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Back demands with facts

26th September 1975
Page 47
Page 53
Page 47, 26th September 1975 — Back demands with facts
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Which of the following most accurately describes the problem?

The paper on management control and costing by Mr H. Berry, executive director, United Transport Overseas Ltd, drew several questions on vehicle replacement costing.

Mr D. R. Bolton, P&O Steam Navigation Co Ltd, was concerned about the problem of relating the increasingly higher cost of vehicles to a standard for optimum vehicle replacement. How could this be catered for ?

Mr Berry suggested that the secret lay—as mentioned in his paper—in increased utilisation. A 5 or 10 per cent improvement in this factor could defray the additional cost of capital equipment even in these inflationary days.

Mr S. F. Gregory (Transfleet Services Ltd) pointed out that reducing the book period of vehicle life, yet operating units for several depreciation-free years before disposing of them, might show increased profit for those years but would not at least 52 per cent of the benefit be taken in tax.

It would, said Mr Berry, but the vehicle depreciation figure should be based on the anticipated vehicle replacement price, not first cost; this would allow for such an eventuality.

Mr R. Cropper, Conquers Transport Ltd, remarking that training of managers was to be made a compulsory matter under the TML proposals, said he favoured more voluntary education in the industry and wondered whether Mr Berry thought this should include an element of accounting.

Mr Berry said he would welcome any move to improve the quality of transport managers.

Mr J. A. C. Ward, Creda Electric Ltd, raised the problem of operators seeking rates increases and applying for them with some degree of unison.

Mr Berry agreed that there was a need for operators to do this but pointed out t customers were becoming m receptive to a reasoned reqL for higher rates backed properly presented facts. C ference chairman Sir 1 Pettit agreed, and said it r becoming increasingly imr tant to measure the act work content of services I vided for customers, so t changes in cost factors—s as weight, bulk or packag could be monitored.

An extension to this was question from Mr K. Fish Kime and Son Ltd. If the Pr Commission agreed that n could be raised what was means of ensuring that c petitors adjusted rates acci ingly?

He was told that relia would have to be placed on change-of-costs basis to the necessity of improving maintaining profit margins.

Mr R. W. Eggleston, ( Motor Transport Division, pressed doubts about the f ibility of 95 per cent veh utilisation. Would this not quire an exceptionally t organisation?

Mr Berry said that the m ods used to obtain a high t sation varied in United Tr port according to the cou concerned. As a supplier of components to British Leyland, Mr M. V. Roberts, of Doncaster Sheffield Ltd, felt aggrieved that he had to wait 18 months for the delivery of new Leylands and an unacceptably long time for spares.

The Ryder report, Mr Ellis hoped, would result in considerably increased investment, which should greatly improve production facilities. Some of the machinery his company was being forced to use was as much as 40 years old. For the immediate future (and 1976 demand would be the lowest for over 10 years). output should be sufficient.

The wear and tear of vehicles continually used on motorways was the concern of Mr D. L. Lace, ICI. Were there any statistics available?

Certain components were adversely affected, Mr Ellis replied and as an example he cited the case of an overdrive gearbox the bearings of which were wearing out during constant motorway use, where previously there had never been any such problem. The difficulty was, however, that it was still the exception in this country for vehicles to be continually on motorway operation.

In reply to a question from Mr R. P. Kempson, Eaton Ltd, on future design trends Mr Ellis thought that there would be definite influence from legislation—noise in particular. The importance of improving fuel consumption would see, he thought, the wider use of road speed governors—which had been shown to greatly improve motorway consumption. Putting the ball back in the court of Mr Kempson, Mr Ellis thought that while the noise reduction programme on engines had been progressing well, gearbox noise might be very difficult to reduce while still using existing production techniques.

Building to the needs of European specifications rather than those of the UK was causing the unladen weight of vehicles to increase. Was this really necessary ? asked Mr. H. J. F. Strange, Arthur Guinness Son & Co (Park Royal) Ltd. The problem, said Mr Ellis, was that modifications had had to be made to existing vehicles, causing an inevitable increase in weight. With more money available, however, vehicles del signed from scratch should solve this particular problem. The Marathon was a good example of this, being one of the lightest vehicles in its class.


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