PROBLEMS OF THE HAULIER AND CARRIER.
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Some Figures for Operating Costs and a Suggestion that it is Sometimes Feasible to Quote per Ton-mile.
TN an article of this series which appeared on page 1315 of the issue of The Commercial Motor for October 23rd, I referred to the use of the term tpnmile in connection with quotations for haulage contracts, and I dealt with one or two examples where itanight be possible to make practical use of this term in quoting for haulage contracts. In every case, as I pointed out, there was a snag which went a long way towards precluding the use of that term in a completely satisfactory manner.
A correspondent; referring in d letter to that article, brings to my notice conditions under which it may be practicable to make use of the term in that way. Indeed, he states that he actually does use it. I am going to deal with his view of the matter at some length, but would like first of all to Point out that this is such another, case as one which I quoted in the article in question as being capable of being dealt with in that way, one in which vehicles of widely varying capacity are to be used on the same contract.
• A Correspondent Who Uses the Ton-mile. . The letter is from a haulier who has several 24on petrol vehicles, one 30-cwt. machine and some 5-ton steam wagons. He has a• clientMe who appear to be mostly interested in coal and bricks, which this haulier' conveys for short distances; between pits and stations, or pits and canal for the coal, and between brickfields _ and station or canal for the bricks. The 30-cwt. machine appears to be mainly used for the carting of coal direct from. pit•to•constimer and, for this, the coal is already pat fin in bags When he receives it.
He. gives some useful .figures for, cost of operation, which are reproduced with this article and with which I propose to deal in several ways, first of all, naturally, in reference to this matter of ton-Mileage. In referring to the figures which are tabulated, I should state that I have deleted two lines of them as relating to conditions which were sufficiently removed from average to be regarded as unfair to the remainder. One of these deleted lines refers to the 2-ton lorry of make "
In the week during which these figures were compiled the vehicle concerned had only done 142 miles, whereas the..usual distance was well over .200, as can be seen. It had evidently been off duty for a couple of days in that week for some reason or ether, and
the resulting drop in mileage and corresponding increase in coat per mile were sufficient to justify exclusion. In the other case, which has to do with the 30-cwt. machine, the mileage for the week in question Was only 59 instead of upwards of 105, and a similar discrepancy in the figure for cost was accordingly evident. I will hark back to those two cases a little farther on.
Considerable Discrepancies Apparent.
Even with these exceptional figures removed there is present still a considerable divergence between one set of figures and another, and this is particularly noticeable in connection with those of the two makes of 2-ton vehicles, the second make, "B," costing much more per mile and per ten-mile than the other make, My correspondent informs me that he works the figures out on a weekly basis, calculating (1) the cost per ton, (2) the cost per mile, and (3) the cost per ton-mile. This is more or less apparent from the figures, He adds that when he is asked to quote for any job he gives -at figure per ton-mile, reserving to himself the option of choosing the vehicle which he will use.
In considering the figures, we must take those of the first 2-ton lorry, "A," as being in a class entirely different from those of the second, "8 " ; the reader will have already observed that the cost of operation is much less • in the first case than in the second. The reason for this is that the first one is mainly engaged on the conveyance• of coal which is already in, bags ready for shipment ; loading, in consequence, takes very little time; as does unloading. The second one is loaded by hand and 'works in a hilly. district. The is another reason for the high cost per mile, and that is the COM
paratively low weekly mileage. No doubt this is brought aboutby the Tact thai the vehicle takes sae much longer, to load than the other, so that the two reasons ate, as it were, one.
The Difficulty About Ton-mile Quotations.
Our interest lies in Something Which we are not told, namely, the figure which this haulier is accustomed to quote per ton-mile. In trying to get at this for ourselves, we are at once in difficulties and, as it is this sort of difficulty which must confront anyone who attempts to use the ton-mile as a basis for quotations, there is justification for dwelling on the subject at some length.
Looking down the figures for cost per ton-mile it is to be noted that tremendous differences are apparent. It is possible, at the same time, to realize why these differences arise, bat that is, according to ray reading of the matter, something apart from this question of quoting per ton-mile, for, if the ton-mile is to be of any use as a basis, it must be possible to use it for all quotations, without making any special stipulations or laying down conditions. For example, leaving out of the question for the moment the steam wagons, the lowest figure for cost per ton-mile is that arising from the use of the 2-tonner "A" The average is 11.14d. per ton-mile, so that, assuming as a rough-and-ready rule that the quotation should be approximately double the net cost of operation, it should be possible to quote is. MI. per ton-mile for this work and make a reasonable profit. On the other hand, the average cost per ton-mile with the other 2-tonner, "B," is slightly over is. 5d per ton-mile, and, to make this profitable, the owner would have to charge about 2s. 10€1. per tonmile, which is a shilling more than with the other vehicle. Again, the cost per ton-mile with the 30-cwt. machine is is, 100., involving a charge of 3s. 8161. per ton-mile. Now, what is to be done? If the conditions are such that it is possible to charge the top price for all the work that offers and still get the contracts, then, obviously,there is not much need for very accurate book-keeping. On the other, hand, if competition is keen and prices are finely cut, so that, wherever possible, the lowest economical .figure must be quoted, then, obviously, the thing to do is to quote the lowest price, namely, is. 1641. and make use of the vehicle to • which those figures apply. That, of course, is quite impracticable, since it is not so much the vehicle as the conditions which determine the cost. The low price named is only Dossilale when loading and unloading are easy and quick and when a mileage of upwards of 200 per week is feasible, so that the haulier, if he desires to quote his lowest ton-mile figure, must stipulate the conditions of loading as well as the type of vehicle. So soon as he does that he loses any advantage which the convenience of the ton-mile confers, and he might just as well quote a set figure per mile per 2-ton lorry and a set figure per mile for a 30-cwt. lorry and have done.
How Cost Per Mile and Per Ton-mile Compare.
Of course, in quoting rates per mile it is always essential to know what the weekly mileage is to be. How closely this affects the cost may at once be gathered by a reference to the two sets of figures for the two 2-ton lorries. When the first one, make "A," does 203 miles per week, its operating cost is 11161. per mile. When the second one does 204 miles a week its cost, too, comes down to Is. per mile, and that notwithstanding the fact that it is working in more difficult country than the other one.
If we turn to the steam wagon cost we find an even greater difference in the cost per ton-mile. With a wagon doing 101 oiiles a week and costing 3s. 3.461. per mile, the cost per ton-mile is only 7.9d., this being the lowest figure in the whole schedule. The highest cost per ton-mile with a steam wagon is only is. 2.Sd., and that is for a cost per mile of 6s. 1.5d., the vehicle only doing 55 miles per week. This emphasizes what I have always stated-that the cost per ton-mile grows less as the capacity of the vehicle employed increases. Further exemplification of this is apparent in the ease of the 30-cwt. lorry, the smallest of the range, in which the Cost per ton-mile goes up to as much as 2s. 161., the
• highest in the table.
The conclusion to which we must inevitably come is that it is only safe to quote on the ton-mile as a basis when the conditions are uniform. When that is the ease it is just as easy to quote on any other basis, so that even then there is no advantage in employing the ton-mile as a basis for quotation, and, really, I come back to where I was when I started and must repeat what I have stated, that the ton-mile as a unit for calculation is of very little use to the haulier and carrier. S.T.R.