A HAULIER of some 20 years' experience told me that he was recommended to tender for work for his
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local county council. He did so and to his surprise his tender had been accepted. He did not then know that the acceptance of the tender did not mean that he would get any work, in fact, he did not carry any traffic for the authority, either at his price or at any other.
That story may or may not be an exaggeration, but this at least is true, that an acceptance by a local authority of a "Tender for the Supply of Team Labour," does not mean . that the operator concerned can expect to have his vehicle fully employed on that contract for a year. Sometinies he will get work to keep his vehicle engaged for a full week or even for several weeks.
More usually, however, the work is casual, and the vehicle may he wanted sometimes for a few loads, compatible with the wording of the contract, to empty half a dozen railway wagons and to deliver the contents to various roadside dumps. And even then he will find that he has to share the work with several of his fellow hauliers whose contracts also have been similarly accepted. It is that
condition which has convinced me how.
rarely a county council contract can reasonably be made the subject of an
application f o r 4 contract A .licence.
Of cours.e, it. cuts both .w a y s.. The haulier, presumably, .is at liberty, whenever he is called upon to do work of this nature under the terms of the contract,
to state that it is inconvenient should his vehicles be otherwise engaged. At the same time, the small haulier is often afraid to take such a stand, and in consequence is just asliable to lose money as he is to gain it.
Moreover,it is difficult to tender with any degree of accuracy, which thus complicates what is in itself a problem already sufficiently abstruse.
The specimen form:of-tender here reproduced suggests in itself the probability that the work will be casual and, at the same time, it indicates the existence of the problem I have just mentioned, that of assessing rates for a variety of low-mileage leads. , As regards the first point, the sub-title of the contract states that the haulier undertakes to load road material, etc., "in such quantities and at such times as may be necessary, and in accordance with the instructions of the surveyor...." The majority of operators, when tendering, does so either from past experience—a good guide—or follows the tine of least resistance by inquiring what the rate has been in previous years and quoting accordingly. It may be that they will undercut that rate so as to make sure of getting the work. So far as the newcomer is concerned and, unfortunately. there are likely to be many such in the near future, he is meat likely to adopt the last-named course, which simply means that he will inaugurate a new cycle of rate-cutting in this particular line of traffic.
A CONTRACT
No Indication of Journey Length
The main trouble is that there is no indication on the form as to the proportion of long and short journeys of which the work will consist: nor is there even any possible way of ascertaining that proportion. Obviously, that factor must make some difference to the possibilities of making the job profitable, so that even a most careful calculation of the prices, in accordance with the various lengths of journey, will not entirely suffice.
As an example of the difference which arises, let me take two extreme cases. First of all, assume that the whole of one week is spent in hauling material for the shortest distance named, that is half a mile. Whilst this is most unlikely to happen, consideration of it will help to illustrate how the operator should think abbut the job. The time necessary for a complete journey, assuming the use of a 5-ton lorry, will be 1'1 hours, so that five journeys per day should be possible assuming 81-9 hours per day. That means a total of 24 journeys per 44-hour week.
On the other hand, and again assuming the unlikely, let me take it that the week's work consists of hauling road materials from the railway station to the farthest point named in the contract, involving an out-and-home journey of 24 miles. We can then take it that each journey will occupy 21 hours, which means three journeys per day OE 15 per week.
According to "The Commercial Motor" Tables of Operating Costs the standing charges involved in the operation of a 5-tonner amount to £7 6s. 6d. per week. A reasonable and average assessment of establishment costs is £2 13s. 6d. per week, so that the total of fixed charges per week is £10. The running costs per mile. taking an average and even figure, amount to 6d.
Taking first the half-mile lead, in one week the vehicle makes 24 journeys so that the weekly mileage is 24, and at 6d. per mile comes to 12s. Add the fixed charges of £10 and we get a total of £10 12s. In 24 journeys, carrying 5 tons per journey, the tonnage is.120, so that the cost, not the rate, is Is. 9d. per ton calculated to the nearest penny.
In the case of the 12-mile lead when 15 journeys are run per week, the total
mileage 360 which at 6d. per mile is £9, so that the total cost per week is £19. The tonnage conveyed totals 75 so that the cost per ton is 5s. Id.
In considering the rate to be charged, allowance must be made for the fact that the work is casual. The operator for that reason is entitled to add 30 per cent, profit on to his costs. The rates for the foregoing examples must therefore be 2s. 3d. per ton for the half-mile lead and 6s. 8d. per ton for the 12-mile lead,
Figures for Hand Loading
I would mentioa at this point that it is not possible to compare the rates which I am producing in this article with those published a short time ago by the Road Haulage Association because that body referred to 'material which is "mechanically loaded," and I am dealing, with material which has to be shovelled from railway wagons into the operator's vehicles.
In any event, the figures which I have just given are approximate only: they are put forward just to point the argument on the differences in prices. They take no note of the fact that there is sometimes delay in obtaining loads at the station, and again when endeavouring to get into position for tipping the material at the delivery end.
Above all, there is no allowance in these figures for conditions under which the haulier may be expected to do a couple of short hauls then a long one, then one of medium length; such variables are sufficient to upset any too closely calculated assessment of costs.
In dealing with this matter on behalf of country hauliers, I must not overlook the fact, that, whilst the Tables are probably sufficiently accurate for ordinary purposes, they are, nevertheless, average figures. In endeavouring to give the country haulier an accurate basis for estimating his charges. I shall base my own calculations on figures more particularly adapted to his peculiar conditions. On the whole, I think I shall be able to show that his charges can be somewhat less than those enumerated in the Tables, and yet yield him a reasonable profit on the work.
The figures in the Tables with which I propose to make corQparisons, are those of the 5-ton petrol-engined vehicle as given in Table II. I must take into consideration the fact that the lorry is, in all probability, of considerable age, and is, therefore, liable to use a little more petrol and a little more oil per mile than would one in better condition.
I shall, in fact, find that its running costs are somewhat higher than average. It is in the standing charges and establishment costs that the country haulier is able to economize.
The average petrol consumption of the modern 5-ton lorry is one gallon per 11 miles. In the case of the kind of vehicle usually in use in the countryside, 1 think 94 will be nearer actuality, the difference being due not only to the faulty condition of the lorry, but also to the nature of the work, involving short journeys and a considerable amount of mantruvring at each end of the trip.
The oil consumption will, from the same causes, most certainly be greater than that quoted in the Tables. The figures for petrol and oil will, in fact, be 2.42d. and 0.02d. per mile instead of 2.10d. and 0.16d. per mile.
The cost of tyres on a vehicle regularly employed on road-repair work is invariably above average because the going is bad, and it is often necessary to run the lorry on to the sharp-edged material as used for road foundations. Therefore, whereas the average as given in the Tables is 0.80d. per mile, I think a reasonable figure in these circumstances will be 0.95d.
The cost of maintenance of the vehicle will depend on circumstances. 1 am aware that an owner-driver who is really a good mechanic can keep down his maintenance costs. On the other hand, even the competent engineer is apt to forget that the time he spends on repairing his lorry could be expended more profitably by carrying a load with it.
It is, nevertheless, a fact that many owners carry out B12.
overhauls in which the driver and the owner make themselves responsIble for the labour costs. At the same time, it often happens that the mileage between one breakdown and the next is small. Sometimes it is woefully small, and I am, therefore, going to leave the figure for maintenance "e" at 1.23d. in the Tables. Maintenance "d," which refers to such work as washing and polishing, greasing and oiling, will be done in country areas by the owner or the driver, and can therefore be eliminated.
Depreciation, too, must remain as given in the Tables. A used vehicle may be bought for £400 and may give its owner 100,000 miles of running. In that case depreciation would figure at Id. per mile. Another machine, for which £600 is paid, may not be fit for further use at 60,000 miles, in which case the depreciation would be equivalent to 2.4d. per mile.
In view of that uncertainty, therefore, I propose to take 1.60d. per mile as given in the Tables. The total of running costs of this 5-ton lorry amounts to 6.40d. It will be sufficiently accurate for the calculations we have in mind to call that 61c1.
Country Hauliers' Costs
This, as I have already suggested would be the case, is a little more than average. A country haulier can, however. usually effect considerable economies on the standing charges which I will now consider.
The first item is not subject to diminution. The licence is still at the rate of 12s. per week. It is in the other items that savings are made, as, for example, wages, which with the usual allowances for insurances and holidays-with-pay will amount to £5 7s. instead of £5 12s.
Rent and rates can be taken at 5s. instead of 9s.; insurance—as a general rule third-party insurance is all that 'is considered—should cost not more than another 6s. per week. Interest on first cost depends upon how Much has been paid for the vehicle, and 6s. per week is the figure 1 am going to assume. The total of all these items is £6 16s. per week. The establishment charges may not he ignored even by a haulier in this position, although undoubtedly the amount spent on this item will be considerably less than in the case of the operator whose headquarters are centred in a town. I think a minimum allowance of £1 4s. per week can be taken as sufficient. The total of fixed charges, i.e., standing charges plus establishment costs, is £8 per week. Applying these figures to the times and the journeys already discussed, we first of all have the half-mile lead, in regard to' which it was agreed that 24 journeys per week could be covered. According to these new figures, the cost is £8 per week plus 24 miles at 64d. per mile (13s.), so that the total is £8 13s. The tonnage moved is 120 and the cost per ton is nearly Is. 6d. Add 30 per cent, for profit and we arrive at a rate of Is. 11d, as against 2s. 3d.. which was quoted previously. Regarding the 12-mile lead, in that week 360 miles are covered in running the 15 journeys, and at 64d. per mile this amounts to £9 I5s. The total cost is thus i17 15s., for which 75 tons are carried. The cost per ton is 4s. 100., and that, plus 30 per ceht. for profit, is 6s. 4& per ton instead of 6s. 8d. as previously.
The Time-and-mileage System
In view of the probability that the arrangement of the work will be irregular, the time-and-mileage system of calculating rates is the most suitable method to apply. I should point out that the work is irregular in two ways; first, it will be spasmodic and, secondly, the lead-mileage may be anything between half-a-mile and 12.
We have already some figures which can be used in assessing the time-and-mileage rates. We have £8 per week for fixed charges, and 6id. per mile for running costs. Add 30 per cent to each of these and we get £10 8s. as the weekly charge, and 81d. per mile as the mileage charge.
I am taking the 44-hour week as a standard for, in adding 30 per cent. allowance for profit. I have already provided for the ptobability that /he average week's work will be less than 44 hours. On the basis of a 44-hour week the charge per hour must he 4s. 9d.
In applying these time-and-mileage charges the first thing to ,do is to calculate the terminal cost. it is assumed that the average time to load the -ma.terial is 1 hour and the average time to unload hour. Terminal delays are, therefore, l hours, which, at 4s. 9d. per hour, is 7s. lid., and that amount figures in every calculation.
For the half-mile lead we take 15 minutes as the overall travelling time, so that the travelling charge is Is. 2id., and for mileage 81(1., making Is. 10d. Add the 7s. lAd. terminal charge and we get a total of 9s. Old., which is practically Is. 10d, per ton.
I have cone through the various lead-distances in the manner outlined, and they are set out in the accompanying schedule.
Gives Greater Accuracy
The fact that the rates calculated according to this timeand-mileage method are less than by the previous procedure, is accounted for by the fact that the last method is more accurate. The other methods are loose in that in both of them an even number of journeys per week is assumed. whereas in fact that will seldom occur. On the other hand, it has to be admitted that the time-and-mileage method makes no allowance for loss of time but assumes that the operator will be able to make up a full day's work by mixing long and short leads. This I consider is a reasonable assumption. S.T.R.