How to Make Coal Haulage Pay
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LAST week I commenced to recount a conversation with a coal. haulier concerning rates, and at the close of that article I was about to say to my friend : " Let me look over that schedule of prices again."
He brought out his sheet• of notepaper, on which Vfere printed the following figures:—
"You say that most of your vehicles are 2-tonners? " "Yes, but they usually carry 3-ton loads."
".Very well, if the manufacturers guarantee them for that load, I have nothing to say."
" Oh I yes, they are all covered by guarantee so lOng as I don't exceed a maximum of 3 tons."
What do they do to the gallon? "
" The fignre varies, but it is usually about 11 or 12 miles."
"We'll say 114; and. what do you pay for petrol? ' "One and twopence."
Using Our Tables as a Basis.
"That means that the cost of fuel per mile is nearly the same as that quoted in The Commercial Motor Tables of Operating Costs, where it is given as 1.22d. We shall probably not be far wrong if we take it that the running costs are the same throughout, adding a little for extra cost of maintenance or tyres, or probably bOth, making the total 2.90d. What wages do you pay? "
"I pay 53s. 6d. a week." "In that case, the 58s. 6d. quoted in the Tables Will stand."
" How do you make that out?"
"There is an allowance in that 58s. 6d. for two extras. First, for three classes of insurance, National Health, c26 National Unemployment and Employers' Liability; the total averages about 2s. 6d. a week. In addition, there is provision for a week's or a fortnight's holiday, during which, while your own man is on holiday, for which he is presumed to be paid, you will have to pay another man to do his work. That accounts for the other 2s. 6d.''' It was clear that my haulier friend had not hitherto realized that allowance must be made for these extras. In that matter I am afraid he is neither better, nor worse than a good many others, even of those who conform with the more or less pious resolutions of the National 'Conciliation Board that drivers should be given a week's holiday with pay, in addition to the usual statutory holidays. When it is realized that the items thus enumerated total Ss. per week, the importance of taking them into consideration will be appreciated.
How Costs Worked Out.
In the course of further conversation it transpired that the remainder of the standing charges were, within a small fraction, the same as those set down in The Commercial Motor Tables of Operating Costs. Ile paid £20 per annum for garage rent, which is approximately 7s. 6d. per week, •and. £18 per annum for insurance, which equals 6s. per week. The total standing charges for these 2-ton vehicles amounted to 85s. 8d. per week, and that, on the basis of a 48-hour week, is Is. 90. per hour.
" Now, is. qd. per hour and 2.90d. per mile are your vehicle operating costs," I said. " You must add something to both of those figures to provide for establishment costs and profit. You should add 50 per cent, to your standing charges, making them 2s. 71d. an hour, and not less than 25 per cent, to the running cost—a little less than 31d. per mile. You ought to charge at least 31(1. and preferably 4d."
"How do you arrive at that percentage? " he asked.
"In this way," I said; "take 20 per cent. additional to your standing charges to cover establishment costs. That calculation gives you your total fixed charges. You 5hould then make at least 25 per cent. profit."
I demonstrated that 25 per cent. on the total was the same as 30 per cent, of the original standing charges, so that 20 per cent. plus 30 per cent., being 50 per cent., that figure was the one to be used in calculating how far the standing charges should be increased to give the charge to be made per hour.
" On to the running costs you just add the 25 per cent. minimum for profit on each mile run," I concluded.
" I am still a long way from seeing how you're going to work out a price per ton with those figures," was his next comment.
"It's not very difficult," I said. "The best way to deal with it is to do as the B.S.A.T.A. does; that is to say, first of all calculate the cost of loading and unloading, irrespective of the mileage. How long does it take you to load 3 tons? I supppose most of it is done by hand from railway wagons? "
"Yes, that's so, and you won't be far out if you take half an hour."
"I suppose that's with only one man? "
"Well, I pay only one man. Sometimes there is a little help at the yard, but it doesn't make a lot of difference."
"And unloading? "
Delay in Unloading.
"The load is usually tipped into the factory yards and, of course, that doesn't take more than a minute or two, but there is usually some little delay in getting into position and, for that and other reasons, you'd better allow 10 minutes."
"That is 40 minutes in all. Two-thirds of an hour at 2s. ncl. is Is. 9d. as near as makes no matter. That is your cost for loading and unloading 3 tons of coal. "Now for the travelling time. For the first mile lead the vehicle has actually to travel two miles, so that the net cost of that work at 4d, per mile is 8d. But that is not all. You have also to allow for the time taken to travel those two miles. It will not be possible for the vehicle to reach much speed and an average of 20 m.p.h. is the best that you are likely to achieve. The time for two miles will, therefore, be I / 10th hour. You want to allow 1/10th of 2s. 71d., which is about 3d. That means that the charge for the two miles of travelling necessary for the one-mile lead is 11d., and your total charge must be is. 9d. and 11d., making 2s. 8d. That, as near as makes no matter, equals 11d. per ton. So you see that on your preliminary charge of 9d, you are not making the profit you ought to Make. For the first mile or two, while your average speed is still about 20 m.p.h., each extra half-mile should be charged for in this way."
A Simple Rates Schedule.
"Can you put that down in a table something like the one I have here?" he asked, drawing my attention once again to the figures which appear earlier. I set the figures out as follow:—
He looked at the figures for a moment and then said: "Then the rates I am getting are better than those you suggest, so soon as I get above a two-mile lead? "
" That is so," I said, "but only upF=to a point Nevertheless, I imagine that you would probably be best advised to stick to those rates unless most of your work is over distances in excess of two miles."
"A good deal of it is," he responded, "although there are one or two factories quite near to the goods yard. But how do I go on with the other sizes,' of vehicle? "
I then proceeded to show, in a similar manner, that for a 30-cwt. vehicle the charges should be calculated on the basis of 2s. 7d. per hour, plus 30. per mile. Taking half an hour for loading and unloading, it was demonstrated that the price per ton for the first mile should be is. Id., and that 'it should increase at the rate of 20. per ton for each half-mile. The schedule, worked out as in the two foregoing cases, would be