S.T.R. LETS THE HAULIER DO IT!
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FOR some aspects of the Army methods of Instruction I have a . great admiration. One which has „always tickled me has been the way in which the instructor, in the middle ot describing something, will suddenly bark out a question to one of those in the class. The idea behind the method is to ensure that everyone in the :lass is on the alert and it is indeed an excellent way of making sure that e.vcryone present. is -paying strict attention to what is being
told to him _
1 have been meeting one or Iwo ex-Service men lately, who have been able to persuade Licensing Authorities to permit them to enter the industry. 'They seemed to have precisely as much idea of the business side of haulage as did their predecessors of 25 years ago; that is to say, no idea at all—and I have been trying the Army method on them, making them work out their own solutions to the problems they put.
The description of one of these conversations may be helpful to many others who are in the same boat, and I am going to relate it to them, making, of course, modifications to the story to ensure that no confidences are net rayed, but maintaining the usefulness of the problem itself.
This was the case of a man who had been invited to lender for the conveyance and distribution of bagged coal.
Short-distance Coal Haulage What would you do about this?" he asked. and put a letter before me in which a local agent asked him to collect coal from a wharf, take it to town six miles away, there to receive instructions from the coal agent's local depot, and subsequently to deliver the coal retail to householders in the district. He had then to return and pick up further loads of coal for delivery in bulk for one or other of two depots, the first one about 12 miles away, the other 17 miles. The prices of the secoad half of the job were stipulated as .5s. 6d. and 6s. 10d. per ton, and my friend was asked to-quote a price for the first job. It was. pointed out. that it was really, this short lead and retail' delivery for which my friend's services were wanted.' The job was new and only a minimum of work was really likely to be available until the winter, when it was hoped that it would be developed sufficiently to warrant the use of the haulier's 2-ton lorry. The bulk haulage was offered merely to keep the vehicle engaged, and my friend had beenfadvised that the prices quoted were those already being paid for coal delivered from wharf to depots by another contractor using a larger vehicle.
"As regards haulage to the two more distant jobs, I remarked, "it doesnl seem to me to need much thinking about. Five shillings and sixpence per ton for a 2-ton load is 1,1s.,4%earn. which you have to run your lorry 24 miles, this being 50. a mile, which is considerably less than it would cost you to operate the vehicle, and if 5s. 6d. per ton be of no interest for a 12-mile lead, 6s. 10d. per ton for 17 miles is absurd."
Well, 1 have been looking into that," he said, and I find there is a-chance of some back-loading with sand and gravel at 7s. per ton. Actually, I deliver it near the coal wharf."
"Where Is this sand from—the other end of the 17-mile or the 12-mile lead?"
"The 17-mile lead."
"So if you happened to have a load of coal for the depot 12 miles away, for which you are paid Ils., you think it worth while to go on another five miles and pick up 2 tons of sand and bring it back for 14s.? "
"That is really what I am asking you about. 1 wondered Whether it would be worth my while or not. You see it is no use trying to get a better rate far the sand. That is, the price it is being carried at now."
"Why not work out the actual cost of your vehicle doing the job and see how much profit or loss there is in it?
"I don't want to reckonon that job alone. I'd be content if I could just cover my costs on that work, provided the coal agent would pay me .a fair rate for the retail delivery, because that is the business that will increase, and that is really what I want to concentrate on. If I start that at a profitable rate, I can later on cutout this other one "Even so, work it out for yourself. It's easy. I'll give you a start. Do you know how much you spend on petrol .and oil?"
" Well, I believe the vehicle is running about 14 m.p.g. on petrol and 1 put in a pint of oil every 200 miles."
"That's a start. Everyone seems to know that much about his vehicle, if he knows nothing else, but although cOst of petrol and oil is important, it is only a part of the total."
"I'm afraid I have not nad the vehicle long enough to be able to find out much more than that."
"We'll make a start with what -you have, anyway. What price do you pay for your petrol? And your oil?
"1 have to pay 2s. lid. for my petrol, retail, and the oil costs me 6s. per gallon."
Well, then," I said, "you must divide 14 into 250. I worked it out and said. "That is I.8—" But here he stopped m.2...
"Would you mind," he said, "if you can, keeping oft those decimals. They are a bit over my head " " Very well,I said, " it will probably be quite accurate enough to call that nd. a mile.
"Now, a gallon of oil," I said, "lasts you 1,600 miles, so that you spend 6s. every 1,600 miles. The nearest fraction I can give you to that is 'I-20d.
'What size tyres have you, and do you know what a set costs?"
"Yes, they are 32-in. by 6-in.." he said, "and they are about £40 a set."
"What mileage do you think you can get out of a set?" "About 24,000." he answered.
"What," I said, "and you running into coal yards and gravel pits! I don't think you will. I think it would be safest to reckon on 20,000 miles," "Well, now, how many pence are there in £40?" He worked it out at the correct 9,600 pence.
"If we call it 10,000," I said, "and you are running 20.000 miles per set, that is just id. a mile.
"Now, what do you reckon you are going to spend on maintenance?"
A Shock for the Tyro
"Now, there," he said, "you have got me. I have not the least idea what it will be. I have been looking at "The Commercial Motor" Tables of Operating Costs. and see there that for a vehicle doing 400 miles a week, which is what I expect to do, you have two items of maintenance— one which is called Maintenance (d) and which is down at 0.30d., and another which you call Maintenance (e), for which you have got 0.77d. Can you go into that for me?" . "1 think the best thing I can do," I said, "is to tell you as a sort of short cut, that you wilt have to spend about Id. a mile on maintenance."
"What! he said. "400d. a week On Maintenance is over 30s. I have read several cases of vehicles being run
thousands of miles and costing only a few • shillings." • "Those are exceptional cases," " Maybe, but there's a lot of difference between a few shillings for several thousand miles and 30s. for every 400 miles."
"It is quite possible." 1 said, "for a vehicle to go a long while without any expenditure required on renewals, yet involve considerable cost on what I cal: maintenance. What do you understand by maintenance."
• "I have always thought it meant just repairs. Isn't that right?"
"As a matter of fact it means a good deal more than just repairs," He said: "I was in the R.A.S.C. during the war, on the maintenance side, and I'm giving the vehicle a ,proper greasing and oiling and that sort of thing all the time."
"1 see," I replied, "and how much do you reckon that Is costing you?"
"Nothing," he said, "if I do it myself."
"Let me set down a brief list of what I call maintenance and repair items, and the figures for what they are going to cost, and then, perhaps, I shall be able to justify that id. per mile or 30s. a week wh:ch strikes you as being so absurd."
Cold, Hard Facts I then drew up the list which is shown in the accompanying Table I, enumerating a series of maintenance operations and the cost that might be expected in connection with the operation of a 2-ton vehicle, the kind in which this haulier was interested.
In the first column of the table the maintenance operation is described In the second is the interval in miles 'between successive occasions on which that particular operation should be performed. In the third column is given the cost of that work, assuming it to he carried out on behalf of the haulier by a regular motor agent or repairer.
For the information to be of practical use, these charges must be reduced to cost per •mile. As, however, to do this for each individual item would in many cases involve inclusion of amounts as little as 1-1,000th part of a penny and because I am concerned only with the total cost of maintenance per mile. I have introduced a fourth column, in which the cost of each operation is reduced to the basis of 1.000 miles of running. The method of doing this is quite simple and easily understood.
Take the first item as an example. Washing and polishing are assumed to be carried out every 400 miles (that is B2 once a week) at a cost of 6s. This would be carried out two-and-a-half times every 1,000 miles, and the cost would be two-and-a-half times 6s., which is 15s., the figure in the fourth column.
Again,' take the renewal of oil in the gearbox and real axle. This operation, including the cost of the lubricant, involves an expenditure of 10s. As, however, it is deemed to be necessary only at the expiry of every 10,000 miles. the cost per 1,000 miles is Is.
Adding up the figures in column 4, I arrived at a totai of 15 55. 11d. That is the cost per 1,000 miles, and it is actually 1,27101. I divided that by 1,000 for my friend and told him that it was, as near as makes no matter, lid.
To my amazement, he was not at all impressed. In the first place, he pointed out that it did not agree with the ld. per mile which was the figure I had already quoted to him.
The Victim Wriggles !
"You said," he objected, " that-this Maintenance (d) and • Maintenance (e) could quite safely he added together and that it would be id. Per mile for maintenance. Now you have drawn .up a schedule of maintenance costs and you tell me it is lid. .a mile.
"And," he said, "I don't propose to turn all my maintenance work to the local garage, because I can do it cheaper, so, in any case, these figures don't apply to me."
"I appreciate all that you say," I said, "and I quite realize that, by doing some of the maintenance work yourself you will be able to cut that lid, per mile considerably I will be able to justify that lid. which I Lave just calculated, as well as that Id. per mile which we have taken from the Tables.
"I suppose you think you do all the maintenance work yourself? " I asked.
"'I do."
"Perhaps it would clear things up a little if you were to go through the list of items and indicate to me those jobs which you do actitally perform."
"It will be a good deal easier if you ask me to point out those I don't do" He picked out five items, namely, refacing brake shoes, fitting new clutch plate, varnishing body, overhauling the engine, chassis and body.
"What about 'sundries'?" I asked.
"Well, I take it that that means just a few odd items and those I can manage, top."
Many a Mickle . . .
"In that you are wrong. It really refers to sundry items of expense which you are apt to forget, such as the purchase of sparking plugs, a gasket, a length of high-tension cable, etc. They are small things in themselves, but amount to a lot in a year."
"Even so," he said, "I'd like to know what your new figure is for maintenance if you nekon I do all those things which are down on your schedule except the five items that I have Mentioned. You can, add your 'sundries' in, too, if you feel you must."
"Very well, then, we'll take the figures per 1,000 miles. For refacing brake shoes, 6s.; fitting new clutch facing or plate, 2s.; varnishing body, 8s.; overhauling engine, £1 10s.; chassis and body overhaul, 15s4' sundries, 10s. The total is £3 I is. per 1,000 miles."
I carefully reduced this to pence for him, and by so doing arrived at a total of 852d., which is .852d. per mile, which I translated into a fraetion of nearly id.
" Now," I said, "what arc you going to do? It is going to cost you Id. per mile to do those things which you say you can't do yourself, yet you say the cost of maintenance is nothing."
"Well, ies a.good deal more than I would have thought possible." he said. S.T.R.