1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164 
New edition of the cost tables now ready
Page 122
If you've noticed an error in this article please click here to report it so we can fix it.
THE publication this week of the 51st edition of the COMMERCIAL MOTOR Tables of Operating Costs comes at a time when all aspects of trade and industry have been made more cost conscious by continuing national financial stringencies. This has included distribution and road transport in particular, following the recommendation of the National Board for Prices and Incomes that there should be greater accountability in the industry. By publishing Tables of Operating Costs since 1911 COMMERCIAL MOTOR has made a significant contribution in this field and continues to do so with the publication of this new edition. It is obtainable from George Newnes Ltd., Tower House, Southampton Street, London, WC2 price 7s. postage paid, or through any bookseller, price 6s.
Apart from financial and economic trends on a national level, this is a period of great change in the road transport industry itself. In the operation of goods vehicles, whether by the trader or professional haulier, new Construction and Use Regulations are permitting the operation of larger vehicles where these are specifically designed for the purpose and accordingly meet the statutory requirements. But at the other end of the scale plating of vehicles will prohibit much of the overloading of vehicles which has previously occurred.
But to make a worthwhile reappraisal to find the most economic size of vehicle to operate, it is essential that the operator should have not only a basic knowledge of the principles of costing but also an up to date source of current costs. Just such a role is filled by this new edition of the Tables. Where no previous cost records are available, an operator can make use of the data given in the Tables until such time as he has accumulated corresponding information based on actual operating experience peculiar to his own vehicles and type of work. Alternatively, where an established operator has accumulated adequate costing records relating to his own type of operation he can compare both the level of cost and the trends in his own record with those shown in the Tables, to advantage.
There is a special need for comparisons of this nature in road transport because it is a service industry. The level of service provided—as for example in the number of deliveries made per week, or the attention given to urgent orders, to the extent of making a special delivery—may well be a decision made as a result of company or sales policy. But the effect of such decisions can substantially increase or decrease transport and distribution costs. This, however, may not be revealed if all costs of this nature are examined only on the basis of internal trends within the company concerned. Indeed, this is one of the advantages of the increasing grouping of companies, which facilitates cost comparisons of this nature. But, because of the obvious competitive element, the small haulier or passenger vehicle operator may well not have the opportunity of finding out the operating cost of similar operators and, here again, the availability of the Tables can prove invaluable.
To maximize the benefit of comparison of operating costs, however, it is essential that having initiated such a costing exercise the authority and determination is available to put into effect any changes which are obviously necessary as results of shortcomings revealed by cost comparisons.
In this new 51st edition, allowance has been made both for changes which have occurred in the several items which go to make up the total operating cost of the vehicle and in the average vehicle availability for service. In recent months there have been probably greater scrutiny and change in both the level of wages paid to transport workers and, moreover, in the procedure by which such amounts are calculated. To meet this situation an ancillary table has been included, of additional wage payments ranging from 5s. to £.5 graduating in steps of 5s. and shown as an extra cost per mile according to whether the weekly mileage was 600, 800, 1,000 or 1,200. Thus resulting cost in terms of pence per mile can then be added to the total operating cost per mile shown in the Tables so as to adjust that total to the need of particular types of operation. Those not familiar with the basis on which the Tables are compiled may find the following brief description helpful. To fulfil an economic purpose, a commercial vehicle must complete the sequence of loading, proceeding and unloading. This in turn implies that throughout its working life a commercial vehicle will, for part of the time, be stationary and at other times be on the move. This is reflected in the basic division of operating costs as between standing costs and running costs. Standing costs arise immediately a vehicle is acquired and put on the road and they continue to have to be met throughout the period it is in the operator's possession—regardless of whether the vehicle is in use or not and whether it is mobile or not. Standing costs are made up of five items: Licences, wages, rent and rates, insurance, and interest. Because they do not vary with mileage run, they are calculated on a time basis, But to make provision for an equivalent total of four weeks a Year when the vehicle is not available for service, the annual expenditure in respect of each of the five items just named is divided into 48 instead of 52 to give the weekly total shown in the extracted Table I give here.
Running costs are incurred only when the vehicle is operated, and vary directly in relation to mileage run—with limited exceptions. These costs also are made up of five items: fuel, lubricants, tyres, maintenance, and depreciation. The addition of standing costs and running costs gives the total operating cost, which is of use to both ancillary users such as traders with their own vehicles and professional goods and passenger operators. These latter, however, will also need to calculate charges including establishment costs and profit margins and these are also included in the Tables.