Get wised up oft the going rate
Page 59
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NEXT WEEK CM publishes its 1979/80 Tables of Operating' Costs. Orders should be placed now for this indispensable publication. This year's edition, Nhich includes a specially deveoped rate/utilisation chart for .iach vehicle, costs £1.75 post aid,
it It is clearly indicated in the lew rates that operating costs lave risen by about 20 per cent luring the past 12 months and Nill continue to spiral upwards. Nithout price or wage rearaints, the elements which go o rrake up the tables will be )ffected by market forces. %IreEldy fuel prices, are creeping ip Owards £1.50 per gallon. NIthough this figure is not likely o be reached during the cur rency of these tables it is possible some garages in remote areas could come close to charging that price.
The new wage round has already started and early reports indicate claims of £2.50 per hour for drivers, with 50 per cent improvements in fringe benefits. Unemployment is sure to reduce the pressure trade unions can use to support pay claims but a further increase of not less than 10 per cent on wages should be anticipated on January 1, 1980.
Vehicle first costs are expected to rise by 150 per cent over the next five years and the Tables reflect this in the depreciation allowance. There are indications that the leasing and contract-hire market will find increasing favour during 1979/80 and thereafter and the Tables and rate card show appropriate interest charges to cover the cost of leasing or purchasing.
This year's Tables have been compiled in association with Mercedes-Benz (GB) Ltd Management Consultancy Services and as a result we have been able to introduce a utilisation rate chart for each class of vehicle. The rate chart recognises that operators do not always achieve 1 00 per cent utilisation and that terminal delays can reduce running time drastically.
We are therefore showing the rate per ton in each weight
category for 100-11000 miles per week for one to five journeys per day and load to 50 or 75 per cent. The chart makes instant accurate quoting a simple operation.
Passenger operators will now be able to quote a rate per passenger-mile for both buses and coaches. Bus rates have been calculated for one and two shifts.
Fleet or privately owned cars are an expense which must be more carefully watched than most. The Tables show how rates are compiled for four classes of saloons.
This year we have dropped the cost of a chauffeur. This is too much of a variable since it is impossible to include the fringe benefits that this type of employee might enjoy. The rate in every case includes fuel.
We have also dropped the electric vehicle costs. Costs in this area have changed little since last year and the operator market is firmly established, consequently the demand for this service is minimal. It will be treated as a separate subject in CM later in the year.
Our cost Tables are used widely by insurance companies to settle loss-of-use claims. This is a clear indication of the accuracy of the calculations. Nevertheless operators have said that they cannot obtain the rates we quote. We believe that by using our rates, operators will get a proper return on capital and make a sensible profit. r
The Tables can be produced to customers as independent evidence of a rate structure. They will stand the closest examination and serve as irrefutable evidence of the operator's costs.
The evidence of the Tables is that it costs almost £300 per week to operate a five-ton rigid covering 500 miles. A 28-ton eight-wheeler costs nearer £500 for the same time and mileage while a 32-ton artic outfit is Costing £550. CM's cost Tables show how these figures are arrived at and how much must be added to show an acceptable profit.
The rate chart shows how the charge is achieved in unit rates.
The Table of Operating Costs should be ordered from IPC Business Press Ltd, Book and Sundry Sales Department, 40 Bowling Green Lane, London EC1 ONE at £1.75 post paid or from the retail sales counter at Paris. Gardens, Stamford Street, London SE1 9LU, at £1.50 for personal callers.