Rationing May Double Charges
Page 56
Page 59
If you've noticed an error in this article please click here to report it so we can fix it.
—If Operators' Earnings Are to Be Maintained .• Because Mileages Will Be Drastically Reduced, the Element of Fixed Costs Will Be Higher Per Mile Run : Effects Upon Various Sizes of Vehicle Are Reviewed in This Article
SINCE the announcement that fuel is to be rationed as from December 17, operators have been anxiously considering the effect it will have on operating costs and charges. 1 theiefore propose to deal with some of the problems arising from this announcement, particularly as regards operating at reduced mileages.
A 7-ton petrol-engined vehicle operating 600 miles per week would normally justify a charge of Is. 9d. per mile. But if an operator is receiving only the basic allowance of fuel, I estimate the charge per mile should be 3s. 10d. If the same operator receives both basic and supplementary allowances, the charge would still be as high as 3s. 6d. per mile, or 100 per cent. above the normal charge.
For a 16-ton oil-engined vehicle, the charge per mile is 2s_ when operating 800 miles per week. If it were limited to basic ration only, the charge would have to be
3s. 1 lid. per mile—a 98.3-per-cent. increase. .
I must emphasize that I have had to make several assumptions about the amounts of fuel which may be issued as supplementary rations to various types of vehicle. The figures in Tables 1 and 2 are in no sense to be taken as official, or even as what I consider to be a fair allocation.
My calculations are based on the details of the rationing scheme as announced by the Ministry of Fuel and Power last week. It includes a specific basic ration assessed as one gallon per unit for petrol vehicles and two-thirds of a gallon per unit for oilers. [Details of the allocation of units appear on page 615.]
The five vehicles specified in Tables I and 2 l' consider to be representative of the wide range shown in "The Commercial Motor Tables of Operating Costs." They comprise two petrol-engined vehicles with payload capacities of 3 tons and 7 tons respectively, together with three oilengined vehicles of 8-, 12and 16-ton capacity. The 12-tonner is, of course, a six-wheeler and the I6-tonner an eight-wheeler.
Solvin Proble the C
The petrol lorries have a basic ration of 2 gal. for every half-ton of unladen weight, which gives a weekly basic ration of 10 gal. for the 3-tonner and 12 gal. for the 7-tonner. Carrying this a stage further, if we accept 14 m.p.g. and 10 m.p.g. as reasonable averages for the respective vehicles, we arrive at corresponding weekly mileages of 140 and 120. As the Government consider that the basic ration represents half the normal consumption, a weekly mileage of 140 for a 3-tonner and 120 for a 7-tonner must likewise be their estimation of half their normal weekly mileage.
Supplementary rations of 25 per cent. of normal consumption for petrol-engined goods vehicles and 40 per cent. for oilers are shown in col. 5 of Table I. Using the same figures for fuel consumption for each of the five types of vehicle as are employed in the Tables, it is clearly possible to obtain the figures for weekly mileage in cols. 7, 8 and 9. In col. 10, I have shown what Lconsider to be a normal weekly mileage foreach type, a lowr mileage being taken for the lighter vehicle likely to be engaged upon retail delivery, and the higher -mileage for the heavier lorry on long-distance work.
At first sight, it may seem that the addition of col. 10 only confuses the issue, but when one considers Table 2, it will be seen that the figures shown in col. 10 are the basis for fixing a yardstick for the comparisons of costs and charges.
In Table 2, I give the minimum charges recommended for all five types of lorry for the various mileages shoWn under the three headings: " Before rationing "; "On basic only "; and "On basic and supplementary."
The costs per mile in col. 4 are the same as those shown for the corresponding types and Mileages in the Tables, but those set out in cols. 6 and 9 have been adjusted to take into account the lower mileages.
Here 1 should mention a further assumption I have made that rationing will be limited to the period from
g the ms of arrier
December 17-April 17, -1957. It was necessary• to have in mind some fixed period—whatever it may`be—to determine the effect of rationing on standing charges.
For example, if we knew definitely that the period of rationing would be much longer, many operators of fleets would no doubt consider de-licensing some of their vehicles for the duration of rationing. But in view of the shortness of the period, coupled with the general uncertainty, I have decided to make no adjustments to standing charges. • Incidentally, during the period under review the levy will cease, but as it is such a small item, the change will have little effect on the final figures. The reasons for retaining the licensing item on the standing charges at the full rate apply equally to the retention of full wages despite exceptionally low mileages.
I have taken the view that, as a short-term policy, it would be impracticable to reduce the amount of the standing charges if one still intended to give service to customers. More especially is this true qf the operator of two or three vehicles, to whom an overall reduction of 10 per cent., for example, is hardly applicable.
The only reduction one would therefore expect in operating the-lower mileages entailed by rationing would be a direct reflection in the running costs, but even here, if one did attempt to work on such low weekly mileages, I suspect that the balance between local and long-distance work might be adjusted to include more local work. In that case I would expect the fuel consumed per mile to be higher.
With the standing charges remaining at the standard figure as shown in the Tables, the lower weekly mileage figures given in cols. 5 and 8 of Table 2 are reflected in cols. 6 and 9. Some operators may consider the figures set out there to be unrealistic, especially in col. 6 (" On basic only In reply, I would point out that to operate an eight-wheeler 213 miles per week is also unrealistic, but for the purpose of rationing those are the figures on which I have to base my calculations of economic earnings.
Hours of Work
With such low weekly mileages resulting from rationing, it is impossible to deal lanth the effect it would have on the charge to be made on an hourly basis. Here I suggest each individual operator would first have to ascertain from his customer just how a reduction in hours worked, to correspond with a reduction in fuel issued, was to be effective— for example, whether it Was to be a corresponding reduction each day, or whether perhaps .five days' work was to be consolidated into, say, three. Co-operation with customers will have to be close during the rationing period.
As an indication of the increase likely to be incurred tn operating costs by fuel rationing, whatever the mode of charging may be, I have shown in cols. 7 and 10 the percentage extra which I estimate will result from operating on reduced mileages. These range from a 77.3-per-cent. to a 120.7-per-cent. (with an average of 102.4 per cent.), increase as a result of operating on basic ration only, whilst in the case of vehicles operating on basic and supplementary ration the increase might range from 26 per cent. to 100 per cent. with an average of 50.6 per cent.
have had to omit from my calculations some items which may affect some operators but not others. For example, fuel costs will be increased to some already enjoying rebates for bulk purchases by the amendment of this concession. There also appears to be every possibility of an increasq in the price
of fuel resulting from the many factors involved in the Suez crisis. Estimates of the possible higher cost of fuel have varied up to 6d. per gallon.
'Readers may be puzzled by the figure of 100 per cent. shown in col. 10 of Table 2, referring to the 7-ton petrol vehicle, particularly as it appears to be so much out of step with the percentage increases given for the others. In fact, this spotlights the unfairness of the fuel rationing scheme.
Probably no type has received so much attention from manufacturers in recent years as the 7-ton petrol-engined. goods vehicle to bring it under 3 tons unladen weight. Scant reward indeed that their efforts should now be rewarded with a corrtspondingly reduced fuel ration!
In addition to operators having to face the grim repercussions that rationing must inevitably have on operating costs and charges, they must also endeavour to solve the imponderable problem of the effect that rationing—and especially the restriction of oil supplies to industry—will have on their available traffic, even assuming they have sufficient fuel to operate their vehicles A reduction of 10 per cent, in the supply of fuel oil to industry is already announced and the cut in supply of gas/Diesel oil for industrial use will be increased to 20 per cent. from January 1. Despite Government exhortations to trade and industry to maintain their present output, the haulier will be among the first to be brought face to face with the inevitable realities of the situation. These wilt include both a reduction and a dislocation of the flow of available traffic.
Added to these problems for the operator is the Government's announced intention of channelling as much traffic as possible back on to rail. There will, nevertheless, remain a large amount of traffic which cannot be carried by rail, and it is questionable whether sufficient fuel will be available for road vehicles to cope with the minimum volume of these movements. Operators to whom I have spoken have given facts to support my estimated figures for weekly mileages under rationing, and they are gravely concerned as to their ability to meet demands.
So with increased costs from reduced weekly mileages. reduced and probably more erratic flow of traffic, coupled with a Government-sponsored back-to-rail campaign, the outlook for the haulier is indeed grim. In fact, if these conditions do obtain and continue for any length of time, a substantial reduction in both vehicles and operators would seem inevitable. S.T.R.