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Comparing tipper costs
Page 125
Page 126
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WHEN estimating most types of commercial vehicle operation, allowance must inevitably be made for variations in conditions which can vitally affect costs. But probably nowhere does this apply more than in tipper operation. Here working conditions can range from the worst possible to those one would expect to apply to platform vehicle operation.
Because of the need to transport a variety of semi-processed products in tipper vehicles the number of such vehicles now operating under reasonable conditions has increased. As a result the operating costs applicable to this range of tippers will be in marked contrast to those working in conditions more regularly associated with tipper operation, namely road construction work and civil engineering contracts.
When tipper operation is being undertaken for the first time this possible distinction between working conditions requires special attention. In this context it is significant that out of a total of around 113,100 tippers 66,600 are C-licensed. It can therefore be assumed that these C-licensed operators will be in a position to know precisely the type of traffic they will be required to move and the length of journey to be undertaken.
However, unless an Aor B-licence operator has a contract of such duration as to employ a vehicle throughout its working life, it is more than likely that some compromise will have to be accepted in vehicle specification in the interest of economic initial cost.
Weight per cubic yard
Again, those entering tipper operation must know the weight in relation to cubic capacity, of the type of traffic they are likely to carry. In contrast this need would not normally apply to traffic carried on a platform vehicle where the total weight on a vehicle is readily obtained by the multiplication of the standard unit carried —for example, 1 cwt. sacks or 4cwt. cartons.
Random examples of weight per cubic yard of traffic likely to be carried in tippers are:— Ballast (dry) 23/26 cwt., clay (dry) 15+ cwt., clay (wet) 26084 cwt., earth (dry loose) 16+ cwt., gravel 23+128+ cwt., hardcore (fine) 25 cwt., sand (dry pit) 20 cwt., sand (wet pit) 24/25 cwt. and—topically—snow (wet) 3+/12 cwt.
Efficiency in road transport operation is normally achieved and maintained as the result of a continuous process of experimentation and improvement, whatever the type of transport involved. In general haulage and a substantial proportion of C-licence operation, improvements in efficiency can be gained by more scientific journey scheduling, sometimes with the aid of a computer.
In tipper operation, however, higher efficiency is more often achieved by increased tonnage moved. A point here is that the tipper is, in fact, a bulk vehicle and probably the first example of this group of vehicle. As a result of being such an early example, the quick turn-round facilities (which its ability to tip its load provides) is largely taken for granted. As a result—in contrast to other types of operation—further improvement in turnround times (with the exception of the problem of queueing) is unlikely.
Faced with this situation it is unfortunate that the other alternative to increased efficiency—increased tonnages—can be wrongly applied, leading to overloading and other legal abuses which, unfortunately, are all too prevalent in tipper operation.
Such malpractices should not, however, mislead one into the belief that there are no legitimate means of increasing efficiency by increasing tonnages and correspondingly reducing costs per ton-mile.
Operating costs
To indicate just what can be achieved by greater vehicle utilization, or employing bigger vehicles, or both, I now give estimated operating costs for two tippers with load capacities of 7 tons and 15 tons and with average weekly mileages ranging from 600 to 1,000 miles per week.
Dealing first with the smaller vehicle, I will assume that the initial outlay on this 7-tonner is £1,575. With an unladen weight of 3 tons 18 cwt. the annual licence duty would be £90. Allowing for the minor addition of the proportional amount of the A-licence, the equivalent cost of licences per week would be £1 .16s. 9d.
As with the other four items of standing costs this latter calculation has been made on the basis of a 50-week year to allow for two weeks per annum when the vehicle will be off the road for major overhaul or driver's holiday.
The cost of wages to the employer is reckoned at £12 14s. 3d. a week. This is based on the current Road Haulage Wages Council Order RH (84) for a basic 41-hour week, together with additions for insurance contributions and an appropriate adjustment to permit holidays with pay.
In calculating this amount for a basic working weeic it is appreciated that when weekly mileages are high, overtime working could well be involved. But the extent of such overtime working depends so much on individual conditions that it is virtually impossible to evolve a "standard" amount of overtime relative to mileage operated. As, however, the amount for a basic working week is used throughout the comparison should remain valid.
Rents and rates in respect of garaging this vehicle is reckoned to cost the equivalent of £1 7s. 6d. Admittedly many tippers are garaged in the open but here again the same procedure is adopted for both vehicles. Comprehensive insurance cover in a medium-risk area is reckoned to cost £132 10s. per year or £2 14s, per week.
Interest rate Interest charged at a conservative rate of 7+ per cent on the initial outlay of £1,575 adds £2 7s. 3d. a week to the standing costs, giving a total of £20 19s. 9d. a week for the five items. Where the average weekly mileage is 600 the corresponding standing cost per mile for this 7-ton tipper would be 8.40d.
There are correspondingly five items of running costs. A major item is fuel. It will be assumed that the operator buys diesel oil in bulk at 4s. 7+cl. a gal. and with an average rate of consumption of 12 m.p.g. the fuel cost per mile would be 4.65d. Lubricants add 0.30d.
Tyre costs incurred with tipper operation can vary considerably according to site conditions. In contrast to a tyre mileage life of around 30,000 when fitted to a comparable platform vehicle, a life of only 20,000 miles will be assumed here. As a result the tyre cost per mile would be 2.30d.
50 per cant increase Maintenance can vary substantially. A 50 per cent increase is allowed for here as compared with a standard vehicle, resulting in a maintenance cost per mile of 4.80d. As with any other type of operation, maintenance is closely linked with depreciation. Despite the increased allowance for maintenance the life of a tipper is still likely to be less than for most other types of vehicle and here it will be reckoned at 100,000 miles, giving a depreciation cost per mile of 2.94d.
The addition of these five items of running costs gives a total of 14.99d. a mile or £37 9s. 9d. a week when 600 miles are averaged.
The addition of standing costs and running costs gives a total operating cost for this 7-ton tipper of 23.39d. a mile or £58 9s. 6d. a week.
When the weekly mileage increases the operating cost per mile decreases and at 800 miles a week it becomes 21.29d. a mile, while at 1,000 miles a week it is reduced still further to 20.03d. a mile. While the term "ton-mile" should be used with reservation because it can imply conditions which do not exist, namely continuous fully loaded running, it can nevertheless facilitate comparisons when correctly applied. In this example the costs per ton mile when operating this 7 ton tipper at 600, 800 and 1,000 miles a week would be 3.40d., 3.10d. and 2.86d. respectively.
8-wheel tipper Dealing similarly with an 8-wheel tipper having a 15-ton load capacity, it will be assumed that the initial outlay involved is £5,500. Using the same procedure as before, the five items of standing cost per week would be: Licences £5 9s. 9d., wages £13 12s. 9d., rent and rates £1 Is. 3d., insurance £5 1 ls. 6d. and interest £8 5s.; total £34 Os. 3d. Likewise running costs per mile will be: Fuel 7.96d., lubricants 0.32d., tyres 5.50d., maintenance 6.82d. and depreciation 5.39d.
The total cost for the five items of running cost is therefore 25.99d. a mile or £64 19s. 6d. a week, still assuming an average of 600 miles a week. The addition of standing cost and running cost gives a total operating cost of 39.59d. a mile or £98 19s. 9d. a week.
Where a weekly mileage of 800 was averaged the operating cost per mile for this 15-ton load tipper would be reduced to 35.77d. or, at 1,000 miles a week, to 33.73d. The corresponding cost per ton-mile at 600, 800 and 1,000 miles a week would be 2.64d., 2.38d. or 2.25d. respectively.
Comparing the results obtained for the 7-tonner and the 15-tonner it will be seen that even when averaging 1,000 miles in a week the operating cost per ton mile for the 7-tonner is 2.86d. This is higher than the corresponding figure of 2.64d. when the 15-tonner is averaging only 600 miles a week.
But as quoted earlier ton mileage figures can be misleading if the implication of full loading in both cases is disregarded. Additionally, • of course, both terminal facilities and the rate of flow of traffic would have to be advantageous to the larger vehicles before its potentiality can be fully exploited.