d.
This is only slightly less than the figure of 3s. per ton when operating two tippers and one driver. in comparing these charges, however, it has to be borne in mind that because 6-ton rigid tippers are produced in much greater quantities than tipping semi-trailers, there is a corresponding reflection in initial cost prices. These, in turn, are reflected in higher interest and depreciation charges.
On balance, therefore, in view of the wider range of work to which the rigid tippers could be put, two rigid tippers and one driver would provide the best compromise under the conditions described. S.13.