What Does It Cost to Haul Round Timber?
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WHEN 1 received a letter from a timber-hauling friend of mine in Hampshire, asking for advice on costs and rates in connection with the haulage of round timber, I felt that I was really up against it. None of my usual methods of attack would do: the figures in "The Commercial Motor Tables of Operating Costs" could not be applied. The letter was like the majority I receive-the facts given were totally inadequate for the purpose.
I have complained of this before, and yet, on further consideration, 1 must admit that the odds are all in favour of letters of inquiry being short of all that I could desire. If the inquirers knew enough about the job to be able to set down in their letters all that pertained to it, the probabilities are that they would not need any assistance. Obviously, it is up to me to take what is given in the way of data, and fill in the blanks according to my own knowledge and experience.
Let me set down, first of all, the information I did receive. The letter states that the operator would like me to work out a few running costs and rates for him. He tells me he is operating two ex-Army tractors, and one new model of first-clnss make. The trailers, of 12-tons capacity, he has made himself.
3 m.p.g. with Ex-Army Trucks .
"Fuel consumption," be says, "of the two ex-Army tractors, which run on petrol, averages 3 m.p.g. The third vehicle, which is an oiler, averages about 7 m.p.g. This includes the fuel used for loading the trailers. Insurance of the veliicles is about £40 each, and tax £55 per annum.
" As regards tyres, those on the trade' s occasionally burst. I get over this by buying up all available used tyres I can find at £5 to £10 each, against new prices of £45. Three per year on each vehicle-£20-plus £14 for three tubes makes £34 per annum.
"I pay the drivers a wage of £5 10s., plus a bonus of 10s., 15s. or £1 per week after six months of accident-free running. To this I add a bonus of is. in the £1 from £50 to 165, is. 6d. in the £1 up to £80, and 2s. in the 11 over £80 of earnings. This applies to mates as well as drivers. The mates get a £5 flat-rate wage, and receive no accident bonus. The men work a five-day week. Saturday (and Sunday if worked) flat rate-drivers £1 2s. a day, mates £1. I do not encourage Sunday work, but the lads usually go in and do odd jobs on the vehicles for which I do not pay.
"Cartage is rated on footage-so much per cubic foot of timber-and the average load for a I2-ton trailer is 350 cubic ft.
"Each parcel of timber ig priced before starting the job. I have a minimum rate per cubic foot, and this applies to easy loading and easy get-out, and up to 10 miles haul. In those circumstances the probabilities are that I can do two loads per day. When the places are difficult of access, and especially when an extra tractor is required, this minimum rate is increased. If the run be over 10 miles I make an addition per foot for every 10 miles, but that again applies only when the get-out is easy and the timber is good. Leads are up to 60 miles. The main point in considering the price to charge for a load is the type of timber, how far from the road, how much tackle is likely to get broken extracting and loading, whether the off-loading at the mill will take half an hour or, as sometimes happens, as long as stx hours."
There's a job of work to sort that out! The first thing I decided to do was to work along the prescribed method of sorting out the standing charges and running costs in the orthodox manner, starting as usual with the Road Fund tax. This is one of the few items on which I have specific information-£55 per annum, or £1 2s. per week.
The next item is wages, and here we have a pretty kettle of fish. Take the driver first of all. He starts with a basic figure of £5 10s. on to which he may or may not have a bonus of 10s., 15s. or £1, after he has been at work for six months, and depending on whether he has had an accident or not.
Then he may get a further bonus which starts at Is. in the £1 for earning of £50, which is £2 10s. It may be £3 5s. if the earnings go up to £65. Beyond that, for-the next £15, he gets Is. 6d. in the £1, which is another El 2s. 6d, makitig a total bonus of £4 7s. 6d.
Beyond that again, up to a maximum which is not stated, he may get a further 2s. in the £1. In addition, if he works on Saturdays, he gets another £1 2s. Now what am I going to do with that? The very least the driver can get appears to be £5 10s.
Apart from that, however, it is reasonable to suppose his minimum wage will comprise his basic £5 10s., plus 10s. for his no-accident bonus, plus £2 10s. for bonus on poundage. That is £8 10s.
In a good week, however, he will start with his £5 10s., £1 a week for his accident bonus, as much as £4 7s. 6d. for his poundage, and if he works on the Saturday he gets £1 2s That is £11 19s. 6d., say £12 a week.
So far as the mate is concerned, he starts with a minimum of £5, and whilst it is true that he gets no accident bonus, he is eligible to get the poundage, so his minimum is £5 plus £2 10s.-£7 10s. a week; his maximum is £5, plus £4 7s, 6d., plus £1 for Saturday, which is £10 7s. 6d. It seems to me that I can, quite reasonably, take what is called a weighted average in both cases. This is on the assumption that as there seems to be plenty of work about, and these men are careful drivers, the average wage will be nearer the top limit than the lower one. I shall therefore take it that the average driver's wage is £11, and the average mate's wage is £9. That is my second item of operating cost.
For garage rent 1 shall assume art arbitrary figure of 10s. per week. For insurance I am given £40, which is equivalent to 16s. per week. Now I come to interest on capital outlay.
Interest Equals al 10s. a Week
There are three vehicles, with trailer equipment to each. The new one with trailer probably cost £3,000, and the others I can take at £1,200 each. There is, therefore i• total of £5,400 for the three vehicles and trailers, equal to an average of £1,800 each. Four per cent. on that is £72 per annum, and it will be sufficiently accurate for the purposes of this article to take this as being equivalent to £1 10s. per week.
In any orthodox case, those five items will comprise the standing charges. This, however, is not an orthodox case. Clearly the element of time is very much more important than that of mileage which, as I shall show, is comparatively small, and in those circumstances it is always better to deal with depreciation as a standing charge so that the haulier gets full allowance for it in the rates he charges. Here I have an average price of £1,800 for vehicle and trailer. If I allow depreciation over six years, and having in mind the arduous nature of the work I think that is the maximum, I must provide £300 per annum, or £6 per week, on account of depreciation of vehicles.
We are not concerned with only vehicles and trailers, 1315 however, in this work. There is another item of considerable expense and that is tackle. If I assume that this operator has £500 worth of tackle, and that it is entirely replaced over a period of five years, then I have a further item of £100 per annum for depreciation, which is £2 per week.
Now I come to the running costs. First, as to fuel. I am quoted 3 m.p.g. on the petrol-engined tractors, and 7 m.p.g. on the oiler. This seems an occasion for comment as showing the outstanding advantage of the oil-engined vehicle for work of this kind, when the consumption is actually less than half that which is experienced with the petrol-engined machines. At a rough approximation the cost of fuel per mile is 8d. for each of the petrol-engined vehicles, and 3d. for the oiler. I will take an average of 61d.
Lubricating-oil consumption marches with that of fuel.'
I have invariably found that to be the case, and it is the general experience of operators. In this instance I propose to assume id. per mile for lubricants.
.Respecting tyres, first of all I must deal with this operator's suggestion that his costs should be on his current practice of using used tyres. That, to my mind, will not do. It is not a permanent state of affairs, and may not last long. So far as my figures for cost are concerned, I shall, therefore, take the full price of £43 10s. 6d. for a cover and £4 3s. for a tube, say £48 in round figures.
Before we can make up our mind what his tyre cost is, we must try and get some idea of the annual mileage run by these vehicles, as the information given is that three new tyres are needed per vehicle per year. Here we shall have to make some assumptions, but I do not think we shall be far wrong. °
First of all, it is to be noted that a 10-mile lead is mentioned twice in the letter, and it would seem that this is, to a certain extent, a regular haul. Equally apparent is it that the maximum distance is 60 miles, and presumably that distance is travelled only occasionally. It is anticipated, moreover, that an ordinary 10-mile lead can be covered twice in the day, but there again that seems to be the limit, so that anything more than 10 miles will reduce the number of loads to one per day, Of course, if it be a 15-mile lead the vehicle may get back in time to take on a load ready for a journey the next day, so that possibly three loads can be delivered in two days. Even that, however, is only 45 miles per day as compared with 40 on a 10-mile lead, and it certainly looks as though it will rarely happen that 300 miles is covered in a week.
A 35-week Year That is not all, however, that has to be considered. 1 do not know for certain, but I should imagine that there must be many days in-the year when there are no trees felled and available for loading, At any rate, I am going to take the view that in this class of work we do not take a 50-week year, but allow for only 70 per cent, of that in our calculations for costs and rates. That will be only 35 weeks in a year instead of 50. That does not affect the wages question because I do not mean that the vehicles are definitely idle for 15 weeks in the year, but that the number of days on which they may not be able to move a load will amount, in total, to 15 weeks in the year.
So far as our annual mileage is concerned, and that is what we are considering at the moment, we have to multiply 300 miles per week by 35 weeks, which comes to 10,500 miles per annum as the probable mileage of these vehicles. Now the cost of three tyres and tubes is £144, and this sum, spread over 10,500 miles, is equivalent to 3.3d. per mile for tyres; suppose I say 31d. to make it an even figure.
The next item is maintenance, and there I must admit I am without any statistical information. It does not, however, need much imagination, or even experience, to come to the conclusion that the maintenance toll on vehicles englaged on this class of work must inevitably be considerable, notwithstanding that the men are willing to come in on Sundays and do some running-maintenance jobs for which they make no charge. I imagine they are wise enough to be aware that only by keeping the vehicles on the road can they secure these earnings of £50, £65, £80 and so on, mentioned in connection with the bonus scheme. At any rate, I am going to make a shot at this maintenance, and reckon it as being approximately the same as the tyre cost31d. . For my running costs I have, therefore, 61d. for fuel, Id, for oil, 31d, for tyres and 31d. for maintenance, which is is. lid, per mile. Finally I come to overheads. These will not be inconsiderable. I imagine the operator will wish to draw a fair amount for his experience and ability-say £600 or £700 per annum. He will want an assistant at £200 or £300 per annum, and with certain additions I imagine that £1,500 per annum, spread over the three vehicles, is not an exorbitant figure. That gives me £500 per annum per vehicle.
I can now set out the fixed charges, which are as follows: Here again we have to refer to the irregularity of the work, and in order to make provision for that in this overhead cost, we must add 30 per cent., making a total of £56 per week as being the basis of our calculation. We are told-that the men work a five-day week, a week, presumably, being a 44-hour one. We must, therefore, reduce that £56 per week to a rate per hour which is £1 5s. 6d. so that, for our time and mileage costs, we have £1 5s. 6d. per hour, and Is. lid, per mile.
Two 10-mile Leads a Day
The operator says that he manages to work two 10-mile leads in a day, which, from his letter, I imagine to be about the limit, in that he takes full advantage of the possibility of overtime, and works 11 hours to get in that amount of work. The vehicle runs 40 miles. The actual cost is, therefore, 11 times £1 5s. 6d. for time-£14 Os. 6d.plus 40 miles at Is. lid.-£2 5s.-making a total of £16 5s. 6d. That is cost only. In work of this sort the operator is entitled to expect a minimum of 25 per cent, profit which is £4, making the charge £20 5s. 6d., say £20.
That is for two leads of 10 miles, so that he must charge £10 per load over that distance. A load is 350 cubic ft. so a reasonable price would be 7d. per foot. '
Iii order to be able to work out an increment per additional mile-lead, or per 10-miles lead as is mentioned in the letter, something more should be known as to the number of loads to be delivered in a week, or in any given time. I have, for example, already mentioned a 15-mile lead, and suggested it is probable that the operator would do three loads in two days.
If the conditions were reasonable I should further imagine that, at the most, those days would be of nine hours' dura tion or, at any rate, that 18 hours would be sufficient for
the three loads. The cost would be, -first of all, 18 hours
at El 5s. 19s.-plus 60 miles at Is. lid. a mile £3 7s. 6d.-making a total of £26 6s. 6d. Add 25 per cent, and we get a round figure of £33.. For that, three loads of. 350 cubic ft. are being carried, which is 1,050 cubic ft., so that another id. per foot on the rate would suffice for the extra five miles, and I would suggest that that is the best way to assess the cost of any such job, that is on a time and mileage basis taking as cost £1 5s. 6d. per hour plus Is. lid per mile run and adding 25 per cent, for profit. Of course, if an arithmetical method of assessing the increase be desired, it can be worked out in this way. Pre sumably, the vehicles travel at 10 m.p.h., so that for an extra mile lead, that is two miles of travelling, there would be required 12 minutes or one-fifth of an hour, costing 5s. For the two miles run, 2s. 3d., giving a total of 7s. 3d. Add 25 per cent, to that-is. 10d.-and we get 9s. id. or 109d. for 350 cubic ft., which is .31d. per mile, and for 10 miles, 3d. per foot extra. Assuming that it is possible for a 60-mile lead to be completed in a day, as seems to be assumed, although I should imagine that the conditions would have to be reason ably favourable, then the cost would be at the rate of £1 5s. 6d. for 11 hours--£14 Os. 6d.-plus 125 miles at Is. 15s.-making a total of £20 15s. 6d. plus £5 for profit, £25 15s. 6d., say E26. That is at the rate of ls. 6d. per foot: S.T.R.