Your guide to costing and rates in 1981/82
Page 47
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CM 1981/82 Tables of Operating Costs cover all classes of goods and passenger vehicles including saloons in four engine capacity categories. They show in detail the breakdown of standing charges on a weekly and hourly basis; running costs per mile and operating costs per mile and per week.
They also show the minimum charge which must be made to cover overheads and show a modest profit. This is shown on a mileage and weekly basis.
The figures are supported by base information supplied by vehicle, tyre and fuel companies. They are also based on information supplied by operators, finance houses, local authorities and Government sources.
To add to their value, the Tables are not finalised until the passage of the Finance Bill, which follows the Budget debate, is assured.
Successful rate quoting is a science developed by large companies with substantial resources. For most operators it has been less than even educated guesswork.
We have taken the guesswork out of this important aspect of business. Each table has an 3ccompanying rate card.
These rate cards show the operating cost and minimum ;harge per ton for each category of vehicle covering between 100 Ind 500 miles per day and five ourneys per day. They can be ised as rate cards or a guide to ates.
Adjustments may be made to orrespond with an operator's nown cost for a particular item say rent and rates — but this ; a practice we do not
3commend.
The Tables can be used by 0th operator and customer. Iperators are able to present ;eft customers with an 'dependent rate source built om irrefutable evidence. They will be able to show itegorically that their profit largin does not exceed 20 per Int.
Customers who feel they are )ing overcharged will find the /bies useful to argue their case. Probably more important than her of these aspects is the rbles' use in compiling a ntract rate since they take account of anticipated increases between now and June 1982.
Over the years, CM'S Tables of Operating Costs have been widely used by insurance companies in pursuit of loss of use claims. More recently they have been used by 0-licence applicants to demonstrate to the Licensing Authority that they have a sound knowledge of what each item of operating costs amounts. to.
Operators with car fleets will find the Tables invaluable when deciding whether to adopt new methods of car fleet acquisition.
In compiling the Tables, we have based the calculations on a 45-week year to take account of holidays and servicing schedules. The weekly hours have been calculated on a 40hour week. Standing charges fall into five categories. The excise licence is that applicable following the latest Budget. Wages take account of the most recent increases and represent the national average.
Rent and rates is the one area where there could be a significant variation between the Tables and the actual, owing to the difference in rateable values of property nationwide.
However, even a £2,000 difference in the total rates would mean less than one pence per mile in operating costs. . Insurance charges are also based on the national average, and may vary slightly by zones. The difference between zones is not significant in the mileage or hourly rate.
Interest charges on capital borrowed or employed are calculated on current bank interest charges.
All of these charges are constant and will be incurred even when the vehicle is not moving. Therefore the greater the miteage, the lower the standing charge per mile.
The second element in the total operating cost is running cost. These are charges incurred only when the engine is running and the vehicle is moving. They are lubricants, fuel, maintenance, tyres and depreciation.
The cost per mile is calculated by dividing the sum of these costs by the mileage run. The operating cost can calculated on time or mile Weekly cost is found by multiplying the running cos mile by the miles run and ad this to the weekly standing To find the cost per hour total is divided by hours war The mileage rate is arrivE by dividing the standing ch by the miles run and addinc answer to the running cost mile.
However, operators need become involved with thes detailed calculations. In association with Mercedes-E (UK) Ltd transport consulta department, we have prock 3,000 calculations which ar published in the Tables.
In addition, we have pro& a fuel consumption cost calculator which covers a ra of costs per gallon and vary consumption figures. The Tel also include a directory to many organisations connec. with road transport.