Simplicity Must Be the Keynote c a Rates Schedule
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IN pre% iotts articles, I have dealt with the problem of rates assessment, first, from the purely theoretical aspect, arriving thereby at results which, I must confess, were hardly worth the trouble and, secondly, from the purely practical angle, basing calculations upon operational data talcia from the recorrds of responsible haulage companies.
The results of the second set of observations brought the conclusion that it would be safe, probably better, to take the 7-8-tonner as the standard vehicle, basing rates on the assumption that it would be the type of vehicle most commonly in use. Rates calculated in that way could be applied in respect of loads carried on all sizes of vehicle, for pay-loads of from .6 tons up to the maximum—assumed to be 15 tons—provided the loads involved only one pick-up and one drop per load.
Without going any deeper into the question of actual rates, I then proceeded to discuss the effect, upon any standard rate, of the several factors enumerated in an earlier 'article of this series. I dealt first with that of type of vehicle, with particular respect to class of bodywork. Taking an outside figure of £200 extra for a special van body, I arrived at the conclusion that, over a route of about 200 to 220 miles, the rate would have to be increased by Is. to provide for the extra expenditure on the body in the first place, and in upkeep and depreciation.
Actually, of course, the £200 was an outside figure, and an average addition of 6d. per ton would suffice to cover all the extra expense involved in special classes of body. That is, of course, apart from bodywork which is reserved for unusual traffics, outsize loads, and special work, to which a standard rates schedule would not apply, Traffic Handling at Terminals The next of the list of factors which must be considered in this matter is ease or difficulty of lOading and unloading, and of handling the traffic at terminals. This is an important subject. It is not, however, a difficult one. The first thing to do is to agree upon a standard time . for loading and unloading. This, as I have shown on previous occasions, can quite fairly be taken as averaging 10 minutes per ton of pay-load, plus 15 minutes for signing documents, turning round, sheeting down and so on. For a 7-8-tonner that means an hour-and-a-half at each end of the journey, .
, According to "The Commercial Motor Tables of Operating Costs a 7-8-tonner is worth 6s. per hour standing time. The value of these terminal delays is, thus, 18s. per single jOuthey'or £1 16i. per round trip. A fair assessment is 2s. 44d. per ton of pay-load; that is the terminal charge.
If this be considered in relation to other sizes of vehicle,
an apparent need or differentiation will be found. In the case of a 6-tonner, for example, the time is 21 hours per journey. The rate per hour for standing time for a 6-tonner is, according to The Tables, 5s., so that the cost of the terminal delay is 12s. 6d., which is 2s. Id. per ton.
It may be recalled that in the Leeds Schedule, which have at the back of my mind all the time I am writing these articles, allowed 2s. per ton for terminals. It was, admittedly, based fundamentally on the use of a 6-fan vehicle, so that there is not much disagreement.
If the case of a 15-tonner be taken, the total terminal time per journey is 54 hours and, at 9s. 3d, per hour, that is equivalent to £2 10s. lOid., or nearly 3s. 5d. per ton. The difference, between 7-8-tonners and 15-tonners, in respect of this terminal charge per ton is, however, more apparent than real. It is to be expected that, on a 15-ton load, there are sure to be more opportunities for cutting the times than on a smaller vehicle. I am of the opinion that the figure of 2s, 44c1„ quoted in respect of the 7-8-tonner, would be equally satisfactory in application to a 15-tonner.
Agreed Tonnage Charge for Terminals Moreover, I think that, having in mind the fact that we are trying to agree an average assessment, it would be a mistake to try and upset the figure of 2s. per ton for terminals, which is more or less established by the Leeds Schedule and to which, in principle at least, I fully subscribe.
The next factor on the list reads: prospect of terminal delays, due to causes other than merely time involved in loading and unloading. Before attempting to deal with this item it may be as well to recall our terms of reference, as they might be called, It is to try and lay down the basis of a national schedule of stabilized rates. If possible, we are to arrange matters so that there shall be, generally speaking, no need for a classification. Above all, the schedule must be as simple and easily understandable as possible. In that way the rank and file of the industry may be more readily persuaded to adopt it and to abide by it.
Now, if too much importance be attached to this particular factor, coupled with the one preceding it (loading anti unloading), it will be possible to create an argument in favour of classification which May be difficult to refute for this reason. Taking the two items together—loading and unloading—in addition to other terminal delays, such a range of times and rates could be set up as would justify a goods classification for road transport which would put the railways" equivalent entirely in the shade.
At one extreme there might be a load consisting of a billet of steel, picked up in Sheffield by means of a crane. so that the vehicle is in and out of the yard with its load in 10 minutes or so. At the other extreme there might be a pick-up at the docks, involving, perhaps, a whole day in hanging around for the load, that being the usual experience for the type of traffic under consideration.
Between these extremes 4housa.nds_of examples could be quoted, all different, and each involving a separate class. because its total terminal times differ so slightly from any other traffic. That would mean thousands of classes, the rate for each being only a little higher or lower than the next in the scale. We should have., in fact, just the thing we do not want.
F'art of that trouble is eliminated bx agreeing upon a 2s. per ton terminal charge for all but exceptional traffics. That covers normal loading and unloading at a rate which provides 11 hours for each operation with a 6-tonner, 1+ hours for each in the case of a 7-8-tonner and, somewhat less in proportion, 2-21 hours for a 15-tanner.
Excessive and frequently recurring delays beyond those times should be charged for At a demurrage rate, which should be not less than twice the standing-time rate mentioned above. Thus, in the case of a 6-tonner the demurrage rate should be 10s. per hour, for a 7-8-tonner 12s. per hour and for a 15-tonner 188. 6d, per hour.
I should regard those amounts as minima. They are not, as might possibly be imagined, raised to that height so is to penalize the customer for detaining the vehicle. They are, in fact, justifiable, for they represent amounts which the operator could quite easily earn with the yehicle if it be on the move.
Liability of Vehicle to Damage The next item. in the list of factors affecting rates is liability of the vehicle to suffer damage in the process of loading and unloading as well as in transit, because of the nature of the goods carried.
There is, in my opinion, little in this to make a fuss about. The most that could haPpen. I should imagine, in the way of da.mage brought about in this way, would not involve expenditure in excess of about £10 per annum, over and above the normal cost of repairs to bodywork. Now, that is equivalent to about one-tenth of a penny per mile, less rather than more. It would mean, in a 200-mile journey, about Is. 6d. to Is. 8d. Take the worst case, a 6-tonner, and the difference would amount to 3d., per ton. With a 15-tonner it would be just a little more than Id.
. per ton. Leave it at that for the moment, until I have discussed and dealt with the remaining factors.
The next item is the prospect of return loads of traffic of a nature such as can be accommodated in the particular type Of vehicle.
Now, this is the real kernel of the discussion. What
• provision can there be, in a Nation-wide schedule, for variations in rates_due to the prevalence or scarcity of return. loads? .
In the Leeds Schedule it was assumed that there were no return loads. There was justification for that attitude, because the Schedule 'was prepared for use in connection with Government and urgent traffic which had to be forwarded by road under war-time conditions: the traffic had tS) go whether there was a return load or not. It was specifically laid dowp that time was not to be unnecessarily wasted in looking around at the other end of a journey for a load which, often enough, was not there to be collected.
For this and other reasons it was decided—about 15 months ago—that in compiling the Leeds Schedule, one-way loading was to be assumed. That assumption would not be accepted to-day. It will certainly be impracticable when peace returns.
Rates based on one-way traffic are economic only over' routes on which return loads cannot be had. To charge on the basis of one-way rating when a return load i3 brought back every time that the vehicle goes out, would bring in profits which are outside commercial politics.
Making•Allowance for Return Loads Some allowance must be made for return loads. The question is, hov) much ?
Actually, the amount is incalculable, if we must think in terms of a national schedule applicable to every route. On some journeys, between Manchester or Liverpool and Lon
don, or between Yorkshire and London, the percentage of return loads,' in normal times, is 85 or over. On others, as, for example. London to Southampton, the percentage is 60 to 65. On other routes, the proportion of return loads which can 'be expected is even less..
One of two methods of procedure must he adopted to meet these circumstances. Either there must be different schedules for different routes, or the profitable routes must be made to subsidize the others.
The first of these suggestions iliquite impracticable. The second is, to my mind, the only hope. If a Nation-wide
-schedule of rates is going to be enforced and if, as is fore cast in authoritative quarters, the rate per ton per mile is to be the same throughout the country, then operators on routes over which return loads are plentiful will have to subsidize those who are confined to routes where such favourable conditions do not prevail. If the industry does not formulate some such scheme within itself, Government interference will develop automatically.'
However, assuming that division of profits is in •some way effected, it must be clear that, in assessing rates, some half-way figure between _that which applies on the best routes and that which applies on the worst routes will have to be selected.
In that event, I am of opinion that a reasonable assuinption, for traffic over routes in excess of 150 miles from point to
point, is that 60 per cent, of the return journeys will be
loaded. From 80 to 150 miles it cannot be assumed that more than 30 per cent, will be loaded on return journeys. Below 80 miles lead I would make no provision whatever in the rate for return loads, not because they are never there,. but because tffe difference in earnings, as between' loaded and unloaded journeys, is rarely sufficient to justify a cut in the outward rate.
There are, quite clearly, some knotty problems involved here, and I propose to leave them for discussion in a subse quent article. S.T.R.