Burn your old chassis
Page 56
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The time has come for operators to begin protecting themselves from the all-too-easy-to-get-in operators' licensing system. Each month dozens of new operators come into the business, many of them with second-hand vehicles. These vehicles have been indirectly supplied by us, the existing operators—traded in against new vehicles for some paltry sum which in any case could have been obtained by way of discount on the invoice for the new vehicle. We can and must stop making it too easy for these men to buy our old vehicles and come into the business to under-cut our rates, and—who knows ?—eventually put us out of business.
I don't know of any other industry where the proprietors make their plant available at knock-down prices to their opposition.
Two simple sums will serve to illustrate how mad we are to get involved in trade-in deals. If you get £1,000 for a second-hand vehicle against a £19,000 new purchase and the revenue for your replacement vehicle is £60 per day, it. takes only 16 days' loss of work for that new vehicle to gobble up the £1,000 in revenue. Six months' loss of work swallows up the profit margin !
The alternative is to scrap the vehicle and by this I mean burning up the chassis frame so that it cannot be used again. The scrap value of all the metal parts would probably be around £100, but think about the spares that Can be cannibalised. Consider how much time and money can be saved by having units and components overhauled and put on shelves ready for use. In this way you are running your own immediate replacement service.
When all the facts are carefully consldered there is just no case for trading in, but an outstanding case for scrapping and cannibalisation. We have adopted a short-sighted policy for years and our stupidity in the days of plenty is hitting us now. We should treat it as a matter of urgency and stop it now or one day—perhaps sooner than you think—we will be the ones who are buying back trade-in vehicles from the men who are buying ours today.
ROBERT WILSON, Managing Director, M. A. Wilson and Son, Haulage Ltd, Dunfermline.