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LEX

5th September 1952
Page 54
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Page 54, 5th September 1952 — LEX
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Which of the following most accurately describes the problem?

'GOVERNOR'

CARBURETTOR

Now to deal with a 10-tonner in the same way. Running costs per mile: fuel and lubricants, 4d.; tyres, 21d.; maintenance, 21d.; depreciation, 3/d. The total is Is. Md. per mile. ■

Before assessing the standing charges it is necessary to calculate how many hours per week the vehicle is likely to be engaged on the job. The loading and unloading time can be dealt with in the same way as with the 7-tanner; there will be 1-hour for loading by chute and unloading will be at the rate of approximately 10 minutes per toil, making 100 minutes in all, say 21 hours for terminal delays. The travelling time for 104 miles can be taken as approxi

mately 6 hours, so that the total is 81 hours, approximately 52 hours per week of six days.

There are two men employed, a driver and mate-otherwise the unloading time would be greatly extended-and the wages bill, including provision for overtime, for national insurance premiums and holidays with pay, total £16 3s. per week. The other items are: .Road Fund tax, £2 4s.; garage rent, 12s. 7d.; insurance,. El 7s.; interest on capita' outlay on the vehicle, £2 2s.; establishment costs, £5; the total being £27 8s. 7d.

During the week, the vehicle completes six journeys of 104 miles each, a total of 624 miles, and that at Is. Md. per mile is £33 3s. The total cost-that is to say, the sum of the fixed charges, £27 8s.. 7d., and the running costs, £33 3s.-is thus £60 1 ls. 7d.

Provision for profit must be added to the net cost, and for work of this kind I am quite confident that a reasonable minimum rate is 20 per cent., that is approximately £12 2s. 5d. With a 10-tonner of this type, therefore, the operator must earn £72 14s. per week, and as he carries 60 tons he must obtain a rate of El 4s. 3d. per ton.

In the case of a 12-tanner, the unloading time is further increased by another 20 minutes, bringing the total to 21 hours, so that a round journey takes rather more than 8f hours. The corresponding figures for the 12-tonner appear in the third column of Table I, also the figures for the 14-tonner.

The point we are striving at is confirmed by the figures in the last line of Table I. They show that whereas with the 12-tanner a fair and reasonable profitable rate would be £1 Os. 3d. per ton, it would have to be £1 9s. Id. per ton in the case of the 7-tonner.

It would not be a reasonable solution to take £1 9s. Id. as a rate and apply it to all sizes of vehicle. The profit accruing from the use of the larger vehicles would be excessive. Assume, for example, that the rate is fixed at £1 9s. Id. per ton. That shows reasonable profit of £10 5s. per week when it applies to a 7-tonner. In the case of the IO-tonner, however, the revenue per week would be £87 5s. The cost remaihs at 160 us. 7d., as shown in Table I, so that the profit would be £26 13s. 5d.

In the case of the 12-tanner, the revenue would be £104 14s, per week against an expenditure of 165 7s. 9d., showing a profit of £39 6s. 3d., and with the 14-tonner the revenue 'would be £122 3s. and the profit in excess of £50.

There is still one more aspect of the problem to be considered, that is to take into account what can be done with a. 30-m.p.h. vehicle that carries 6 tons. The journey time can be cut to 5 hours, comprising lf hours tor terminal delays, and the travelling time for 104 miles can be 31 hours.

I will take a petrol-engined 6-tonner as an example. The running costs will be something like the following: petrol and oil, 411; for tyres, lid.; maintenance, 2d.; depreciation, 2/d.; the total is 10/d. per mile. The weekly mileage is 1,248 and the cost at 101d. per mile is £55 18s.

The fixed costs include: tax, 14s.; wages (two men), £17 14s. 6d.; garage. rent, 10s. 6d.; insurance, 16s. 7d.; interest on capital outlay, 18s. 11d.; establishment costs, £3. The total is £23 14s. 6d. which, added to £55 18s., gives a total of £79 12s. 6d.

Profit at 20 per cent. is approximately £15 7s. 6d., so that the weekly revenue should be £95. The weekly tonnage is 72 and the corresponding rate is therefore £1 6s. 6d. A 6-ton 30-m.p.h. vehicle is thus cheaper, or more profitable, than a 7-tonncr, incurs nearly the same cost as a 10-tonner, but is dearer than the 12-tanner and the 14-tonner.

Now take an oil-engined 6-tonner. The fixed charges now amount to £23 17s. Id., being different from the petrolengined vehicle only in respect of interest on first cost. which is El Is. 6d. instead of 18s. 11d. The running costs comprise: fuel and oil, 21c1.; tyres, W.; maintenance, lid.; depreciation, 21d.; total, 9d. The cost of running 1,248 miles at 9d. per mile is £46 16s.

The total cost is £70 13s. Id. Profit at 20 per cent. is £14 2s. 6d., and the revenue per week should therefore be £85 15s. 7d., which is equivalent to £1 3s. 7d. per ton. Clearly, the 6-ton oiler comes mid-way between the 10-tonner and the 12-tonner. S.T.R.

• A new edition of "The Commercial Motor" Tables of Operating Costs will be published about September 22, price 2s, 6d, It will provide the latest authentic data on the cost of operating all types of commercial vehicle and will include recommended charges.

Extracts from the new Tables were published in "The Commercial Motor" on August 8.

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