HINTS FOR HAULIERS.
Page 23
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An Occasional Chat on Subjects and Problems of Interest to those Who are Engaged, or About to be Engaged, in Running Commercial Vehicles for a Living.
ACORRESPONDENT writes asking what will be the running cost of a 28-seater char-a-bancs and what he should charge per mile for its hire. He will find a statement of the cost of working on page 890 of the issue of this journal for February 15th. The running cost is there given as 13.62d. per mile and the standing charges, including the new licence duty, 2346d. per week. On a basis of 240 miles per week, this works out, in round figures, at 2s. per mile working cost ; at 480 miles per week, the corresponding figure would be is. eid. per mile. It is more than likely that our friend's mileage would be somewhere in the neighbourhood of the lesser of these figures. At least, that will be the case if he takes the average throughout the year. His bare working cost, therefore, we may take as being 2s. per mile. My correspondent naively asks what he should charge in order to obtain the usual profit! I should not like to attempt to answer that question as it stands, but would tell him that he should see a return of 4s. for every mile .run by the vehicle ; out of that, quite a small proportion will be really profit, the actual amount depending upon (a) his office and establishment expenses, and (b) what lasses he suffers throughout the year from breakage of contracts on either side.
Maintenance.
Another c rrespondent, who wishes to be known as " Inqui 'r,' is wishful of undertaking maintenance, by intract, of various types of commercial vehicle. He specifically mentions the Ford, 4-ton commercial elides, steam wagons, and hackney carriages. e wants to know full particulars of running cost mi how to go &emit the business. As regards running costs, I must refer him to pages 729 and 730 of The Commercial Motor for January 11th and ah. to page 890 of the issue for February 15th and p e 15 of the issue for February 22nd. It is usual to undertake. contracts for maintenance on the,milea e basis. In order to obtain the mileage accurately, hub of each vehicle is usually fitted with a hub h dometer. Of the running costs which he will find in •etail in the three issues of this paper to which I hay: referred, the item entitled maintenance will natural' interest him most, and, in connection with that, d his proper charges for contract maintenance, it I again necessary to draw attention to the clifferenc between the cost of anything first-hand and the sell' g price of it when the vendor has to make a livi g out of it The maintenance, for example of 4 ton lorry is approximately 2.7(1. per mile ; that, however, is the cost to the owner ; it is very far from being the cost at which a, contractor could guarantee to keep machines in working order. He will have to find all the essentials in the way of spare parts, cleaning materials, etc., and on to that cost will have to add his establishment charges and a fair percentage of profit.
About Fair Charges.
A fortnight ago, by assuming certain contracts, I showed how difficult it was to arrive at a fair meThod of assessing charges in connection with the hire of motor lorries.
I think I made it quite clear that it was impossible to base these charges either solely on time, or entirely according to mileage. If we consider time alone, then the man who covers a big mileage in a day hite the advantage of him who keeps the lorry standing for most of the time, while if we charge according to mileage only, then the haulage centrautor himself is going to lose considerably if he is running many contracts with clients who only cover small mileages.
I pointed out that one way out of the difficulty was to assess these charges in a manner similar to that automatically effected by the taximeter on a motor cab ; this charges according to time or mileage— whichever may he the greater—the charge being 6s. per hour or is. per mile, so that the cab which only -covers five miles in an hour would cost 68. for hire being charged according to time, but, if it covered seven miles or more, would cost 7s. or more, according to the actual mileage covered. This is really a fair method of charging, but, in the case of ordinary hire work, it frequently leads to disputes owing to differences of opinion on the mileage which ought to be covered in an hour, and I have therefore devised a scheme, to which I have already made reference in these columns, of charging a fixed rate for time and adding on to it the charge per mile.
Referring back to the article which Appeared on March 1st, it is apparent that the establishment and contingent expenses of the haulier may reasonably be set down as a standing charge, since they need not necessarily vary with the mileage. The establishment charges themselves naturally vary, not only according to the situation of the haulier himself, but according to the number of vehicles which he owns. With several machines, the establishment charges, being spread over a greater number, might naturally be expected to be less per vehicle mile. The total, however, increases considerably as the fleet enlarges, -so that it is not very much more economical to own a big fleet. The average figure would be 24 10s. per week per vehicle. For contingencies—insurance against damages for broken contracts, cost of dead mileage—another 23 per week must he reckoned on. If we therefore assume the maximum profit to be 24 10s. per week per vehicle, this brings external " standing charges—that is to say, the standing charges apart from those directly concerned with the working of the vehicle itself—to £12 a week. Assuming, again, a 4 ton lorry there is the actual standing charge of £7 5s. a.week, so that altogether there is 119 5s. to be made each week, including profit, even if the lorry does not actually run on any contract. From, this we can calculate our charge • per hour, assuming 'a 48-hour week: It works out, in -round figures, at 8s.
The running cost of a 4 ton lorry. is 13.91d. If is. 2d. per mile be charged in addition to the time rate, there will be a profit of a little more than a penny per mile over and above that which is already covered in the time rate. This, therefore, fixes our charge for a 4-ton lorry at 8s. pef hour, pins Is. 3d. per mile for every mile ran. Now let us apply this Method to the four cases given a fortnight ago.
. If we assume a, 9-haur day, (five 9-hour days and 3 hours on Saturday total 48), then the charge to A will be, for 160 miles in two days: 18 hours at 88., 21 4s. plus 160 miles at 1s. ad., '217 4s. in .all. Previously, we found if we charged him according to mileage alone' he would have to pay 220 6s. 4d. and on time only 213. We agreed that the first charge was too high and the last too Tow, so that by this new scheme we have presumably struck the happy medium.
13. had the lorry for two days, and only ran eight miles. The charge to him would .be 27 4. for the two days and 10s. for the eight miles, making a total of 27 14s., whereas, previously, on the Mileage charge, it was 21 Os. 8d. and on the time charge .213. C.'s bill for 100 miles in a day would be 19 17s., and D.'s for eight miles in a day 24 2s. THE SKOTCH.