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PROBLEMS OF THE HAULIER AND CARRIER.

26th June 1928, Page 67
26th June 1928
Page 67
Page 68
Page 67, 26th June 1928 — PROBLEMS OF THE HAULIER AND CARRIER.
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Which of the following most accurately describes the problem?

Showing How Dear a Cheap Lorry May Be. A Typical Case of the Advantage Accruing from the Use of New Vehicles.

mWO things have occurred to incline me to refer

once more to the subject of second-hand vehicles and the wisdom—or otherwise—of buying them for haulage work. One of these things was an article in an American motor paper; the other was an actual experience of a haulier in this country. I will deal with the views of the American writer first, as being somewhat less important, although still interesting, in this connection.

The "Jitney Bus."

The writer of the article was discussing various phases of trade and industry, and referred to enterprises which we in this country should dub ".catchpenny "; that is to say, enterprises which quickly come to full growth and as quickly, or even more quickly, fade away again. Amongst other things he touched on the hire-ear business in America, and in particular to a phase of it now long dead and gone, but widely popular and much discussed a few years ago—the "jitney bus."

It may be that few of my readers have ever heard of this form of public-service vehicle, which never came into operation here, never could and never will, so long as our laws remain substantially as they are. "Jitney" is the slang term for a five-cent piece, that being the regular fare charged by operators of these "jitney buses," which were, as a matter of fact, sim

ply nondescript cars of any age or make, pressed into service by their owners, who were equally nondescript, If perhaps not so dilapidated. These buses were run in competition with the trams, to bring stburban dwellers townwards in the morning and to take them home again in the evening. If the reader will recall for a moment the scenes on the roads leading into our bigger cities and towns during the time of the General Strike, and if he wM for a moment imagine that all those ears, of all shapes and sizes, which were at that time used to bring strike-bound workers to business, were actually plying for hire and charging each and every passenger 21d. for the run into town, he will have a fairly accurate idea of the state of things existent when the "jitney bus" was having its day in the States, and that day, although brief, was certainly hectic while it lasted, and memorable.

The motto of the owners of these hoses, if we may honour them with that name, was clearly "small profits, quick returns." The fare was the same, no matter what the distance. Passengers were picked up whenever and wherever they appeared, and as the fares were really low and the idea novel the scheme caught on like wildfire, and became popular, as it were, in a day. The business, however, died as quickly as it came; it died a natural death, for each operator "passed out when he had to replace his equipment."

The italics in the last paragraph are mine; the words, pregnant with meaning to nine hauliers out of ten, are those of the American writer.

Now, the other incident might very fairly be described as an object-lesson in the unwisdom of purchasing second-hand vehicles. I called on a haulier about some little matter of business. As a matter of fact, he had written to the Editor asking for some advice on a matter of haulage rates, and I had gone down to see him about it. I found him busily engaged in repairing one of two broken-down lorries. I third vehicle was partly dismantled, and obviously undergoing some sort of repair. A fourth lorry was in the garage, idle. It transpired that one of the two brokendown machines had gone wrong when engaged on a contract. The second machine had been sent out to tow it in and had itself broken down on the job. Another vehicle had to be requisitioned to bring in the pair of them. That machine was on the road completing the contract on which lorry number one had broken down.

Trouble with Second-hands.

The fleet totalled five in all, all accounted for in the above statement. All were old, war-worn machines, fit only for the scrap-heap. At least, that was my opinion. It was not that of the owner, who was obviously proud of them, and insisted that they gave him good service, notwithstanding the fact, disclosed • in conversation, that he was more' or less accustomed to troubles of the kind I was witnessing.

Just let us examine for a moment the financial aspect of these breakdowns. Here are three lorries all idle—one for a couple ofdays, one for four days and one for a week. Two days would, have been enough to repair any one vehicle, but there were only facilities and stuff to repair one at a time. All the standing ,charges are going on all the time, so that for one lorry about £2 is lost, for 'another £4 and for the third £6—a total of £12 actual loss in that one week. That is, for standing charges only. There are also the establishment expenses to consider. They amount to round about £3 for the three machines, bringing the total to £15; and, above all, there is the loss of profit to consider. Each of these naachinss ought to be bringing in a profit of at least 15 a week. As they are idle ,their owner may be said to be losing that sum, or a proportion of it, according to the length of time the vehicles are idle. In this case a fair approximate figure for the loss is £7 10s. so that altogether this particular -haulier was £22 10s. out of pocket for that week. • He was that amount poorer than he would have been had he owned lorries in good going order, instead of machines liable at any minute to lie down on their jobs. If that happens half a dozen times a year (and my experience goes to show that the possibilities are that six is the minimum annual number of occasions of that kind), then the loss amounts to £135 per annum.

Buy New Lorries So Soon as Possible.

I am not going to pretend that I think it possible for every haulier to invest in new lorries at the outset. I know very well that is out of the question in many cases, even with hire-payment terms so easy as they are. I do think, however, that hauliers should begin to think about buying new machines sooner than they do, and I am sure that it is far more profitable to have a couple of well-found lorries than five or six which are always giving trouble, and which, as a matter of fact, only do, all told, the same work as could be done by a couple of efficient machines.

Six second-hand 4-ton to 5-ton lorries cost upwards of £1,200. The latter sum would buy one new lorry outright, and afford a substantial deposit on a second one purchased on the hire purchase.

The cost per, annum of running six old lorries, assuming that five only are actually in commission, B42

and that, on the average, three only are at work throughout the year, works out as follows (50 weeks to the year) :—Licences, £324; wages, £900; rent aril rates, £150; insurance, £115; interest, £60. Total of standing charges, £1,549. (It should be noted that the items, licences, rent and rates, insurance and interest have all to be calculated for six machines, although only five are in regular use, since any one of the six must be ready to go on the road, and does, unfortunately, frequently go on the road, in substitute for another broken down.) Now for running costs. About 600 miles per week will be the average for the' whole fleet The costs will inevitably be higher than those given in our tables, because the machines are not in good condition; 7111. per unit will be the minimum, and the total for the year will be £937 108.

Altogether, then, the haulier with six more or less dilapidated lorries on his hands spends practically £2,500 a year in persuading them to run 600 miles a week between them. For £2,500 he gets a mileage of 30,000 only, so that each mile costs him 1s. 8d.

Assuming that his establishment expenses are only £150 a year—and that is very low—and that he desires a profit of no more than 1600, which is also very little for a man with six lorries, then he must make at least 13,250 a Year, which means that heinust get 2s. 2d. per mile all the year round. I will leave that figure without further comment, only suggesting that every reader should ask .himself for how many miles a rear does he get that return.

So Easy—With New Machines.

• Let us now examine the case of the man with two new lorries. His expenses are :—Licences, £108; wages, £360; rent and rates, £50; insurance, 140; and interest, £60. Total of standing charges, £598; say, £6)0.

His running costs will be less than that shown in our tables, because he will be operating modern wellfound and well-kept machines. (There is some satisfaction in keeping good machines in good order.) Instead of 7id. per mile being his minimum, 6d. will be his maximum, and he will easily do 600 miles a week with these two machines for £750, and his total operating costs will therefore be £1,350 for 30,000 miles, which is only 10.8d. a mile, practically half the cost to which the other fellow with six lorries is put.

His establishment expenses should be less, too. He should not need more than £100, and if he wants £550 a year profit his revenue need only be £2,000. To get fuck for 30,000 miles he must charge 1s. 4d. a mile as against 2s. 2d. What a competitor!

The Instalments.

Even if we make due allowance for the instalments on the purchase of the second lorry—suppose they amount to 130 a month for two years—we need only add 3d. per mile to the charge, making that 1s. 7d. per mile, to clear the monthly payments off and still make the 1550 a year profit.

And now to refer once again to what our American friend said. Each operator "passed out when he had to replace his equipment." The mortality amongst small haulage businesses is great, and it is in part due to the use of unsuitable vehicles and in part to cutting prices, the latter 'due to ignorance of the cost

of operating these unsuitable machines. The six second-hand lorries, decrepit to-day, will be useless in a year or so. Their owner, working at a loss all the time, will be unable to replace them. He will, as my contemporary put if, " pass out." The two new lorries, on the other hand, will be good ten years hence, whilst their owner, working all the time on an ample margin of profit, will be quite unable to say what has become of them or where they are. He will have replaced them by other new and up-to-date machines long ere this. ' ./

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