Problems of the
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HAULIER and CARRIER QUWE recently (en page 127 of our issue dated September 9) I disclosed the gist of a conversation with a haulier Who had made a success of parcels carrying. Now, this is a phase Of the haulage business which interests a large number of readers. Perusing my records, I find plenty of evidence of that in the way of inquiries relating to the subject, but hardly two of the inquiries are alike.
For instance, the article above named dealt with the operations of a man who definitely assured me that his radius of action was no more than three miles. He was in the habit of accepting parcels for delivery outside that radius, but, invariably, he handed them over to another organization for distribution.
Compare that with the present inquiry, which, as the accompanying map shows, relates to a route covering 112 miles from end to end:
It is just possible, by the way, that the basis of the success of the other inquirer, the man with the limit of three miles, was his fixed determination to lind all his business within the circumference of that small circle and to keep to it. He was thus able to concen
trate and build up a good business without wasting much time and mileage in searching for work.
It is certainly a fact that he had established a goodwill of considerable value. His customer knew him to be regular and reliable, and, in consequence, preferred his services to those of competitors, notwithstanding that they might offer to do the work for less money. That is a bull point.
The other man, whose problem is before me to-day, may be equally successful, but there is no denying the fact that he is taking a bigger risk. To plan a service such as is suggested here needs pluck and enterprise, because it is obviously more difficult to establish goodwill over a route 112 miles long than within an area bounded by a circle of three miles radius.
Customers must be more difficult to find, and I should imagine that the prospect of regular consignments from those clients, when found, cannot be quite so bright. 1 am, however, by no means certain to be correct in that assumption. In any event, it is reasonable to assume that, before the inquiry reached me, some preliminary investigation had been made, to ascertain that the prospects are sufficient to justify devoting time and trouble to detailing a plan of action. My help is asked, as is usual, in reference to assessing the charges.
An Ambitious Project.
The preliminary work is simple. The vehicle to be employed is a 2-tonner. I am advised that the proprietor proposes to cover the ground and return each day (that seems to me to be an ambitious project, having in mind the delays inseparable from parcels collection and delivery services). If, however, he persists, the weekly mileage will be about 1,240, and the total operating cost should be about 4.55d. per mile, which is equivalent to 14 10s. per round trip, or 122 10s. per week.
One of the drawbacks to a route such as this is the expenditure which it involves in advertising. Actually the establishment charges relating to this job will, in the main, be of two kinds: advertising and commissions. 'Commissions will vary with the success of the business and may more conveniently be dealt with independently, after a scale of charges, less commissions, has been calculated.
So far as advertising is concerned, there appears -to be some difference of opinion, even amongst the experts. Some recommend the trader to spend plenty 3341 of money on advertising when business is bad, giving him liberty to diminish his expenditure in that direction when it improves. Others take the contrary view, and recommend expenditure in proportion to the volume of business which is being experienced.
My own view resembles that of the old lady, concerning the use of umbrellas, when she told her son that be should always take his umbrella when it was fine: when it was raining, he could use his discretion. In other words, when business is good, advertise; when it is bad, please yourself.
From the appearance of the map, this route probably penetrates three districts, served accordingly by three pairs of local newspapers (every local newspaper has at least one " opposite " number, hence the "pairs"). It will be advisable to advertise regularly in each one of the six. That will cost altogether not less than 30s. per week.
The periodical preparation and distribution of handbills relating to the service will cost, on the average, about 5s. per week. These expenses are in addition to sundry overheads inseparable from the operation of the business, which will total at least 10s. per week. The inquirer must expect to spend £2 10s. per week on obtaining business and retaining it.
Three pounds per week seems a small net profit in the face of the foregoing expenditure, but it is convenient to take a minimum for the purposes of this calculation. The total revenue must, therefore, amount to £28 per week. That is equivalent to £2 16s. per trip (each way), which is exactly 6d. per mile. If, therefore, it were possible to estimate on the basis of this 2-ton lorry being fully loaded for the full distance each way, a basic rate of 3d. per ton per mile would be sufficient, but for the addition of agency commissions. That is 3-20d. per cwt.
Applying this to the various distances indicated on the map, it is clear that from A to B the rate will be 2id. per cwt., from B to C 41d., from C to D 21(1., from D to E lid., from E to F lid., from 11' to G and from G to H 2td., and so on, according to the distance. The rate per cwt. for any journey can be calculated by multiplying the distance by 3-20d.
Take, for example, a parcel of 4 cwt. to be carried B42 from B to F, 54 miles. The rate is 54 times 3-20(.1., which, as near as makes no matter, is 8d. per cwt., and the charge would be 2s. 8d. This rate, it should be noted, is equivalent to no more than 2d. for a parcel weighing 28 lb. to be conveyed 54 miles.
Now, charges for the collection and delivery of parcels are invariably much more than the foregoing. In the article to which I have already referred, the minimum was 4d. for a parcel weighing up to 28 lb. There are several reasons for this and, as I disclose them, I shall indicate corresponding reasons for modifying accordingly the foregoing basic scale of charges. In the first place, I have calculated on the vehicle being consistently loaded to capacity. That, of course, whilst an ideal state of affairs, is extremely rarely experienced. If, now, I take it as a basis that the vehicle is only half loaded, the rate is immediately doubled.
Nor is that all. It is perfectly obvious that this particular haulier is going to have his work cut out to complete the round journey in a day. He is going, therefore, to be at a disadvantage if his load consists of a large number of small parcels, and some modification of the rate is advisable in order to encourage senders to increase their individual consignments. S.T.R. (To be continued.)