"THE COMMERCIAL MOTORTI LES OF OPERATING COSTS.
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What They Are and How They Are Obtained. Assist the Reader in Employing T c Examples of Costing Problems which Will able Information Advantageously.
has been our custom, year by year, as we revise these tables of cost, to accompany their publication by a lengthy explanation of the bases on which they are compiled and of the method of collating the information from which the figures are calcu• lated. • Some such explanation is absolutely necessary in order to meet the requirements of those many new readers who, each year, see these tables for the first time; moreover, even readers of long standing are apt to forget and may like to be reminded, apart from the fact that the basic prices of material alter in such fashion as to make some reference to the fact essential. This year we are departing from that custom, as we are making the explanation as brief as possible and holding ourselves at the disposal of readers who desire fuller information, in so far as we are .prepared at any time to answer questions which may be put to us on the subject. For the rest, we are going to devote that space which is available to us to exemplify the use of the tables, for which purpose we are going to take actual inquiries with which we have dealt in the course of correspondence during the past year.
The Bases of the Tables.
In giving, first of all, our brief explanation we must commence by pointing out most emphatically that these are average figures. They do not purport to show the best results which can be obtained with each or any type and size of vehicle with which we deal: on the other hand, they do not pretend to be examples of the least favourable results which can be obtained. New vehicles in first-class condition, well maintained and carefully operated, working under conditions which aid in obtaining, good results, will show figures for cost which are better than those which we publish. Alternatively, it may well be that those wellfound vehicles, if operating in adverse circumstances, would not show even to such advantage as those exemplified by our figures. We must point that out in order to make it clear that unfavourable figures for costs of operation are not necessarily a reflection on the vehicle or on those in whose care the machines are, but may be brought about by conditions outside the control of either. In a good many cases, too, old-type machines, badly cared for, may not show such good results as might he expected from examination of our figures of Cost. Reference to this fact makes it necessary for AS to remind readers that, as from last year, we ceased to include in those average figures from which we calculate these costs any which related to vehicles more than five years old. Experience shows us that to do so was unfair to the generality of commercial vehicles, because the costs, from a variety of .reasons, were excessive.
Average Figures Brought Up to Date.
As may have been gathered from the foregoing, the costs embodied in these tables are based on actual results obtained in commercial service by ordinary users of the types of vehicle concerned. No particular discrimination is exercised between good and bad results, as such discrimination would vitiate the value of the figures considered as averages. These figures are always in process of being collected by us, SO that we are immediately aware of any tendency up or down in the operating costs of commercial motor vehicles. In addition, whenever the time comes for the revised figures to be published, the averages themselves are corrected according to current prices of commoditiespetrol, oil, tyres, materials for repairs, and so on-labour and other charges.
In this connection, readers who have been accustomed to obtain these tables of costs annually will note that this year we have, in compiling them, made allowance for the continued improvement in the service which is rendered by pneumatic tyres. An article dealing with that matter appeared in last week's issue of The Commercial Motor, so that we need not enlarge upon-the point here. Petrol, coal and oil are still costing the same as they did when we last revised the tables about a year ago. Petrol is still obtainable by the commercial user at Is. 2d. a galldn, including tax, and coal is still costing about 45s. a ton. Oil we price at 5s. a gallon: many users obtain it for less, but the majority of owners of single vehicles pay the higher price which is charged to them for branded materials. The wages which are embodied in the tables are union rates. Insurance is at a figure slightly
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less than tariff, interest on first cost is reckoned at 5i per cent., that being 1 per cent, above current bank rate. Another point a scrutiny of the tables will demonstrate is the fact that we have discovered that, in general, maintenance
costs of pneumatic tyred vehicles are less than those on solids, and we have assumed a corresponding appreciation in the life of the vehicle, which means that the ,figure for depreciation is also slightly less.
Examples of Use of the Tables.
We wilt begin well down in the range of sizes and deal with an inquiry from a man who wanted to know how he should charge for the hire of a 7-cwt. van with which be was doing a variety of odd jobs, including a baker's contract, during which he did three half-hours' work a day and ran 12 miles, and another one delivering newspapers, doing two hours' Work a day and a mileage of 24. In a case like this it is best to calculate the charges separately on a time and mileage basis, and We advise him to proceed as follows :-First to assume 36 profitable hours a week. The standing charges for a 7-cwt. van are 73s. 4d. a week, which is very nearly 2s. id.. an hour. Establishment charges and profit, as per table, amount to £3 a week, which is 1s. 8d.. an tour. For time, therefore, the charge must be 3s. 9d. an hour. The running costs of a 7-cwt. van, again according to the tables, amount to 1.31d, per mile and the charge should be 2d. The total charge for any job should therefore be at the rate of Bs. 9d. an hour and 2d. a mile. Applying this method of calculating the charges to the two contracts named, the following figures emerge. For the baker, an hour-and-a-half a day and 12 miles, the charge should he 5s. 8d. for time and 2s. Tot the mileage, a total of 7s. 8d. per day. The newspaper job,' correspondingly, should be charged at 7s. 6d. for the 2 hours plus 4s. for the 24 miles. a total of 11e. 6d. For a Week's work of 36 hours, assuming an average mileage throughout the whole period of 5 miles per hour, the total revenue will he 36 times 3s. 5d., which is 135s. plus 180 miles at 2d. a mile, which is 30s., total :E8 5s.
Now we will go to the other extreme and take the case of the man with a 6-ton steam wagon who wants to carry loads of paper 10 miles a day. His charges and his revenue will depend largely on how long it takes to load and unload. If it takes so long that he will only be able to do one journey a day, or six a week, then that .means that be will be travelling 120 miles in a week and, according to our table, his minimum revenue must be £18 8s. He must, therefore, charge at least £3 3s. a load, that is to say, 10s. 6d. a ton. On the other hand, if loading conditions be such that he can improve upon that performance to the extent of getting in two trips a day, then he will do 240 miles a week and his revenue must be approximately half-way between £21 14s. a week, which is given in the tables for a weekly mileage of 200, and £25 2s, a week, which is the figure for 300 miles a week.
Now another query from a man with a 3-ton lorry, who tells us that the work consists mainly of loading and unloading, the distances travelled being quite short, often so little as half-a-mile. He wants to know how much per ton per mile he should charge. The difficulty here is that we have no figure for the weekly mileage. It may be assumed that loading and unloading, will ..take an hour-and-a-half or so, and on that basis we can take it that the lorry will do four trips a day, an average distance of two miles each way, which is 16 miles a day-96 or, say, 100 miles a week. Referring to the tables we find that the revenue from a 3-ton lorry doing 100 miles a week must he at least £13 4s.-suppose we say £13 '10s. The tonnage carried is 12 per day, or 72 a week, and it is brought an average distance of 2 miles. All together, therefore, the work done is 144 ton-miles and his charge must be £13 10,s. divided by 144, which is is. 101d. per ton per mile, Finally, a passener-vehicle inquiry. 'A man with a 20-seater coach, doing 1,000 miles a week, wants to know if he can make it pay if he charges id. per passenger mile. The operating cost of a coach of this size, according to the tables, is £26 16s, a week. The revenue from 20 passengers travelling 1,000 miles and paying id. each mile is £41 13s. 4d., so that the balance for establishment charges and profit is £14 l.7s. 4d., but a bus is, on the average, only two-thirds full, in which ease his revenue would be no more than £27 9s., leaving him only 13s. for establishment charges and profit
in a week. S.T.R.