Coal Haulage Rates Criticized
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A Reader Concerned in The Coal Transport Business Puts Forward Views on Suggested Rates to Which Our Costs Expert Replies I READ with interest the article on industrial coal'haulage rates by S.T.R. in your issue dated July 0, but there are several respects regarding which your correspondent's further explanation would be appre ciated. •
The rates shown were apparently built up from :— (a) Terminal costs.
(b) Cost ot running time (including standing charges and running costs).
(c) Excessive delays and traffic interference.
Taking •a journey of one mile lead, the terminal costs (on the basis of Table V) are shown as 6d. per ton, or 2s. per 4-ton vehicle, which, at the stated rate of standing cLarges (3s. per hour), assumes 40 minutes for terminals. It is taken that the cost of running time (8 mins. for two miles) is 3d. per ton (made up of 1.2d. standing charges and 1.8d. running costs). Thus the terminals and costs of running time per one-mile lead are taken as 9d. per ton. Then, without any supporting details, the sum of Is. 3d. is added for "excessive delays and traffic interference," i.e., an arbitrary addition of 160i per cent. of the calculated cost. Surely such an addition merits something more then the brief explanation given by your contributor.
• Can Additional Charges be Justified ? • It is stated by S.T.R. that the terminal charge was based on an "examination of the conditions," which showed that an average charge of 6d. per ton would cover terminal delays, and it appears that the addition of Is. 3d. per ton is intended to cover "delays and interference" other than terminals. Even if it were assumed, for example, that difficult traffic conditions reduced the average speed of the vehicle from 15 m.p.h. to 5 m.p.h. and doubled the running costs, the addition to the rate would need to be only 4.2d. per ton, as follows:— Extra standing charges ... ... 2.4d.
Extra running costs ... 1.8d.
4.2d.
How can the addition of is. 3d per ton, more than three times as much, be justified in what are described as average conditions? Even assuming double running costs, the delays on the first mile lead would need to amount to 1 hour 28 minutes to justify the addition of is. 3d.
The suggested elimination of the 1s. 3d. addition by 1d. per mile lead is another point not adequately explained in the article. It means that the cost of running time (excluding terminals) is stated to be:—
Per ton.
s. d.
First mile lead ... 1 6 Second mile lead (1s. 811.-1s. 0d.) Third mile lead, etc. ...
Even from yards in cities and towns the contrast between these costs could hardly be justified, but in the article the rates are stated to he appropriate for deliveries from collieries, which in many instances are so situated that traffic interference or delay during the first mile is negligible. It is unsatisfactory to base the rates on ascertained running costs of 3d. per ton per mile lead and yet to use 2d. per ton mile lead for every mile other than the first. The continued deduction of id. from the ascertained costs of 3d. is stated to be justified by the fact that "a little better average speed is possible for long leads": is it appreciated how great an increase of speed would be necessary to reduce the cost per ton mile lead by 1d.?
It appears that the additional war costs embodied in Table VI refer only to increased costs of running time (including running costs and standing charges), which are assessed at 0.5d. per ton mile lead, yet it is stated that the reduction of working hours has increased the standing charges of the vehicle per working hour from 3s. to 3s. 4d. (an increase of 11 per cent.), apart from the effect of increased wage rates. It appears that the items of 6d. per ton for terminals and 1s. 3d. per ton for "excessive delays and traffic interference," should, by reason of increased standing charges, be increased by sums far greater than 0.5d. to running costs.
What are described as "stabilized" rates for the haulage of coal are open to serious objection on general grounds, in view of the wide differences in loading and unloading conditions, traffic, etc. Rates based on " average " ccipditions may be satisfactory where a haulier has so many different journeys that his conditions are truly " average," but how can they be justified to a haulier whose conditions may be far from " average "? J. LATHAM.
• Explanation by Our Costs Expert • The arbitrary addition of Is. 3d. per ton represents• what I may term a link fashioned to bridge the gap between theory and practice, an artifice or expedient designed to provide for conditions which cannot otherwise be expressed in mathematical terms. The factors embodied in the formula used to arrive at the specific costs per mile and per' hour were derived from personal examination of the actual costs of operation of some 00 vehicles owned and operated by a dozen concerns. The terminal delays were assessed in the same practical fashion. When, however, the results thus achieved were compared with actual journey times, similarly ascertained from log sheets and operators' books, discrepancies were noted, especially in relation to the short leads. It was found that, in practice, the number of journeys per day on the shortest leads was much fewer than the results of application of the formula led me to anticipate. The phenomenon is peculiar in all similar kinds of haulage. Part of it is undoubtedly due to the distaste which drivers have for this kind of work. The railway companies provide for it in their roadtransport operations, and refer to the delays thus experienced as "cigarette time."
The weightage of is. 3d. per ton, diminishing by Id. for each additional mile lead, as described in the article, was devised to meet this peculiar condition.
I cannot follow Mr. Latham's objection to stabilized rates, which are, in my view, the urgent need both for the road-transport industry and the coal industry, as. well as for others similarly dependent on road transport. for the delivery of their products. Stabilized rates and the elimination of undue preference combine to form useful aid to the stabilization of the prices of the products and the rationalization of each industry as a
whole. S.T.R.