1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136 
Matching cost to customer requirements
Page 84
Page 85
If you've noticed an error in this article please click here to report it so we can fix it.
The comparative operating costs of a 5-tonner with either platform or van body are examined here
COSTING of commercial vehicle operation is receiving increasing attention for several reasons. The first report of the Prices and Incomes Board stressed the need for greater accountability in the road transport industry and the stricter control of vehicle inspection and maintenance now legally required will compel operators to look more closely at their operating costs and, in particular the items of maintenance and depreciation.
On the traffic side of operation the advent of the Freightliner services is compelling long-distance operators at least to reexamine the division between the cost of collection and delivery and trunk hauls. Allied to this is the growing use of the container, quite apart from its special use as part of the Freightliner service.
Likewise the savings which can be achieved by the use of containers by consortiums of shipping companies have received wide publicity; so has the need for co-operation in such schemes by hauliers performing the collection and delivery services.
Drive towards efficiency
Overall, therefore, there has seldom been a period when, outwardly at least, there has been such a drive towards greater efficiency in all forms of freight transport. And if this objective is achieved it will be all to the good.
Efficiency, however, can mean different things to different parties. Particularly does this apply to a service industry such as road transport where the end product cannot always be measured by a common yardstick.
Obviously the basic requirement of collecting goods and conveying them to the point of destination as prescribed by the customer must always be met. But superimposed on this simple need will be a number of additional requirements peculiar to each particular flow of traffic.
High on most customers' lists will be both speed and reliability of delivery because even the occasional lapse cannot be tolerated by highly geared manufacturing industries.
Increasingly, too, customers of, transport operators are demanding better protection for their goods. At the same time they want the cost of packing to be reduced to a minimum if not eliminated altogether.
• All these additional requirements—and many others—can and have been provided by road, transport operators. Indeed, to a large measure the success of road transport has been due to this ability to meet customers' demands—exacting though they might be.
Having met all these demands it could rightly he claimed that the operator was carrying out his work efficiently from the customer's point of view. But purely from the standpoint of transport considered in isolation the ability to meet customers' requirements could result in a less efficient service if the yardstick used was solely cost per ton mile.
Cheese-paring is commonly associated with the introduction of costing systems. But it should not be overlooked that adequate costings are also required, and even more so, when greater expenditure is envisaged.
Such an occasion can arise when an operator's customer makes a stipulation which would necessitate the use of a more expensive type of vehicle than that hitherto employed. Not only will the initial outlay be greater but so will the operating cost.
In this context it is noteworthy that there are already a surprisingly high percentage of vehicles with other than the standard and competitively priced platform body. In round figures (and ignoring about irri small vans not normally employed by hauliers for movement of goods) about two-thirds of the remaining 1m goods vehicles have other than platform bodies.
In certain flows of traffic such as liquids in bulk or frozen foods the product itself dictates that a specific type of body must be used with little or no choice to be made by the operator other than as to the specification and supplier.
A different situation, however, can arise as between a platform vehicle and box van. With certain types of cartoned or parcels traffic both types of body are used with apparent satisfaction. But where an operator has previously used a platform vehicle to move such traffic and was then asked by his customer to provide a van bodied vehicle his alternative quotation would obviously have to be based on sound costing if the new venture was to prove possible.
An example
As an example of just such a comparison the operating cost of a 5-tonner with either platform or van body is now given. In both cases an average of 600 miles a week is assumed.
Dealing first with the platformed-bodied vehicle, it is reckoned that the initial outlay on the five-tonner would be £1,300. With an unladen weight of 2 tons 17cwt the annual licence duty incurred would be £63, the equivalent of 27s a week.
This latter calculation, as it applies to the other four items of standing cost, is based on a 48-week year to allow for four weeks when the vehicle is not available for service due to maintenance, repairs or driver's holidays. A minor adjustment is also made to include the proportional cost of the carrier's licence fees.
A basic amount of £13 7s is allowed in respect of drivers' wages inclusive of insurance contributions and an adjustment for holidays with pay. But in most cases it is recognized that additions appropriate to individual circumstances over and above the amount paid for a 40-hour week. This however does not invalidate the comparison of costs between the two vehicles. Rent and rates in respect of garaging the vehicle are reckoned as equivalent to 28s a week. Comprehensive vehicle insurance in a medium risk area providing comprehensive cover is estimated to cost £106 17s or 44s 6d a week.
Interest charged at 7-1per cent on the initial outlay amounts to 40s 6d a week. The total for these five items of standing cost is therefore £20 7s.
Fuel is assumed to be purchased in bulk at 4s 1 lid a gallon. Based on a consumption of 18 mpg this gives a fuel cost per mile of 3.32d. Lubricants add 0.27d and tyres 1.31d assuming a mileage life per set of 30,000.
Maintenance inclusive of washing, servicing and repairs is reckoned to cost 2.73d and depreciation 1.61d. The addition of these five items of running cost therefore amounts to 9.24d. The addition of standing costs and running costs give a total operation cost of 17.38d mile or £43 9s a week.
When the corresponding 5-ton chassis is fitted with a van body the initial outlay is reckoned to be £2,355. The unladen rate is now 3 tons 14cwt with a resulting annual licence duty of £83 5s, the equivalent of £1 5s 6d a week.
Wages and rent and rates are the same as before but because of the higher value of the van body, the insurance premium is now £120 6s a year or £2 lOs a week.
Interest charge at 7iper cent on the initial outlay of £2,355 amounts to the equivalent of 13 13s 6d a week. The addition of the five items of standing costs gives a total of £22 14s a week or 9.08d a mile when averaging 600 miles a week.
Dealing similarly with the five items of running costs the rate of fuel consumption is now reckoned at 16 mpg because of the van body. This results in a fuel cost per mile of 3.73d.
Lubricants add 0.28d a mile to the running costs while tyres remain the same at 1.31d per mile.
Because of the van body, maintenance is now reckoned to cost 3.30d a mile. However maintenance costs in relation to a van body vehicle could vary between operators more than with a standard platform version.
Additional expense
This is because the importance of maintaining the appearance of a van bodied vehicle might be such as to justify some additional expense on that score alone which would not apply—at least not to the same extent—as with a sheeted load.
Likewise the very use of a van body for certain flows of traffic implies a need to provide a higher standard of protection to the goods carried than is obtainable with a platform vehicle. Here again the highest standard of maintenance will be required to keep the vehicle as near as possible in its original condition.
Because of the higher initial outlay, the cost of the depreciation as compared with the platform vehicle is increased to 3.13d. The addition of the five items of running costs gives a total of 11.75d a mile or £29 7s 6d a week.
The addition of standing costs and running costs give a total operating cost of 20.83d a mile or £52 1 s 6d a week for this 5-tonner when fitted with van body.
Before making a comparison of the operating costs it is recognized that some addition should be made to those appertaining to the platform vehicle in respect of lorry sheets. But because the costs could vary substantially according to the requirements of a particular row of traffic both as regards possible double sheeting and exceptional wear and tear, no attempt is made to provide a compromise figure here. Nevertheless due allowance will have to be made for this additional item to meet individual cases.
Although the composite term of ton-mile should 'always be used with discretion if wrong conclusions are not to be drawn, it can be used to advantage here.
Versatile
One of the benefits of the platform vehicle is its versatility which is especially important in an industry which has based much of its success on the flexible service it can offer. This applies particularly to return loads when van bodies are not always suitable for collection of goods at some loading points. Just what reduction in overall efficiency would result from this is obviously not quantifiable as a general average but nevertheless some allowance has to be made for this possibility.
When fully loaded the 5-ton platform vehicle with an operating cost per mile of 17.38d gives a cost per ton mile of 3.48d. Desirable though it may be 100 per cent loading cannot always be achieved and an average of 4-ton loading, say 5 tons outward and 3 tons on the return gives an overall ton mile figure of 4.34d.
The corresponding ton-mile figures for the 5-tonner when fitted with a van body are: 5 tons-4.1Id; 4 tons-5.13d.
But because of possible difficulties as regards collecting back loads with the van body the overall loading figure of the van version is likely to be lower than that of the platform vehicle. Therefore if an average of 4 tons was assumed for platform vehicle (i.e. 4.34d per ton mile), then a lower figure might have to be accepted for the van body, say 3 tons giving a ton-mile figure of 6.83d.
A further complication to this comparison .is the possibility that the customer requiring the van body vehicle may well be in a position to provide full loads for the outward journeys as he may have done previously for a platform vehicle. From his point of view, therefore, he would still be offering the operator the same amount of traffic, but the operator may well have to accept the fact that a lower average tonnage will be moved on return journey and make allowance accordingly when estimating the costs and charges.