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"SIZE or QUALITY

31st October 1958
Page 58
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Page 58, 31st October 1958 — "SIZE or QUALITY
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Which of the following most accurately describes the problem?

Which is Cheaper?"

S

" HOULD we operate a 5-tonner selected from the popular

range of vehicles, or a 3-tanner in the medium-price class?" This was an inquiry received recently. The operators said they were engaged on runs between London and the Midlands involving a weekly mileage of 200-450. The present fleet was fitted with van bodywork, and either the 3or 5-tanner mentioned would initially cost £2,200.

They were C-licensed operators and transport was only a secondary consideration for them, but they asked for advice on the subdividing of transport costs to enable them to make a useful comparison between these two types of vehicle for their particular job.

The inquirers then specified two makes of vehicle, but I have to point out that comparative costing of operating different makes of vehicle is never made, or even implied, in this series of articles or in correspondence. Any comparisons I make are limited to types of vehicle rather than makes.

The 10 items of standing and running cost which these two vehicles might be expected to average are set out in the table. 1 have had to make some assumptions. The unladen weight of the 5-ton oiler, for example, has been taken at 3 tons 15 cwt. and the smaller vehicle at 3 tons. Corresponding annual licence duty is therefore £46 55. and £35, or 185. 6d. and 14s. respectively per week.

Insurance Variation

Wages are reckoned as the same in both cases based on R.H.(64) for a 44-hour week, with additions for holidays with pay and insurance contributions. A nominal amount of Ws. 6d. for rent and rates is included for both vehicles.

It is noted-that the initial price--£2,200—is the same for each

vehicle, but the cost of insurance varies slightly, because the rate is relative not only to the initial cost but also the carrying capacity. Interest on the capital outlay is charged at 3 per cent., giving a total standing cost per week for the 5-tonner of £12 9s. 9d., or approximately 5d. per mile on •the assumption of the anticipated weekly mileage of 600. Corresponding figures for the 3-tonner are £12 is. lid. per week, or 4.84d. per mile.

The first item of running cost—fuel--has been assessed on an assumed cost per gallon of 3s, .10d., a consumption figure of 18 m.p.g. for the larger vehicle and 22 m.p.g. for the 3-tonner. The comparative costs of tyres and maintenance are approximately relative to the carrying capacities.

It is on the last item, depreciation, that probably the greatest difference of opinion as to the correct assessment may occur. As the initial cost price of both vehicles is the same, it would c22 seem reasonable to assume that the smaller vehicle would be of more robust construction, as a result of which a longer life could be anticipated. I have assumed that the economic life of the 5-tanner would be 125,000 miles and 150,000 for the 3-tonner, giving the depreciation costs per mile as shown.

Comparative operating costs per mile are therefore 15.25d. for the 5-tanner and 12.47d. for the 3-tonner. It should be emphasized, however, that these two figures do not make any allowance for overhead or establishment charges.

AVING been fined for speeding in a van, a reader writes suggesting._ that many other yan drivers would like to know the law in respect to these vehicles. In particular, he alleges that many differing versions are current as to the law. He adds that many small vans are built on popular car chassis, for which reason it. seems paradoxical that they are restricted to 30 m.p.h. Speed limits are determined by the construction of the vehicle as a whole rather than the chassis or the use to which it is put. As a van, as distinct from a dual-purpose vehicle, is constructed (Continued on page 511)

or adapted for the conveyance of goods, it is termed a goods vehicle, and under such classification is restricted to a maximum speed of 30 m.p.h. at all times.

In contrast, private cars or dual-purpose vehicles, as defined in the Construction and Use Regulations, are primarily constructed for the carriage of passengers. Although dual-purpose vehicles can be adapted for the carriage of goods, they are not subject to speed restrictions except, of course, in built-up areas.

In comparing the advantages or disadvantages of operating a small van as compared with a private car or dual-purpose vehicle, one can either choose to take benefit of the lower rate of purchase tax (30 per cent. on the chassis being applicable to a van) but be subsequently restricted in operation. to 30 m.p.h, or purchase a passenger vehicle carrying no speed restrictions but liable to a higher rate of purchase tax, that is, 60 per cent, on the total vehicle.

Should a user of a van find the restriction of being limited to 30 m.p.h. too irksome and contemplate converting it so as to come within the category of a dual-purpose vehicle, it should be emphasized that the fitting of side windows, for example, would immediately bring the vehicle into a higher-rated class for the purpose of calculating purchase tax.

It would then be the responsibility of the person carrying out the -alteration to notify his local Customs officer, and that official would then determine the balance of tax payable to bring it within the private-car or dual-purpose category.

ANOTHER inquiry relates to the use of a container on a flat or platform vehicle. "Have I to pay tax on the lot

or on the lorry? " asks a reader. In accordance with the Vehicles (Excise) Act, 1947, Section 26, containers specially constructed or adapted for carrying livestock and used solely for that purpose are not included in the taxable rate of a vehicle.

Tax is also not payable on any other type of container so constructed or adapted that it can be lifted on or off the vehicle with goods in, and from time to time is actually used for that purpose in the normal course of business. Should there be any doubt whether this condition was being complied with, the onus of proof would be on the operator. If the container is not removed from the vehicle, its Weight along with that of the vehicle would make up the total taxable rate.

I-1 A MORE unusual request comes from a large company in connection with escalation clauses in contracts when it is sometimes necessary to make provision for the rise and fall in transport costs. They ask whether successive issues of "'The Commercial Motor' Tables of Operating Costs" can be

used for this purpose, or whether any transport cost index figure is available as a basis for the calculation of such escalation.

Whilst copies of the Tables going back many years are available •for examination at this office, they can no longer be purchased by readers. However, on January 3 an article then appeared entitled "Ten Years of Rising Costs," in which all items of cost incurred in operating a 5-tonner 500 miles per week, and a maximum-load eight-wheeler 80.0 miles per week,

were given for the years 1948, 1953 and 1958. .

Readers interested in making comparisons of this nature should note that in the new edition of the Tables details are

given .for 10 successive years from 1949-1958 of the price -of,. a typical commercial vehicle, wages payable to drivers in the 5-10-ton category (formerly, of course, 5-8-ton category) and the cost of standard or bulk petrol and oil fuel.

WITHIN the next 12 months intend to start a haulage VV company with approximately £10,000 capital, and i should be grateful if you could advise me on present haulage rates and procedure for obtaining an A licence for haulage in England and Scotland." This is the gist of a further inquiry.

When it is apparent that the proposed operator is starting so completely from scratch, whatever his financial resources may be, an indication of the source of information he seeks is all that I can attempt in the first instance. It would be advisable for him to obtain a copy of the new Tables to acquaint himself not only with the method by which costs are computed, but also the charges which would have to be obtained if his undertaking were-to prove profitable.

Following this, presumably some preliminary canvass would have to be made to ascertain the possibility of potential traffic at suitable rates. Only if such canvassing proved successful would it seem prudent to pursue the matter of licensing.

In accordance with the Road and Rail Traffic Act, 1933, it is an offence for any person to use a vehicle on the road for the carriage of goods for hire or reward except under licence. An A licence would permit this correspondent to operate specified vehicles for hire or reward but not in connection with any business carried on by him.

Application for such a licence has to be made on form GB lA and submitted in duplicate to the Licensing Authority in whose area the lorry will be based. An explanatory leaflet

may be obtained from the same source. &B.

Tags

Organisations: Licensing Authority
Locations: London

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