More about utilisation
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Keeping an eye on vehicle utilisation is important, but increasing utilisation can save costs. In gaining room for manoeuvre in rates negotiation and controlling existing costs, efforts to work vehicles harder will be rewarding.
by Johnny Johnson
LAST WEEK I talked about utilisation and how it was necessary to keep a close watch on this factor to ensure that an adverse trend did not affect rates quotation's so that there was -a danger of not covering cots. This week let's consider the wider implications of utilisation: how costs can be reduced or, .at worst, contained by making vehicles work harder.
There is no doubt that continuing inflation has compelled operators 'into a regular approach to customers for rates is too regular in many cases. Unless one is prepared to consider working economies 'in one's own organisation, there seems to be no alternative Ito a constant reappraisal of cost factors as prices rise and a resulting demand for higher rates from transport users.
Many operators who are good -businessmen will be well aware of this. Strangely, they seem to ignore or be unaware of the cost savings which can be achieved by better utilisation.
The simple fact is that by carrying more traffic with the same number of vehil either by finding return 14 or double -shifting and ma the vehicles work more h in a day, standing costs be spread more thinly giving cheaper rates or r room for rates negotiatio Moreover, when it can demonstrated to a. custc that every effort has 1 made to control the rates b offered, there is more ch; that the customer will ac rates quoted or agree to in:crease of existing rates In seeking ,back-iloads might appear that an oper from some distance a would be proposing to ext traffic which should be the lihood of the local open However, providing that -s( ble rates are charged certainly -little if anyt below the outward rate, is normal competitive c mereial 'practice.
Reducing the rate chal for back-loads to a bare n mum is to be deplored. T is obviously isomething in argument that any final' reward at all for back-load acceptable for [the MI eo mic rate has already 1 charged on the outward However, this is a fallacy cause the operator from I dersfie/d who finds that traffic is being taken OW this way is quite able to re the compliment to the hat from Hove who is extractin Taking this beggar neighbour 'attitude -to its log conclusion means that neil will have any -traffic from own ha-se and will everitu run empty to each otl: town to pick up traffic for own area. In the meantime, customers Will have enjc 'artificially cheap transport the hauliers both go broke Competition, provided ir on a fair land reasonable hi including -charging the eo mic rate both ways, is g for -the industry and env ages the inefficient operato greater efforts.
The result should be the operator will gain n to manoeuvre in rates neg ation and perhaps give him a chance to maintain exis rates at a more accept level.
The most rewarding e of all is -to extend the/ orl day -of the vehicles so e traffic is carried on the e fleet. Here it is possible demonstrate precisely the A. of working the vehicles tours a day instead of, say, an a one-shift system. sing the example of a 20six-wheel rigid as in the Ae on August 22, it can be from the extract from Cost Tables again reprofor a single-shift the Standing cost per week • epresented as £94.07. ividing this by a hypothal 1,000 miles a week operI, gives a Standing cost per of 9.4p which added to 15.21p a mile running cost rs a total operating east mile of 24.61p.
n a double-shift system, it be necessary to make pro)n for the wages of the and driver. So, adding a her wages appropriation '.77) to the one-shift kly standing cost brings up to £141.84, which ded by the enhanced kly mileage of 2,000 res in a Standing cost per of 7.09p. This, added to running cost per mile of lp gives a reduced total gating cost per mile of OP.
saving of 2.3Ip a mile 7 a weekly mileage of 2,000 s a weekly economy of 20.
:ultiply this by the number ehicles 'in the fleet and the Ating saving becomes very worth while.
he greater the weekly ding cost the more signifi: is the saving in this ction.
!n bigger benefit
further example might be 32-ton articulated vehicle box body trailer as tierceed in CM Cost Table 5. ere, the weekly standing on a single-shift vehicle ) average of £138.71 which, led by the hypothetical .ating Mileage per week of 0, gives a Standing cost per of 13.87p. Added to the ting cost per mile figure 24.53p, a total operating per mile of 38.40p is rojecting this for the double t and adding the extra er's wages of £51.07 a k to the weekly standing gives a new total of /.78. Dividing this by 2,000, new weekly mileage on a double shift, gives a standing cost per mile of 9.48p. Adding the running cost per mile of 24.53p results in a reduced total operating cost of 34.01p a mile.
The saving here, then, is 4.39p a mile or, multiplying by 'the weekly mileage of 2,000, £87.80 a week. A not inconsiderable sum. .
It Could be argued, of course, that doubling the weekly mileage will inevitably incur a penalty for additional maintenance. This might very well be so, but this would be difficult to estimate and cnly experience. would demonstrate the extent of this further cost penalty.
Lt is suggested, however, that vehicles which are properly maintained in a reasonable maintenance facility should not need much more spent on keeping them in good condition no matter how their weekly mileage is increased.