Problems of the
Page 64
Page 65
If you've noticed an error in this article please click here to report it so we can fix it.
HAULIER and CARRIER
• HAV1 shown in my previous article that ▪ the problem of the parcels carrier who
wants to know what to charge for various weights of parcel, carried over different distances; can be solved by means of a formula. In the case of' a 30-cwt. van, working on a regular daily journey of 60 miles each way, with a total operating cost for the vehicle of £13 Us. 6d. per week, establishment charges amounting to £2 per week, and a profit of £4 per week (total revenue £19 us. dd.L the formula was shown to be +6, where W 60 X 112.
is the weight of the parcel in lb. and NI the distance it has to be conveyed in miles. The answer is in pence per parcel.
In explaining this I showed that certain assumptions had to be made and that they resolved themselves into one—that the vehicle was on the average, throughout a week's running, loaded to one-third of its rated capacity. The operator, of course, should check this.
If he finds, over a lengthy period of working, that he is regularly carrying more than an average of onethird the capacity of his vehicle, he has no need for worrying. It merely means that he is making a little more profit than the £4 per week allowed for in the calculations. Actually, the payment for each parcel over that specified average is profit—except, of course. the commission paid to the agents who have collected these packages.
The Importance of Records.
On the other hand, if he observes—again I must emphasize the importance of the records being taken over a lengthy period of working—that he is carrying, on the average, loads less than one-third the capacity of the van, that is an indication that he is making less than'£4 per week profit and he must act accordingly.
There are, in such circumstances, two courses open to him. He may persevere with his existing sates, devoting his energies to improving the service he 3330
renders to his custoniers, so that more people will come TO realize that, at the prices he charges, he is giving .good value for money. In any event, that is the wiser course.
The alternative is usually necessary if, on investigation, he finds that his prices are much higher than those that are being charged in other quarters for equivalent services. Then he may have to cut his prices, as well as take care that his service is of the best, so as to increase his loading to the point at which the minimum revenue is earned.
Watch Your Revenue Onething, at least, I think must have occuried to interested readers of this article, gnd that is the necessity of keeping a close watch on the revenue, comparing it with the amount that I have set down as a minimum. If it falls short for more than one or two weeks, prompt and close investigation to ascertain the
• cause must be made.
Now I must fulfil my promise to set out a table of charges for various weights of parcels carried over different mileages. Reference should he made to Table I which appears on the next page.
I am not forgetting, of course, that there are lorries other than those with a capacity for 30 cwt. and routes which are shorter or longer than 60 miles. It is, naturally, impossible to give figures for every available size of vehicle, and is quite absurd for me to attempt to consider every possible variation of route. The reader who studies this and the two preceding articles should be able to work out his own formula for his own particular vehicle and route, applying the solution of the foregoing problem to his own circumstances. I will, however, take two examples and again give the method.
First, take the ton van, running on a circular route of 100 miles. I shall assume, too, a five-day working week, as in the previous example. The off-day -shed-clay, as it should be-need not be Saturday, if that happens to be a good day for business.
Operating Costs for a One • tonner.
The total operating cost of a light type of one-ton van, according to The Commercial Motor Tables of Operating Costs, a copy of which, by the way, may be had by applying to the Editor, is £9 13s. per week, if it runs 500 miles per week. To that must be added a correction for the increase in the price of petrol from 1s. 2d. per gallon, which was its cost when the tables were compiled, to Is. 4d., its usual purchase price to-day. That increase, again• according to the Tables, is 0.03d. per d. rise in price per mile. The total, for 500 miks, is bringing the operating cost up to £9 18s. per week.
If we now take the establishment costs and profit to be as in the previous example, namely, £2 and 14 per week respectively, our revenue must be £15 18s. per week. The average load, onethird of the capacity of the vehicle, is 750 lb., and that amount is to be carried 500 miles, for £15 18s. That may be stated in another way. The price for 375,000 lb.-miles (750 lb. X 500 miles) must be £15 18s., which is equivalent to ' 1-100d. per lb.mile.
How to Ascertain Charges.
To find the charge for any parcel of any weight carried any distance, multiply the weight in lb. by the distance in miles, divide by 100, and add 6c1., the minimum charge. A 10-1b. parcel carried 10 miles would, in that
way, be subject to a charge of 7d., a 50-1b. parcel transported for 20 miles would cost Is. 4d., and so on. Table II shows the charges to make.
Now, assume a three-tonner travelling 800 miles per week, The total cost is £25 per week ; establishment charges £2 10s. per week, and a fair profit £5 10s., the total revenue being £33. An average load of a ton, carried 800 miles, costs -id. per cwt.-mile. To carry a cwt. for 50 miles should involve a charge of 2s. 1d., plus the minimum charge, which, in this ease, might he 9d. The total charge must be 2s. 10d.
Similarly, a 5-cwt. package carried 100 miles should bring in a revenue of £1 1s. 7d., made up of 500 id., which is £1 Os. 10d., plus 9d. Table III gives charges
Per cwt. for various mileages. S.T.R.