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Do You Know the Meaning of
Page 120
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Ton-Mileage?
Some Figures Which Are of Interest to the Ancillary User and to Many Hauliers, Too
By S.T,R.
TiANSLATION of figures for cost of operation into slme form in which they will be of the most practical use to the owner, ancillary user or haulier, is not so easy, nor is the method so obvious as might be thought. Correct figures of cost are seldom kept, especially if, as is most desirable, costs of operation per vehicle are to be used. In these circumstances, The Commercial Motor Tables of Operating Costs can be employed with advantage.
No matter what be the size of vehicle or what the type, appropriate figures are there and can he utilized. Sometimes a little modification of these figures is required, according to circumstances—as, for example, to suit such a case as the following:—An ancillary user who is principally engaged in making deliveries over a comparatively limited radius, uses 7-8-ton vehicle& The weekly mileage is low—generally about 200—but the work is such that obsolescence in respect of the vehicle is not a matter-of great consequence. Two men are regularly employed on the vehicle and wages a little higher than those quoted in The Commerczal Motor Tables are paid.
The standing charges, according to the Tables, total £6 10s. per week and the running costs 7.40d. per mile. Modification of the standing charges, in order to allow for the difference in wage scale and for the extra man, brings the £6 10s. up to £10 3s. A slight reduction in the figure For depreciation, because of the absence of need to allow For obsolescence, brings that down to 7.32d. Overhead costs are such that each vehicle must bear £1 per week. From this, we have the resulting figures of £11 3s. per week fixed costs and 7.32d. per mile running costs.
These two, the fixed charges and the running costs, must of course be combined, in order to arrive at a total for the operating cost.
• Annual Cost a Practical Figure. • Perhaps the most practical figure, and the one that is most useful from an all-round aspect, is the total cost per annum. On the basis of an annual mileage of 10,000, that cost is £884 16s. If the annual mileage be 15,000 and if, for the sake of simplicity, I ignore the fact that as the weekly mileage increases there is a slight diminution in the running costs per mile, then the total is £1,037 6s. and if the mileage be 20,000 per annum it is £1,189 16s. A point worthy of note is that, whereas the cost of 10,000 miles is £884 16s. the cost of twice that mileage is only £1,189 16s.
For some purposes it is convenient to know what is the actual cost per mile. With the above figures available, the quickest way of arriving at this is by a simple process of division, which gives us the following: at 10,000 miles per annum, 21.24d. per mile; at 15,000 miles, 16.60d.; at 20,000 miles, 14.28d. per mile. These figures are essential for what is to follow.
Another way in which comparison of cost can be made, is in respect of the cost per parcel, per cwt. or per ton. If the operator be interested in the annual tonnage, then if this happens to be, say, 2,400, the costs per ton (assuming that the tonnage conveyed be unaffected by the annual mileage) as 7s. 44d., 8s. 7fd. and 10s. Ild. respectively.
The assumption that tonnage remains the same while the mileage fluctuates is not, of course, one which can always be made. It applies only if that mileage be proportional to the radius of operation, in which case the vehicle makes the same number of journeys per week, but each journey is longer. If the extra mileage be the outcome of some improvement in efficiency of operation, making it easier to expedite delivery so that a vehicle makes more than one journey per day, then the tonnage will increase with the .mileage, although not, perhaps, in the same proportion.
s18 Figures which experience has shown to he likely in this connection are: 2,400 tons per annum per 10,000 miles; 3,000 tons per annum per 15,000 miles and 3,600 tons per annum per 20,000 miles.
In those circumstances, the costs per ton will be 7s. 41d., 6s. 11d., and 6s. 7.3d. respectively. These figures show how improved efficiency in deliveries reduces cost per ton.
Actually, there is considerable difficulty in reducing the cost to a basic unit which can usefully be employed for purposes of comparison. The ton-mile is a favourite, but is rarely understood. Theoretically it is the cost of carrying one ton over one mile. In the majority of cases tonmileage cost, as applied, is a long way from being accurate in accordance with the theoretical meaning of the term. The most popular method is to take what might, for want of a better term, be called gross ton-mileage, as in the following example. Assume that a vehicle makes a round journey of 40 miles, carrying for some of the journey at least 8 tons of goods, then the ton-mileage is taken to be eight times 40, or 320.
• Popular Idea of Ton-mileage. • This method is often applied to conditions under which the vehicle starts from the factory or warehouse with the full load of 8 tons and begins to make calls fairly soon, the journey being, roughly, a circular one, and the last delivery not being made until the vehicle has nearly returned to headquarters.
If the 40-mile journey be, in effect, a day's work, which it would be on the basis of a 200-mile week or a 10,000 mile year then, taking the cost per mile as indicated above, namely, 21.24d., the cost of the journey is £3 10s. 9.6d. and the cost per ton-mile is 2.655d. Now, if I assume that the vehicle covers 20,000 miles per annum (and, in the first instance, I take it that those conditions prevail which I have already described, namely, that the tonnage per annum remains unaffected by the annual mileage) then the figures for an average day's work will be: mileage 80, tonnage 8, so that the ton-mileage is 640. The total cost, at 14.28d. per mile, is £4 15s. 2.4d. and the cost per ton-mile is thus 2.095d. .
Supposing, however, that the cqnditions, be those alternative to the above—namely, those in which improved efficiency enables the vehicle to do two journeys per day. The daily mileage is 80 and the load carried each journey is 8 tons. The total ton-mileage is thus the same as before, namely, 640, and the 'cost per ton-mile remains unaffected.
The assessment of ton-mileage, on an accurate basis, is a complicated matter in relation to that common type of journey in which the vehicle starts with a full load which is gradually diminished as the journey proceeds.
To indicate the only method of arriving at an accurate figure, assume the following example: A vehicle sets out from headquarters fully loaded to 8 tons. It makes calls at 12 points, say. A to L, distant from headquarters as respectively 2, 5, 8, 10, 12, 15, 18, 23, 29, 33; 36, 38 miles and makes deliveries as follow (in hundredweights): 8, 12, 12, 8, 8, 12, 12, 20, 24, 16, 12, 16.
The actual ton-mileage must be calculated from point to point as follows: From start to A, 8 tons by 2 miles: total 16 ton-miles. At A, the load is diminished by 8 clArt. so that only 7.6 tons are left. From A to B then, the tonnage carried is 7.6 the mileage three and the ton-mileage the product of thosetwo numbers, namely, 22.8 ton-miles. If by simple calculation these figures areset out for the whole journey, the ton-mileage is shown to be 173.4. This may be compared with the gross figure _assumed as being 8 tons by 40 miles, namely, 320 ton-miles.