How to Use
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OUR NEW COSTS RECORD
ILLUSTRATED on this page is a sample sheet from The Commercial .4.1otor Operating Costs Record. Figures relating to a week's operation of a 6-ton sided lorry have been entered. They show—and this is an outstanding feature of this system of costing—the cost per mile run in respect of actual running costs and the cost per hour for the standing charges.
It cannot be too strongly emphasized that the complete story of the operating costs of a motor vehicle must be set out in these terms. The only exception to that rule is with reference to work in which the vehicle covers the saute mileage regularly each week.
How useful and helpful it is to have the information in this form may best be gathered from examples of use. It is particularly important that I should point out, at this juncture, that this system of keeping records of costs is quite as useful to the ancillary user as to the haulier, also to the coach operator, especially to the man who is interested in contract work.
A completed page from "The Commercial Motor" Operating Costs Record, a new and invaluable publica tion.
Take first a simple example—the case of the haulage of bricks. Let me -assume that a builder, a builder's contractor, a maker of bricks or a haulier—anyone who may, for any reason, be expected to concern himself with the transport of bricks--proposes to use the vehicle to which the above records apply, to convey bricks over a 30-mile lead.
A full load for the 6-tonner is 2,500 bricks. Let me assume that 1i hotfr be necessary for loading and 1* hour for unloading. The time occupied on the road between the two termini, going for the bricks and returning with them, is three hohrs. The total time for a complete round journey, loading, unloading and travelling, is thus 51 hours. Given that information, the net cost of operating the vehicle for each round journey can be calculated as follows : z22 First, take 51 hours at 2s. 9Id. per hour, costing 15s. 4id. In addition, there is the cost of running 60 miles at 5.78d. per mile, and that, to the nearest farthing, is £1 Ss. bid. The total is £2 4s. 3d., equivalent to 17s. 81d. per 1,000 bricks—the net cost of operating the vehicle.
There are two points to note before I leave this example. First, that neither in the case of the ancillary user nor of the haulier is this the total cost of transport. It is merely the cost of operating the vehicle, Both classes of owner are also involved in additional overhead expenditure and incidentals.
The second point is that these figures serve as a warning to the haulage contractor who is in the habit of cutting rates. They do not indicate to him the rates that he should charge, but they definitely demonstrate his bare costs. If he has these figures before him and he be charging, say, 21 per 1,000 bricks, he should realize that there is something wrong. He should see that he is working at a loss and that, although he may, for the time being, have some money to bank each week-end, every halfpenny of that money should really be earmarked for future expenditure, either on some of the items of operating cost which have not yet presented themselves, or to meet some overhead charge Which he has forgotten or has not yet encountered. . Again I emphasize that the advantage of this simple scheme of cost recording is that the operator is given immediate information concerning the all-in average cost of operating his vehicle throughout its life.
Now, to take another example—one which is prominently in the minds of hauliers, at the moment— the, haulage of roadstone. Usually this work has to be tendered for over a schedule of distances commencing with a mile and advancing in one-mile or half-mile stages up to a maximum of; perhaps, 25 or 30 miles.• The point to remember about the transport of roadstone
is that there is a constant factor, namely, the time for loading and unloading, which is unaffected by the lengths of lead.
What that time is depends upon the arrangensents for loading and unloading. I propose to assume that loading is effected by a chute and that unloading is by tipping. I am also going to take it that there is a certain amount of waiting at the chute, so that the average loss of time at that end is hour per load. For unloading, including backing into position, tipping and getting away again, I shall assume
hour. In addition, of course, there is the time spent in travelling and the cost per mile for the distance travelled.
For a one-mile lead, the distance travelled is two miles and the time for travelling probably 10 minutes. The net cost of a one-mile journey is thus 1 hour 10 minutes at 2s. 94d., which is 3s. 3d., plus two miles at 5.78d., say, is.; total, 4s. 3d., or 8/d. per ton. This is only the cost of operating the lorry and is certainly not the rate to be charged for the work.
• Over a two-mile lead the average speed of travel will be a little higher and the total time will probably be only 1/ hour, costing 3s. 6d. for time, plus is. lid, for distance ; total, 5s. 5d., or 11d, per ton net cost.
For a three-mile lead, the maximum average speed of 20 m.p.h. may be taken and the time occupied in travel ling will thus be 18 minutes, the cost of which, at 2s. 9/d. per hour, is 10d. The cost of the total time, 1 hour 18 minutes, is 3s. 74d. Add for six miles at 5.78d., 2s. 100. ; total, 6s. (Id., which is ls. ld. per ton.
After the three-mile lead has been reached, it is safe to add a fixed amount calculated as follows :—The time for each additional mile lead is that necessary to cover two miles, which is six minutes, and costs 3/d. In addition, the cost of two miles at 5.78d. per mile is, say, is., and the total is. 34d., which is just over 24d. per ton. That 24d. can be added to the price for, say, each additional nine miles, then 2d. will do for the 16th mile, and 2/d. per mile for each subsequent nine miles, 2d. for the next mile, then 24d. again for each mile, and so on.
Once again I must emphasize that this is only net cost. In The Commercial Motor Operating Costs Record a method of calculating a fair minimum average rate for haulage, with only these figures available, is described. The operator can obtain.
details for himself by purchasing the book, which costs orly is. (Is. 3d. by post) and contains sufficient forms to enable costs to be kept relating to two vehicles for a year. Such a book is particularly necessary for the
small man. •
The man who uses this Operating Costs Record would be well advised to check his own figures, from time to time, against the averages contained in The Commercial Motor Tables of Operating Costs. He is thus enabled to trace any excessive expenditure due to mechanical inefficiency or to other causes and to keep his costs
within economic bounds. S.T.R.