Economic Depot Transport
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kREADER states that he finds the use of old vehicles for inter-depot transport unreliable and expensive. Moreover, they are not entirely suitable for the work ey have to perform and he is considering acquiring small ticulated vehicles to take their place. Although he has a Eeable fleet engaged on medium and long distance journeys. : states he has no previous experience of this specialized type ' vehicle and asks for likely operating costs, when fitted with
ther petrol or oil engine. , In the relatively limited field for such vehicles an average ice for a petrol-engined 3-ton tractive unit and trailer would !. around £1,287. The combined unladen weight is reckoned . 3 tons 5 cwt., with a resulting annual licence duty of 4610s. This is equivalent to a standing cost per week of I Os. 3d, The total cost of wages to the employer is £10 Os. 6d. ased on the current Road Haulage Wages Regulations for a Z-hour week. Appropriate additions are made for contribuons to National Insurance and employer's voluntary liability isurance together with an adjustment for holidays with pay. It will be assumed that some covered accommodation is rovided for the vehicle when not in service and that the anding cost per week in respect of rent and rates for garaging mounts to 12s. 4d. Comprehensive insurance, assuming the ehicle is based in a medium risk area, incurs an annual remium of £90 18s., 'or £1 165. 4d. per week.
[NTEREST charged at a nominal rate of five per cent. on the ital outlay of £1,287 amounts to the equivalent of £1 5s. 9d.
week. The total for these five items of standing costs thus mounts to '£14 15s. 2d., or 84.33d. per hour, assuming a 2-hour week, This latter figure is particularly useful in calcuating the cost of internal transport when time, rather than aileage, is the major factor in costing.
The existing inter-depot arrangements have so far been somevhat haphazard, the reader states, being undertaken by whatver vehicle it was opportune to employ for short periods. He s therefore not aware of the total mileage which a single vehicle might average when employed exclusively on this work. 3ut from experience elsewhere, it is likely to be a much lower igure than will apply in other forms of operation, and it will herefore be assumed here to average 100 miles a week, or ZO miles a day on the basis of a five-day week.
Having assumed this low average mileage, it will be reasonable to expect fuel consumption of the petrol-engine version to be higher than usual. With petrol purchased in bulk at 4s. Id. a gallon and a basic rate of fuel consumption of 12 m.p.g. normally maintained, the addition of 20 per cent. to allow for a higher proportion of stop and start work, gives a final fuel cost per mile of 4.90d. The cost of lubricants is reckoned at 0.24d, per mile. The outlay on a set of tyres is put at £122, and with an anticipated mileage life of 30,000. tyre cost per mile becomes 0.98d. Depreciation is calculated on a mileage basis, namely I.82d. a mile. The amount to be written off is obtained by first deducting the equivalent cost of the original set of tyres from the initial price, followed by a further deduction to allow ultimately for the respective residual values of both tractive unit and trailer. A mileage life of 150,000 is assumed for the outfit, and because of the exceptionally low average mileage, an allowance is made for obsolescence.
The total for the five items of running costs is therefore 11.40d. which, when added to the standing costs, results in a total operating cost of 46.82d. per mile, or £19 10s, per week.
AN average initial cost for the oil-engined version of this 3-ton articulated vehicle would be around £1,066 and the unladen ..weight would be slightly higher, say 3 tons 7 cwt. This brings the vehicle into the next higher category for licensing purposes, with an increase in the standing cost to £1 2s, Id. a week. Wages, rent and rates remain. the same at°£10 Os. 6d. and I2s. 4d. per week respectively, but insurance is increased
slightly to 16s. I Id. a week because of the higher initial cost. Similarly, interest charges now amount to LI 7s. 11d, a week. Total standing cost is therefore increased to £14 19s. 9d. a week or 85,64d, per hour.
Because of the greater fuel economy provided by the oil engine, the basic rate of fuel consumption will now be reckoned at 18 m.p.g., as compared with 12 m.p.g. for the petrol-engine version. Additionally, despite the exceptionally low average of 20 miles a day, this oil-engined version is expected to maintain its normal rate of consumption, with a resulting fuel cost a mile of 2.76d. Lubricants are now reckoned at 0.26d., whilst tyres remain the same at 0.98d, a mile. Maintenance is reckoned to cost 2.96d. and depreciation 2.02d. a mile, This gives a total running cost per mile of 8.98d. which, when added to the standing cost, gives a total operating cost of 44.95d. per mile. or £18 15s, a week. 1 his shows a saving of 155. a week compared with the petrol-engined version, even at 100 miles a week. But in both case; the high cost of low-mileage transport is revealed.
NO mention is made in this reader's request as to the possible use of spare trailers. without which the complete benefits of articulation cannot be achieved. Without further details as to the possibility of such a development in this particular instance, the likely savings in operating costs cannot be given. other than that the cost of additional trailers would be around £330. Apart from an appropriate addition to interest charges, which in any case would be relatively minor, and possibly a nominal increase in maintenance charges to cover the cost of the minor attention the additional trailers would require, there would be no other additions to the operating costs.
From the operational aspect, however, it should be 1345 emphasized that the benefits of having one or more additional spare trailers can only be realized if there are not only a corresponding number of loading points, but also loading staffs to deal with traffic, even though the tractive unit may he 'elsewhere.
RATING and valuation are complex subjects. The majority of road transport operators have neither the time nor experience to make a detailed study of them, even though they are naturally involved in the end product, namely the payment of rates. As from April 1 1963, however, substantial changes will come into effect in connection with the amount of rates payable on commercial and industrial premises, and a reader asks for guidance as to the likely implications. A basic change will be that as from that date commercial premises will be rated in full, namely 100 per cent of the value given in the new 1963 valuation list, instead of 80 per cent, of the 1956 values. Also by virtue of Section 1 of the Rating and Valuation Act, 1461, the de-rating of industrial and freight transport properties will cease. Previously these were rated at 50 per cent, of the 1956 value.
Obviously, such fundamental changes could, and probably will, have a substantial effect on the total amount of rates payable by most operators. It is, therefore, important that they should consider as soon as possible to what extent they are likely to be affected. But because of the complications of the several issues raised, the majority of operators will probably prefer to have the guidance of professional advisers, particularly as to whether they should contest a particular valuation in the new list, and, if so, how they should object.
As in other legal procedure, for example goods and passenger licensing, it is not enough to have a good case. It is equally essential to be fully prepared to take the right action at the right time if unreasonable assessments are to be adjusted to more equitable level. Moreover, any high level of valuation once established, may be the more difficult to contest at a belated date.
Briefly, any operator who considers that the valuation of his premises is rated too highly is entitled to make a proposal for its alteration which must be served on the local valuation
officer, and made on the prescribed form obtainable from th. officer. In addition to the details of the particular herediti ment, the operator must state the alteration he proposes in ti valuation, and the grounds for his contention.
For the latter purpose, an additional sheet can be attache if the space provided on the official form is inadequate. will not be sufficient merely to state that the original valuatio is too high. But the suggested figure may nevertheless b adjusted during subsequent negotiations resulting from th operator's application.
AS an indication of the extent of possible changes with th coming into force of the new valuation list on April 1, 196: the basis for the current list, which came into force in 195( is that whilst private dwelling houses are assessed at 193 values, commercial premises are rated at four-fifths of curren rental values and industrial premises at 50 per cent,
Preparation of the new list is the responsibility of th Valuation Officer of the Board of Inland Revenue. Ratin, authorities—the local authorities—must receive the new lis before the end of this year and they are under obligation ti make it available to the public. Nevertheless, no alteratioi can be made to the new list until it is in force, which in thi instance will be on or after April I, 1963. However, when appropriate, any agreed changes will be effective retro spectively.
During negotiations following a proposal for an alteratior in the valuation list and pending settlement, the extent tt which one will have to pay the current rates will be limitec to the amount of the previous year's payment, pLs half thc increase due under the new assessment. But this concessior applies only if the proposal for alteration is made within si) months of the list coming into force.
On receipt of a proposal for alteration, the valuation offices must send a copy within 28 days, together with an indicatior of the right of objection, to both the occupier of the propert) and the rating authority concerned, assuming that neither ol them initiated the proposal. In turn, either of these ma) object to the proposal within 28 days.
Subsequently, if the proposal of a ratepayer is objected to by the valuation officer and the ratepayer does not withdraw, the case will be referred to the local valuation court. The same procedure applies if the valuation officer himself appeals against an objection made by a ratepayer to his proposal. Supplementing this formal procedure, however, it is usual in practice for the ratepayer to discuss any proposals with the valuation officer before a case goes forward for hearing. If, as a result of such discussions, agreement is reached between the two parties it is ncit necessary to appear before the local valuation court unless the third party—the Rating Authority— does not accept whatever agreement has been reached.
At the actual valuation court the party concerned can either appear in person or be represented by a professional adviser. Following a decision of the local valuation court, appeal can be made to the Lands Tribunal, whilst on a point of law, a
further appeal can be made to the Court of Appeal. S.B.