Can Owner Drivers Cut Maintenance Costs?
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Analysis of Items Shows that an Owner-driver Cannot Save Much by Doing Maintenance Himself at Weekends
LAST week I raised the point that owner-drivers, besides ignoring wages as an item of costs, were also able to tower their costs still further by carrying out maintenance at weekends. Thus they are apparently able to cut rates and still make a profit, as against the fleet owner who, for obvious reasons, must include provision for drivers' wages and for the cost of maintenance.
I set out a series of maintenance operations and estimated what each would cost, promising to tabulate the items and costs in such a manner as to enable the cost per mile to be ascertained. In the list of operations I included oiling and greasing, brake adjustment, crankcase replenishment, gearbox and rear-axle replenishment, decarbonizing and a minor overhaul, which I treated as an engine overhaul, washing and polishing, brake refacing and sundries. I omitted reference to a major overhaul and provision for wheel alignment.
The figures in Table I give information concerning all the items, including those two. The costs are broken down to a figure per mile, thus enabling comparisons to be made with other assessments of this important item of operating costs. An interesting point which arises is the relative importance of what. is almost the cheapest of these items—" washing and polishing," at 10s. per occasion. It is found to be as expensive as any when reduced to a cost per mile.
The total cost of about I.7d. per mile compares with I.87d. in " ' The Commercial Motor ' Tables of Operating Costs." The difference of 0.17d. per mile is explained by the fact that the figures in the Tables are averages.
Fit Reconditioned Engine
Not a great deal can be done to reduce maintenance costs. In proof, I need refer only to the item "sundries," of which not a penny can be saved unless the vehicle is starved of necessary fittings and supplies. The owner-drier can admittedly save on greasing and oiling, brake adjustment, replenishment of the oil in the crankcase and so on, and on decarbonizing. On the minor overhaul the most economical method is to fit a reconditioned engine (prices are low) and by fitting it himself he win save a little as against the cost of having it fitted.
There are further items of expense which can be cut down, but the amounts are problematical. I would not like to commit myself to a figure. Really, the saving will not be an actual economy, for it would certainly pay the haulier to have his overhauls properly cxecuttd by a reliable concern while he devotes himself to calling on his customers and thus keep the good will which he must have if he is to succeed_ On the whole, it is fair to assume that the idea that big cuts in haulage rates are possible by an ownerdriver who looks after his vehicle himself is erroneous.
e24 Before leaving this subject I should like to deal with it in another way. There is a wide difference between the amounts debited against maintenance according to the views of operators. Incidentally, the difference is usually greater when the figures come from a haulier who keeps records of his expenditure rather from those who rely on surmise.
In the Tables the total provision for maintenance (d) and maintenance (c) is, in the case of a 5-tonner running 400 miles per week, 1.87d. per mile. That is equivalent to £3 15s. per week, which may seem somewhat high and cause inexperienced operators to doubt the figures in the Tables.
The figures in the accompanying Table II should dispel some of these doubts, but I am now going to refer to a set of figures for maintenance costs given to me by a reader who has been very helpful from time to time and whose figures for costs are reliable.
Taken From Records
As it first came to me, the information was not so easily recorded as it might seem to be by reference to Table II, in which actual costs are set down. The amounts and the mileage intervals were extracted from his cost records and although I have not made any material alteration to his figures, I have rearranged the items a little to make them more easily understood. These figures are fairly close to the average amounts which a small operator has to find in order to keep his vehicle in good mechanical order, as well as presentable in appearance.
I should like to show how I arrive at the amounts in the column headed, "Cost per 1,000 miles," in Table H. I will take the item "decarbonize, etc.." as an example. In the case of this operator the average mileage covered between one top overhaul and the next is 5,000. Its cost is stated to be £2 10s. I would remark that the need for decarbonizing is not usually so pressing; many operators reckon that twice that distance is a minimum. Nor is the cost (£2 10s.) what I would have expected. That, however, is beside the point.
The point which I would like the reader to grasp is that, so far as my friend's vehicles are concerned, he prefers to decarbonize at intervals of 5,000 miles and may economize in expenditure by doinesome of the work himself.
To obtain an appropriate figure to put in the last column I divide the amount per 5,000 miles by five, which gives me 10s. All the items have been treated that way and the result., £7 10s. per 1,000 miles, is a fair amount to debit against maintenance. It is equivalent to I.80d. per mile, which is not very different from I.87d.—the sum in "'The Commercial Motor Tables of Operating Costs."
I think fewer hauliers would do their own repairs if they could be assured of effective co-operation from local garages. Hauliers say that repairers are reluctant to carry out work at night or during the week-end. Operators who do their own maintenance make such provision so that their vehicles can be kept on the road during working hours. Moreover, the average haulier thinks that the average agent does too little, does that little badly, and charges too much for it.
Repairers reply that if they do too little, it is because they do only what they are asked. They know from experience that if instructions are exceeded there will be difficulty about the charge. The complaint that work is done 'badly often arises from this reluctant attitude. The repairer is aware that more needs to be done, or, indeed, must be done if the work actually executed is to be worth while. He does not dare to do it for fear of incurring the customer's displeasure.
There is no doubt that many hauliers skimp maintenance and spend as little as possible on it, whether they do the work themselves or put it out. If hauliers did not cut rates they could afford to put aside fair amounts for vehicle service. It has been said by one repairer of note that the essence of the matter is the haulier's reluctance to keep records of operating costs. If he were to make costings a preliminary to assessing rates, he would appreciate that his charges must cover maintenance expenses.
There is a vicious circle in this matter. If hauliers think that the repairer's charges arc excessive and do their best to carry out their service work themselves, the agents who have invested large capital sums in their businesses will have to increase their charges to the depleted number of customers who remain. On the other hand, repairers who are given a steady and sufficient flow of work from hauliers around them will do it better and cheaper than can the hauliers themselves.
An important factor in considering whether a haulier should do his own service is the number of vehicles in his fleet. There can be no maintenance department for fewer than a dozen vehicles and I doubt whether it is worth while for even 20. When hauliers set up service departments for 10-20 vehicles, it seems to indicate lack of knowledge of the expenditure involved in proper premises and equipment.
'Thousands of pounds are required. Skilled mechanics— electricians, bodybuilders and tyre experts—must be employed. Stores must be provided, with an investment in spares, and a competent storekeeper to look after them. The expense is worth while only if there is sufficient work all the year round to keep them fully employed.
Another point arises. It is not in the haulier's interest as a carrier to take his vehicles into the repair shop if it can be avoided. As a haulier he is concerned with keeping hia vehicles on the road, earning money—including profit, we hope. In that capacity his requirements conflict with those of the repairer. This surely indicates that the best policy is for the small haulier to confine himself to transport and to employ an outside expert to look after his vehicles. S.I.R.