Dangers of Transition
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Expansion of small and efficient haulage businesses can bring difficulties if adequate control is not maintained INSUFFICIENT knowledge of costing has undoubtedly INSUFFICIENT knowledge of costing has undoubtedly
• been the cause of both the failure of many entrants into the haulage industry to achieve success, and the existence of rate-cutting, whether unintentional or otherwise. Because of this limited experience in commercial vehicle costing, the new entrant often assumes that his immediate expenses, such as fuel,' wages and possibly hire-purchase payments on his vehicles, are his main if not total outgoings. With every mile. run, however, substantial, potential expenditure is being incurred on the • three items of running costs, namely tyres; maintenance and depreciation.
As an example of the extent of this deferred expenditure, a 7-tonner, fitted with oil engine and averaging 600 miles per week. is estimated to hare a total operating cost per week of £39 Is lid. Of this amount only about half. £20 3s. lid., would have to be met immediately. In addition to the three items of running costs just mentioned, the 'balance to be met at a later stage would include provision for the ultimate payment of vehicle licence duty, insurance and interest charges on the initial outlay.
It is unfortunate both for the operator concerned and his local competitors if adequate provision through the setting up of a sinking fund is not made to meet this large proportion of total operating costs. The period of operation, however, is normally comparatively short. A much more serious and unfortunate situation can arise through totally different circumstances. A small haulier may have operated efficiently for a numbei of years, largely on the basis of a personal knowledge of both his staff and customers. Then, possibly due to the introduction of new industries in the area, he decides to add substantially to his fleet. It is just at this Stage that many small hauliers have run into difficulties because they can no longer control their fleets on the personal basis which has stood them in good stead so far.
IN many such circumstances the basic reason for previous success, namely personal service of the proprietor, has not been fully recognized. Consequently: the need for careful consideration of a suitable system of overall control, when some delegation of responsibility becomes necessary, tends to be overlooked. Even where such a need is fully appreciated, the likelihood of being able both to obtain and retain suitable personnel, to whom such responsibility could be delegated, should not be too readily assumed.
Although it must obviously be a hard decision to take,. especially when the opportunity for expansion presents itself. it would be preferable to remain an efficient but moderate-sized haulier than to expand and ultimately to have to accept a lower standard of efficiency, with obvious repercussion on the goodwill of customers.
. Because most small hauliers are essentially practical men. there is a greater possibility of loss of efficiency. or even failure. due to injudicious expansion. In such circumstances the retention of control must inevitably mean more paper work. What was formerly done by word of mouth must now be committed to paper and, unless the forms used arc properly drawn up and follow a logical sequence, delegation of duties will become practically impossible. When an operator has decided that he can no longer rely upon memory because of the increase in ihe size of his fleet, a reassessment of whatever recording system is already in use becomes necessary. It should then be borne in mind at the outset, whenever a new document is being devised, who is likely to complete it. When this is done by manual or outside workers the appropriate form should be as simple as possible and on adequate type of paper.
WHILST the aim to keep paper work to a minimum is ideal, the consolidation of two or more forms may itself defeat the object of simplicity Moreover, many such multipurpose forms may, in fact, require completion On only a comparatively small section' on any one occasion. Due to the high cost of stationery, such a practice could prove unnecessarily expensive.
For the same reason, it is wasteful to have an elaborate heading denoting the name of the company on any fcirm used internally only, since such information must obviously be self-evident to all concerned. Multiplied over many hundreds of forms used by even a comparatively small operator during a year, the cost of additional stationery thereby required could • be substantial.
For the purpose of identifying the several forms used in any recording system, and in order to facilitate the reordering of stationery, the initials of the company, followed by an, appropriate reference number, is all that is required. The reference number would serve an additional purpose if, by the employment of prefix letters, it indicated the function for which it was used, thus engineering, traffic or tyre records. Such a reference number can be conveniently included in the top left corner. This would then leave the top right corner which to most people is the more readily accessible, available for recording the information which would distinguish any one form from another of a similar group. In many cases this would be either the fleet .number of the vehicle concerned or the date, possibly week or month ending. relative to the period covered by the data on the form.
As recommended in "The Commercial WI...9r" Tables of Operating Costs, and in this series of articles, One sheet for each vehicle is used for recording operating costs; whilst log sheets, for the purpose of keeping a statutory return of drivers' hours of work, must necessarily have some degree of standardization. Similarly, desPite the wide variation which can obtain in the composition of fleets of. vehicles, engineering records appertaining to such items as mileage, fuel consumption and issue of fares must also have a measure of similarity.
Such a situation, however, does not apply to the recording of the movement of traffic. This is because of the wide 1349 variation not only in the type of traffic, but also the fluctuation in the rate of flow and the pattern of movement generally. In this respect the ancillary user is favourably placed. because his traffic recording system can be drawn up to meet the needs of one product in many instances.
Even so, many hauliers are specialized to some extent in the range of traffic which they move, and as a result should not find it impossible to devise a suitable traffic recording system to meet their needs.
Particularly when applied to road transport, the success of recording systems depends largely on the simplicity of method and the regularity with which the records are compiled. For this latter reason it should be arranged that summaries are made ,up at least weekly rather than monthly or quarterly. There are often Many queries which can be resolved easily when concerned with current events, but which become insoluble at a later date, despite much wasted effort on the part of the operator.
In the largest transport organizations there is usually a clear division between traffic and engineering departments, with a corresponding segregation of records. For other operators such segregation is not a practical proposition and the basis of all their recording is often a composite vehicle record sheet. Whether or not such a sheet covers the operation of a day or a week will depend upon the type of work undertaken by individual operators. Where long-distance journeys are undertaken, involving overnight stops, a weekly sheet would prove more practical.
The actual span of the week may be determined by the standard working week of the company concerned when the vehicles are operated under C licence. Where no such requirement has to be met, long-distance hauliers may find it convenient to arrange for their weekly vehicle sheets to commence on a Saturday and terminate the following Friday. This practice would reduce to a minimum the necessity to transfer information regarding loads still remaining on the vehicles from one sheet to another, which is both time-wasting and liable to introduce errors.
W, H'EN vehicles are engaged on daily work it is usually possible to extend the statutory log sheet to include whatever additional information is required. In addition to particulars of the journey and goods carried, details of mileage run and fuel consumed could also be .recorded.
When a weekly vehicle sheet is more appropriate to the work time the following layout is suggested. As previously recommended, the reference number of the form should appear in the fop left corner, with the fleet number Of the vehicle and the appropriate date forming the rest of the heading. Particularly when the drivel= is away from the home depot one or more nights will it be convenient to combine initially the record of the vehicle with the driver's time sheet. By so doing duplication of details iustifying the hours worked could be avoided since. these would be apparent from. the record of the vehicle.
Nevertheless, for the convenience of the wages department, it would be, advisable to arrange for the whole of the data relevant to drivers' hours to he confined to the right side of the sheet so that it can be readily detached after suitable checking. If• this were done it.would then be necessary to include a separate
heading over this section, showing the date, driver's name and possibly his check number.
The main section of the forrh on which a record of the vehicle is kept would be subdivided under the two headings "Journey" and "Fuel ", with seven horizontal divisions for eachday of the week. The first sub-section under the heading " Journey " should be vertically divided into six. In the first two columns would be entered the starting and finishing points. The third column would be the largest, in which details of collections and deliveries would be made. If it was the practice of the operator concerned to issue his own consignment notes, he might find it useful to introduce a further subdivision to allow for the inclusion of the serial number of such notes.
In this particular example. there then follows two columns in which the tonnage delivered can be analysed and subsequently totalled. It will be appreciated, however, that there can be many variations in this section of the form to suit the' traffic peculiarities of individual operators. It may also be necessary to increase the number of columns to facilitate the analysis of a wider range of traffics.
• When a large volume of traffic is moved by.an ancillary fleet it is invariably found more convenient to charge the several departments of the parent organization on the basis of a proportion of the total operating costs, rather than by the combination:,a mileage or tonnage charge for individual journeys. • Whether or not the traffic carried is measured on a tonnage basis, it is important to determine at the outset that the total of traffic mOved should be the amount collected or. alternatively, delivered. Otherwise duplication of the total tonnage carried during the week can arise, and especially if it is necessary to transfer a particular load from one weekly sheet to another.
The majority of hauliers will probably find that as the delivery of a load indicates completion of a particular job, it is more natural to record the tonnage when delivered rather than when collected, assuming this takes place on different days. The daily mileage is then entered in the next column.
Still assuming that the vehicle concerned is employed oh long-distance work, it will be useful to subdivide the section headed ." Fuel" into four columns. The first column permits the entry of the gallonage of fuel put into the tank of the vehicle, rather than any estimate of fuel consumed, which would always he liable to error apart from deliberate abuse. Similarly; the amount of lubricating oil issued is entered alongside. In the third and fourth columns provision is _made to enter details of issues of fuel from sources other than the home depot. These would include other depotsof the Same or associated organizations or, alternatively, outside agencies. In either event, the name of the suppliers together with the appropriate advice or invoice number are entered, so facilitating the checking of such advice notes for subsequent payment.
At the foot of the sheet the mileometer readings at the. start and end of the week are recorded and 'the difference checked with the total of daily mileages. The amount of tonnage, fuel and lubricating oil is also totalled for the week. Appropriate to the requirements of individual wages departments, a weekly summary of total hours worked by drivers can -also be made showing, for example, the allocation as between payment at standard rate, at time and a quarter, time and a half or double
time. S.B.