The Problem of Solving the Problems Milk Haulage Rates of the Carrier
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Some Troubles Arising From Rationalization of Deliveries: Wide Divergence in Coriditions, Costs and Rates: Difficulties Attendant Upon " Picking-up," Which Farmers Make No Efforts to Alleviate
MILK haulage is, perhaps, the most outstanding of the many traffics to which the application ' of stabilized rates is likely to be extremely difficult, if not impossible. The conditions vary, as do the gallonage per mile and the number of pick-ups per journey, and all these things can be different over hauls in the same area. On top of that it is the fact that the differences again arise, and in greater degree, as between one area and another, with further variations according to the particular part. of the country.
I have attended meetings of milk hauliers where, in the course of the discussions, it has become apparent to me that whereas one or two amongst those present were making a nice living out of the job, most of them were barely earning a profit; some were definitely working at a loss. Yet allthe rates Which these operators are receiving are , controlled by the Milk Marketing Board, which, one' would have thought, would have taken some pains to see that, at the very least, each operator working on this important service was reasonably paid for his job.
In many districts, the Board's rationalization scheme aggravated rather than ameliorated the position. Some, already reasonably happy as regards conditions „and remuneration, were even better off after the rationalization than before and, quite naturally, they are keeping quiet about it. The majority finds matters more difficult than they were.
Here are one or two examples of the kind of thing that is happening under this scheme.. There is the case of an operator who was accustomed to collect 1,100 gallons from 18 farmers. The condition§ were such that he was able to do that work with one vehicle, and most operators will appreciate that, such being the case, he was able to make this job a paying one.
Increased Collections but the Gallonage is Less As the result of this reorganization of deliveries, he has now to collect from 32 farmers and the total galltmage is only 900 per day. Moreover, the number of pick-ups has increased to such an extent that he is unable to make the round with one vehicle and has to use two machines for it. In other words, hi& costs are approximately double and if, as is likely, the rate is the same as before, his revenue is reduced by nearly 20 per cent.
In another case, an operator who, previous to the rationalization scheme being put into force, collected 300 gallons from two farms, has now -to call on no fewer than 10 farniers and collects only,96 gallons.
-Another day's work mentioned was the collection of 282 gallons from nine farmers, delivery having to be effected to three places. Then, again, there is the case of a man having to use two lorries where, formerly, one sufficed, and earning less with the two than he did with the one. Previous to the' alterations, this operator collected 1,100 gallons from 16 farmers with one Vehicle. The revision of routes meant that he had to call on. 37 farmers and collect only 850 gallons. • In the course of the discuSsion of these matters certain suggestions were put forward, whereby it was hoped that such disabilities, suffered by so many milk carriefs, would .
be remedied. .
One was that, in assessing rates for milk haulage, there should be an allowance varying in proportion to the number of calls each vehicle had to make, so that an operator calling on 30 farmers would receive much more
than one calling on no more than 10. It was not made clear just how this allowance should be assessed, but the idea;apparently, was tbat, with such a scheme in operation, there could be a flat rate per gallon for milk collection which couldbe reasonably general in its application. Furthermore that, in addition to the payment for gallonage, the operator should receive a fixed figure per pick-up.
Another of the troubles which besets milk hauliers arises from variations in the attitude of farmers towards those whO collect their milk. Some transport the milk churns in their own vehicles and place them on. platforms by the side of the hard road. This, quite naturally, is the procedure which is preferred by hauliers and it has more than once been suggested to the Milk Marketing Board that it should be a condition with which farmers must comply when entering into a contract for the sale of their milk.. Whatever may be the Board's views as to the fairness of including such a "condition in the contract, the fact remains that it is not included and the farmer is left to do pretty much as he pleases in this matter.
Where he does not put the milk by the side of the road, the work which the haulage contractor has to do is much more onerous. The vehicles have to leave the road and have sometimes to travel considerable distances along rough, badly made farm tracks to collect the milk, and then make their , way back over the same route. It is complained, and with every justification, that this not only increaseaconsiderably the time needed to complete-a collection round; but adds tia the maintenance and tyre costs of the vehicles concerned.
Responsibilities Which . Should Rest on the Farmer It was suggested that a farmer ought to be compelled to do one of two things. Either bring the churns to the side of a hard road himself, or put the roads leading to the farm in good condition, There were some who urged that the Milk Marketing Board should be askedd, to intervene in this matter, whilst others suggested that communication should be made to Tyre Control pointing out how serious was the increased wear and tear of tyres resulting from negotiation of these poor roads.'
It It was peanted out thatthese roads to farms are, private ones and that nobody but the farmer has any control over them.
One argument put fosward in answer to the suggestion that the Milk Marketing. Board should be approached was very illuminating, in so far as it threw light upon the opinion which milk hauliers, generally, hold of the Board. It was suggested that, it by any chance the Board was persuaded to .take action, and, parhaps, took the course
of insisting that the farmer place the milk by -the side of a bard road, the haulage rate for the milk would forthwith be cut and, probably, to such an extent that the haulier's position thereafter would be worse than before. A plain case of "Out of the frying pan into the fire."
In the end, I was asked to deal with a simple problem. Apparently the idea was to reach some sort of a figure which would show the comparative effect on the rate-pergallon of an increase in the mileage covered per round. The question was to quote a rate for milk haulage under the following conditions: (a) using a 5-ton. lorry, collecting 900 gallons daily, running 50 miles per day, seven days per week, and (b) a 5-ton lorry, collecting 900 gallons daily, running 100 miles per day, seven days per week.
Now, I chose to answer this from Table II of "The Commercial Motor " Tables of Operating Costs, making, however, some allowance for the increased operating cost of milk vehicles, as compared with average costs.
According to the figures in the Table, the rate per mile which a haulier should earn running 300 miles per week is Is. 6d., and running 400 miles per week, Is. 3,1d, The average of that for 350 miles is Is. qd. pet mile. Add to that approximate amounts to cover increased cost of maintenance and tyres, brought about by the difficult conditions already mentioned, and for the extra wages due to the seven days per week operation, and it seemed to me that a fair rate would be is. 6d. per mile. For 350 miles that comes to £26 5s. and for 900 miles per day or 6,300 gallons per week that is equivalent to ld. per gallon.
Similarly. I decided that 'it was fair and reasonable to suggest that for .700 miles the vehicle should earn not less than'Is, per mile, which is £35. per week, on which basis the earnings should be at the rate of lid. per gallon.
Arising fri5m these figures, it is interesting to calculate that, if, as the result of rationalization, the collection by the foregoing vehicles was reduced to 600 gallons per day, the rate would need to be increased by 50 per cent„ that is, it would have to be lid. per gallon in the first place, and 2d. per gallon in the second.
It should be appreciated, moreover, that as-regards costs, milk haulage, because 4af the peculiar difficulties which arise, is almost in a class by itself. One factor is the vast difference in the quantity of milk to be collected as between summer and winter.
In some actual figures from a milk-record book which I have before me, the minimum gallonage collected in any one week occurred during the first week in April, when the total was 4,478. During -the third week in June, however, the quantity was 13,188 gallons, or nearly three times as much, and that for the same roUnd and collecting from the same farmers.. Moreover, this fluctuation in quantity is going on, to a greater or less degree, throughout the year. In the last week of April, for example, the quantity was 9,528 gallons, more than double what it was in the first week of the month. The difficulty that arises here is that whereas an operator may, for a considerable period of the year, be able to carry out his work with one vehicle, there comes a time when this is, perhaps, barely -sufficient, and although he could do with li he has to use two,
Getting at a Basis for Calculating Charges
The first point that arises is that no preper figures for the expense involved in milk haulage can he reached without a full year's experience over a particular round. The second, admittedly covered in part by the first, is that it is no uie attempting to estimate costs and rates on the basis of figures` for one vehicle.
Then again, milk haulage, in most cases, is a seven-daysper-week, 52-weeks-per-year job, so that the normal provision for days off and weeks off for docking and overhaul involves the operator in hiring other vehicles to carry on his work.
Often it happens, too, in the winter-time that owing to the difficulties of access to farm premises, work which could quite easily be covered in good weather by one vehicle, becomes impossible, and, again, the operator has either to resort to hiring vehicles or to make use of two vehicles .when clearly one would ordinarily suffice-. s'
The question often crops up as to whether it iS possible, to use a vehicle, normally used for milk collection and delivery, on other work: ,
This depends on times of collections anddeliveries, and quite often these terminate at 2 or .3 o'clock in the afternoon, 'which would seem tb leave opportunity for carrying out other work. On the other hand, if deliveries terminate at that hour, the probabilities are that collection started very early in the morning, so that by the time the driver has got his vehicle back to the garage and given it a wash and clean, he has done a .day's work.
Actually, opportunities for using the vehicle again on the same day are not too frequent or, if they be, it is often difficult for the operator to take advantage of them unless he has spare drivers Or part-time drivers whom he can employ. It is rarely that that is practidable or economical. In this connection, too, it must be borne in mind that there-is a clause in the standard.donditions for the hauling
of milk whichstates-that: The haulier shall not carry,
along with milk or milk containers any article likely to contaminate them, and any vehicle used for carrying such an article shall be thoroughly cleansed before being used for carrying milk or milk containers." That is, obviously, a reasonable and fair condition but, having in view the limitations of time available, it must inevitably prohibit the use of the lorry for-all but limited classes of traffic.
It is of interest now to discuss some specific examples of costs and rates for milk haulage. I have some before me, which indicate that, in some crises at least, the 'operators concerned will be better advised either to keep their vehicles in the garage, or to turn to some other branch of haulage.
In Table I are, the figures put foaard by an operator who was asking for an increase of 30 per cent, on his collection charge of Id. per gallon.
In such cases, as all milk operators know by now, the haulier receives from the Milk Marketing Board a particular form which he is asked to complete. It is known as M.0.680.
Items Missing from Schedule of Fixed Expenses It may be recalled that some time ago I drew attention to this form and warned operators that it was incomplete, in as much as provision was not made for the recording of all the items of expenditure involved. I pointed out that, in particular, there was no provision in the schedule of fixed expenses for such items as garage rent, interest on capital outlay, or for establishment costs. I am, therefore, particularly interested to note that, in this example of a return made on M.0.680, the operator has taken my advice and has included all these items.
What :their omission would have meant can quite readily be apprecia1ed by anyone who will take the trouble to scrutinize the figures. The difference would have amounted to 2206, reducing his total annual expenditure from £941 to £735, a considerable difference,' indeed.
I shall be dealing with these figures, and others which I shall present, in the course of subsequent articles. Meantime. I must confess that the item of establishment charges; as entered On Table I, which, incidentally, include interest on capital, amounts to no lessthan £200. As the vehicle is a 4-tonner that means that the operator's establishmentcosts amount to nearly '£1 per week per ton of pay-load which, even I, would regard as extravagant.
The figures are, however, authentic and it will serve an excellent purpose if, amongst the many who read this" article, there be some Of those small operators who are still not convinced that establishment costs are a serious and not negligible charge upon their businesses.
Before closing this article it is of interest to note that the amount of 30 per cent, increase on his existing rate of /d. per gallon, which is all for which the operator-asks, is, in fact, insufficient to bring his income above the level of his expenditure so that if he obtained this 30 per cent. increase.he would still be carrying this milk without profit to himself..