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Making the most of your link men

7th November 1975, Page 112
7th November 1975
Page 112
Page 112, 7th November 1975 — Making the most of your link men
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Which of the following most accurately describes the problem?

By Johnny Johnson

IN ORDER to make a reasoned judgment on the financial merit of accepting or rejecting traffic offered, it is necessary for traffic office staff to have a knowledge of basic costing. It is not surprising, therefore, to find that a simple costing system provides the basis of a week-long course for traffic clerks organised by the Road Transport Industry Training Board at Scotland's own Motec in Livingston.

This should not be allowed to daunt the uninitiated, however, for the course is well worth the time spent and even the employee who is no stranger to costing can pick up useful tips.

Apart from the firm's drivers, the traffic clerk is probably the most important and constant point of contact between a company and its customers. Business can be lost or gained according to his personality, and only by his business acumen will the profitability of the company be protected.

It is perhaps surprising that till comparatively recently no formal training existed for this key position and all too often new personnel learned the rudiments of the business by "sitting next to Charlie." The quick-witted probably soon picked up the salient points as they went along though even in these cases companies probably suffered losses or failed to retain traffic through sheer inexperience. In the worse cases, an inability to understand the finer arts of rates quotation and negotiation cost companies dear before a change of staff brought relief.

Establishing a simple common transport system at the beginning of the course serves two purposes. It makes sure that all the pupils are applying a common yardstick and it underlines the financial implications of the job itself.

I was pleased to see that the disadvantages of marginal costing and the influence on viability that the apportioning of overheads can have on individual trips was demonstrated. It is perhaps interesting to see the method used to distribute overhead among a fleet. This is a combination of equal distribution among fleet units and apportionment by carrying capacity.

For example, in a fleet comprising 20 vehicles half the annual overhead cost of £1,000 is allocated equally to each vehicle so that each bears an initial overhead cost of £25. The remaining £500 is divided by the total carrying capacity of the fleet, say 250 tons, so that a per ton cost would be £2. Thus a 20-ton vehicle would bear a cost of (20 x £2) £40 plus the initial £25, a total of £65.

Job profitability

Another aspect demonstrated is the evaluation of job profitability and methods adopted to appraise the merit of accepting or refusing particular jobs.

Differences in revenue to be obtained by charging an a straight charge per mile basis or quoting on a time and mileage basis is explained and the use of the upper and lower limits thus obtained as a basis for rates negotiation suggested.

On this subject, the course tutor, Stuart Barclay commented on the number of students attending the course who habitually charged only for the loaded mileage and disregarded the return journey for which no return load had been obtained. On the basis of correcting these fundamental errors alone lies the justification for formal training for this class of employee.

Time is spent, too, on illustrating the type of documentation necessary for monitoring the cost system and the profitability of vehicles and jobs. Fully aware of the necessity to keep the number of forms to a minimum and to keep the forms which are indispensable to as simple a format as possible, Motec staff have devised recommended layouts. Such vital documents as cost-quotation schedules and the fleet operating cost and profit statement, as well as a vehicle


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