Sand and Ballast Rates When Conditions are Difficult
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Solving the Problems of the Carrier TLIE figures shown in Table IV, which is reproduced from my article in last week's issue, are, as to the second and third columns, built up from information supplied by " A.C.I.S." in a letter in which he set out the cost of operating vehicles of a sand and ballast haulage fleet, assessed as percentages of the earnings. The figures relative to the earnings per vehicle per week, given as £23 12s., and which are taken as 100 per cent., and the first column of figures-the cost of operation assessed as a percentage of £.23 12s.-were given me by " A.C.I.S." From these I compiled the figures set out in the second column and these go to show that the total cost per vehicle per week is £26 I3s., representing a loss per week of £3-1s.
Nevertheless, after artalysing the figures, it 'did appear, as we set out in the previous article, that, at the rate per yard quoted-5s. 6d. for 'a lead of eight miles-and making an average of 5i journeys per day, there ought to be a profit. In casting around for some explanation of this difference between the calculated revenue and the actual,. I came to the conclusion that, in assessing these percentage costs, I had not made provision fer the fact that, out of a fleet of 45 vehicles, there were only, 'on an average, 28 in actual service, the other 17 being off the road, as " A.C,I,S." puts it, "for major repairs."•
As the figures quoted are actual, the statement that 17 vehicles out of 45 off the road is a usual experience must be accepted as fact, and there is, therefore, no point in again raising the question as to why this abnormal proportion of vehicles gives trouble. What I am concerned with at the moment is in discoiiering what rate ought to be charged, when operating under conditions which bring about this abnormal proportion of breakdowns, in order -to show profit.
The simple way -to arrive at a conclusion is to obtain an average figure for mileage per week for each of the 45 .vehicles. The figure of 530 miles per week, given in Table
IV, is calculated on the assumption that a vehicle does 51 journeys per 84-hour day throughout the week. Actually, of course, this is not so. The total mileage is 28 times 530, as there are 28 vehicles at work all the time, and the average mileage of each is 530. The net mileage per vehicle, however, is that total divided by 45, Which is 330 miles per Week.
I have, therefore, revised the figures in accordance with this new assessment of the weekly mileage, and the results of the calculation are set out in Table V. The total cost per week, for each item, is the same as in Table IV, but the cost per mile is considerably increased. It is now of interest to compare these new figures with those in " The Commercial Motor " Tables of Operating Costs, so far as that is practicable.
Referring to Table II in those Tables, the cost per mile
for petrol, • for a 5-tonner covering 500 miles per week, is given as 2.31d., and that of lubricants as 0.16d. The total is 2.470., which compares with the figure of 3.89d. given in Table V accompanying this article. Depreciation, now given_ as 2.32d., compares most unfavotirably with the figure of 1.22d. per mile in " The Commercial Motor " Tables. For repairs, -under which item is incladed the cost of tyres, the figures in " The Commercial Motor" Tables amount to 2.33d. per mile, as against the enormous one of 5.39d.
The foregoing are the only items concerning which direct
comparison can be made, but there is another way in which we can check these costs by -the side of the average figures which are set out in the Tables. Adcting the runnina° costs -petrol and oil at 3.89d., tyres and maintenance at5.33d. and depreciation at 2.32d.-we get a total of 11.54d. per mile for running costs only. That compares with " The Commercial Motor " Tables' figure of 5.82d. per mile, so that the cost is nearly double what it should be.
The standing charges are unaltered, and are as set out in the previous article. Wages, and tax and insurance, amount to £8 7s. 2d., to which I add 12s. 10d. for interest and garage rent, of which there is no mention in the figures given to me. The total amounts to £9 per week as compared with £6 6s. per week as shown in the Tables. The overheads are stated to be £2 8s. 40. per week, so that the total of fixed costs is £11 Ss_ 40. If I add 20 per cent. to that for profit-another £2 5s.-8d.-then I get £13 145. as the total of fixed charges. That is equivalent to Ss. 8d. per hour.
If the running costs total 11.540. per mile then the charge, -to show a reasonable profit on work of this kind, must be at least Is. 2d. per mile. We now have data on which to calculate what the rate per yard should be. The
• average number of journeys per 84-hour day is 54, which involves 88 miles of running. The yardage carried per day is .thus, on an average, 22. Izor 84 hours, at 5s. 8d. per hour, the charge must be £2 8s. 2d., and for 88 miles, at Is. 20. per mile, £5 2s. 8d. The total charge per day must, therefore, be £7 10s, 100., which is equivalent to 6s. 10id. per yard. Presumably, the weekly earnings per vehicle would,. at this new price; be increased in proportion as 5s.. 60. per yard is to 6s. 101d. per yard. Instead of being £23 12s. per week they would be £34 15.s. 40. per week, showing a net profit, over the cost of £26 13s. per week, of ES 2s, 4d, 'That may or may not be a little high, and it is of interest, therefore, to take a middle figure of, say, 6s. 60. per yard. In that case the revenue would be £30 13s. approximately, .which would leave only £4 per week profit. Some intermediate figure, probably 6s. 9d. per yard, would best meet the circumstances of the case.
It ought to be stated that the figures in Table V for cost per mile are, to a certain extent; hypothetical: their accuracy is determined by the degree to which I have correctly interpreted A.C.I.S..'s original figures. . It may be that, when he reads' this article, he will be inclined to be critical and may write a third letter to the Editor which will not be so generous to me as his former ones, However, I have, by the foregoing process, approached somewhat nearer to the solution of the difficult problem of finding some sort of a formula to apply to abnormal conditions of working as those just described, so to be able suitably to correct the standard rates for sand and ballast haulage as set out in Table III, in theissue of " The Commercial Motor," dated January 7.
It may be recalled that, in his original letter, A.C.I.S. expressed the view that sand and ballast haulage rates cannot be compiled from any set of standard costs per mile without danger to the haulier. To a certain extent I think they can, provided the standard costs be appropriately applied, and I am trying to find out how this can be done in difficult and particular cases such as this.
What MustBe Known to Decide Rates
• A.C.I.S. said that, in order to decide what ballast rates will be, the following investigations should be made: 1. Study conditions at the pit, particularly the roads in and out.
2. Decide what wait there would be at the pit:—
(a) Are there enough loading facilities?
(b) Are the loading or digging machines in good condition so that there will be no delay through breakdowns?
3. Decide what delays are likely to occur at the discharging end.
4. Find out if the ballast is to be dry or wet.
5. Estimate the percentage of the fleet likely to be under repair due to bad roads, etc.
6. Calculate number of trips that can be made with running lorries and the .pay-load they will carry. If, as a preliminary, Conditions 1, 2 and 3 be considered, and the others left until later, the problem, for a start, is simplified. It is the conditions set out in 1, 2 and 3 which, in the main, and in the absence of further complications, determine the number of journeys likely to be made per day and, given that, it is easy to correct a standard
schedule accordingly.
For example, mention has been made more than once already of 51 complete journeys per 81-hour day, carrying 4 yds. of material. Now, in compiling the figures in Table III, a standard period of 40 minutes for terminal delays was assumed, and an average travelling speed of 25 m.p.h. The time per round journey, on the basis of 51 journeys in 81 hours, is 93 minutes. Out of that we must take the time needed to travel 16 miles at 25 in.p.h., that is 39 minutes. The average terminal time is thus seen to be 54 minutes, instead of 40,
The rate per hour, on which Table III was based, was 5s. 6d. If 54 minutes is to be allowed for terminal delays the terminal charge must be Is, 3d., instead of lid. This means that 4d. per yard must be added to the final rate all the way down the fifth column, " rate per yard," in Table III, and, given that 51 trips per day can be maintained as a fair average, such an addition to the basic price will meet the circumstances.
Difficulty of Estimating in Advance The trouble is, of course, that the haulier is often called upon to make these estimates in advance, and however wide his experience may be, he is bound to find a difficulty in determining the frequency with which any mechanical loading devices are likely to break down. To-day, owing to shortage of labour, materials, spare parts and so on, which affect the mechanical-loader position just as much as that of the vehicle, the probabilities are that breakdowns will occur with steadily increasing frequency. In cases where the loading is carried out by a mechanical shovel, the breakdown of that machine may add half an hour, and possibly more, to the time needed to make one round .
journey. That is as much as 3s. per trip, or 9d. per yard. The only way, it seems to me, in which difficulty Of that sort can be surmounted is by quoting two prices, one, the
standard rate as I have amended it, to apply -when the mechanical loading device is in operation, and another, 9d. per yard, more when it is out of operation: I can see no other satisfactory way of dealing with such a situation To quote on the basis of the digger being, more or less, regularly available, will involve the haulier in a loss if it
.be frequently out of action: if, on the other hand, the haulier makes what is probably reasonable provision against the contingency that it will be out of action, his price will seem to be too high to the ballast merchant, A dual quotation seems to be the only logical solution.
(To be continued.) S.T.R.