I must take issue with you over your inference that
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the identified transport cost of 6.62 per cent of turnover quoted in your article on Pullers (page 70 Jul) 5) equates to "low cost distribution"' (page 1.)
Distribution costs comprise at least the following costs: Warehousing, stock investment; transportation; order processing; management overheads.
The transport element is by nc means the whole of the story, anc many own-account people witldistribution costs of up to 40 per cellmay well have transport costs of lest than 6.62 per cent. In fact I know twc major companies whose entire distribution costs are less than 6.6; per cent of turnover.
It is not possible to quote a figure foi one company and make any compari. son of efficiency with anything othei than an exactly similar company Clearly any cost expressed as a prop. ortion of turnover will vary accordinc to the value of the goods bein handled. The same physical cost o distributing an equal quantity of cos metics or disinfectant will produce e• totally incomparable relationship witlturnover.
-Similarly, the need for all the elements comprising the tota distribution system varies according te the nature of both products an markets. A product which is processer during the harvest season and ther held in cold storage until sold wil attract vastly different warehousinj and inventory finance costs from product which is produced and sold or a daily basis and can be "warehoused' in the back of the delivery van.
I know little of the Pullers operatior but I suspect that they:
a) do not own stock — no inventor finance costs;
b) have little need for yvarehousinc C) do not have order processin needs; d) have no stock replenishmen system — trunking costs, stock-ou costs, stock planning costs, etc.
Some own-account people witl distribution costs of up to 40 per cent c turnover (on average 5 per cent to 2! per cent) could have very efficier transport operations.
R. JOHNSOI