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Operating costs up by 20 pc reveals CAPS report
Page 19
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)13E R ATING costs have isen by between 16.25 and 0.20 per cent during the ,ast 15 months, according to he final report of the Centre or Interfirm Comparison ,n the Road Haulage kssociatio n's cost and
iroductivity scheme CAPS).
Comparing various iaulage modes operating :osts per mile for general iaulage have gone up by 17.51 per cent, general and ong-distance combined by 16.25 per cent, agricultural Dy 18.73 per cent and tipping Dy 20.20 per cent.
Moreover, says the report, inder phase three of the 3overnment's anti-inflation Tleasures these increases :annot be recovered in full Dy the introduction of higher rates.
Giving firm indices for our years to January 1973 ind estimated figures from :hat date till April this year, :he report demonstrates that :he demand for road haulage ,ncreased in the year 1972/73. This had a marked effect on the cost per mile figure for the final year of the report and hauliers were able to increase productivity in that year.
The overall effect was that total operating and finance cost indices increased during the year 1972/1973 in mixed general and long-distance work and in agricultural haulage but declined in the other three groups.
For vehicles engaged in combined general and longdistance haulage operating costs per mile during that period were increased by 1.32 per cent, in the agricultural field by 8.22 per cent, but dropped by 9.95 per cent on tipper work.
Overheads
Overheads per vehicle mile rose by 32.98 per cent for agricultural haulage but, in contrast, fell by 46.08 per cent in tipper work.
It was necessary, says the report, to achieve an increase in total revenue of 3.59 per cent for tipper, 3.46 per cent for long-distance, and 2.46 per cent for longdistance and general combined in order to secure a return of 9.5 per cent on operating assets before finance charges.
Commenting on the changes in the indices between 1971/72 and 1972/73, the report points out that in the long-distance field, a decline in indices of total operating and finance costs per mile was because of a decrease in overheads. Because mileage in 1971/72 was abnormally low, hauliers had to spend quite heavily on tyres when business picked up in the following period. Costs per mile would have been substantially increased except for a 22.92 per cent increase in vehicle mileage.
Goods in transit and vehicle insurance was the subject of a notable increase in the mixed general and long-distance activity. This group did not experience the same kind of reduction in mileage during 1971/72 as did the others and therefore its overheads costs per mile followed more closely the average trend of steadily rising costs.
The substantial increase in payload capacity in evidence among general haulage vehicles had kept fixed costs in check and reduced semivariable costs and overheads.
In the tipping sector, an increase in mileage of 68.53 per cent had resulted in a drop of 16.11 per cent in total operating and finance costs but increases of 23.08 per cent for repair and maintenance, 14.64 per cent in depreciation and 52.7 per cent in insurance had resulted in the total per mile increase of 8.22 per cent in agricultural vehicle operating costs.
The further increases in costs which had occurred during the period between January 1973 and the end of April 1974 had brought about the cost increases referred to by Mn. P. Wells, the Association's retiring chairman, at its annual dinner last month (CM May 17).