Problems of
Page 58
Page 59
If you've noticed an error in this article please click here to report it so we can fix it.
THE HAULIER AND CARRIER
CONFESSION, they say, is good for the soul, so long as you mend. Well, I have a confession to make and I certainly promise to mend my ways, at least to the extent of not making the same mistake again.
It seems that, in an article appearing some weeks ago, in the course of which I was dealing with the problem of an inquirer who owned three vehicles, and whose establishment charges, according to his own figures, totalled £6 per week, I saddled one of his three vehicles with the whole of that amount, instead of, as should be done, distributing it fairly evenly over the three. For that error, as I say, I apologise and hope never to repeat the offence.
At the same time—and here's a further confession—I should not have referred to the matter here, but for the fact that another inquirer, an old friend of mine, who, up to the present, has had only one vehicle, which he has driven himself, is now considering the purchase of another, or possibly two—it all depends on whether he gets a certain contract which is, so to speak, in the offing—and has asked me how his establishment charges would be affected by the change.
Now that is an interesting subject and one which, as I know, often puzzles hauliers, if only to the extent of making them wonder if the large concerns, with many vehicles, can operate more cheaply than can the small man, because their establishment charges, if not less on the whole, are, at least, less per vehicle.
Incidentally, this particular topic follows conveniently after the discussion just concluded, in which I dealt with the question of establishment charges, in response to an inquiry by an owner-driver.
The establishment costs of the small haulier may comprise the following items :—Rent of office, telephones, lighting and heating, stationery, postage and telegrams, upkeep and depreciation of office furniture, travelling expenses, advertising, legal expenses, insurance of office furniture and effects, income tax and sundries. In certain circumstances some of these items are not necessarily included. An owner-driver with a personal clientele, or with a round of customers built up as the outcome of personal recommendation, would have to face expenditure on, say, only stationery and postage, occasional legal expenses and, let us hope, income tax.
It may be as well to remark here that his economy B40
'n respect of establishment expenses is not of necessity something on which he should he complimented, for it is more than likely that his Jack of enterprise will result in his always being a small haulier with one vehicle. At any rate, it is a fact that so soon as he purchases a second vehicle, he almost automatically becomes liable to the rest of the -items enumerated above.
The increase in expenditure will, therefore, be more marked in his case than in the other, where a miniature office is already in existence. The difference between the circumstances of the two types of haulier is shown by the folloWing table, in which are scheduled the establishment costs, in accordance with the foregoing description :—
Now it is possible to set out an approximate increase per vehicle. I will do so, provided that the reader really understands that the figures are only approximate, and may be affected, and the amounts altered, by any one of a number of circumstances. The only safe guide, as I have stated again and again in these articles, is for the I.eader to keep careful accounts so that he himself knows what his expenses really are. My articles are devised more in the nature of warnings, to provide against the risk of readers overleoking the existence of these costs, than as actual guides to the amounts involved. On that understanding I will go ahead and indicate what increases the one-vehicle haulier may expect when he begins to add to his fleet.
First of all it should be realized that there may be an additional item, namely, the wages of a clerk to be present in the office to take and deliver messages. Preferably he will be a junior typist who can type letters and make out accounts. There will be about £1 per week for that. The telephone charges, will increase by about 15 per cent., advertisement costs about 50 per cent., legal charges about 50 per cent., stationery by, say, 10 per cent, and income tax— what shall we say Tor that? For the sake of argument allow 20 per cent. per vehicle for the increase of income tax, with a hope that it will.be more.
These increases are set out in the following table, which shows the figures for cases where there is one vehicle and where there are two, three and five machines; to make the comparison more complete I have included those of the owner-driver with one vehicle and no office The actual amounts per vehicle may now be calculated from the totals given in Table II. Ignoring the owner-driver with no office, for the reason that I have already given, then the establishment chargesher vehicle are: for the one-vehicle haulier, a per machine; for the two-vehicle haulier, £1 16s. 3d. per machine; for the three-vehicle man, 8s. 4d.; and for the five.
vehicle owner D. is. Dd. (to the nearest penny).
Now, at first glance there seems to be a margin in favour of the man with more than one machine--not a big margin, it is true, and certainly not one which is going to make a lot of difference to a quotation relating to a job involving, say, 500 miles per week, the quotation being per mile run, but one which I must, nevertheless, take some account of in dealing with the matter. Actually, however, the margin can easily be shown to be negligible, if not to operate in the opposite direction.
In the foregoing figures I have taken no account of the fact that, as the fleet grows, the proprietor will wish to devote some of his time to the organization and management of his business. When he has only one machine he does the same, it is true, but the organizaton of the work of one machine does not involve anything intricate in the way of management.
So soon, however, as a second machine is put on the road, there is the driver of that machine to consider. He has to be given instructions: steps have to be taken to see that he carries out his instructions and that he renders a proper account of his work. All that involves extra work and, if the labourer -be worthy of his hire, the proprietor of the business will deserve some extra consideration for it.
When a third machine is put into commission the managerial work is increased in greater proportion, and when there are five it may well be that the proprietor will find he has to devote the whole of his time to it and must engage a driver for each machine.
If we can take it that a fair remuneration for this work is the difference between the amounts quoted for totals of establishment charges and those which would be incurred if every vehicle had to be debited with £2 per week (the charges in the ease of the one-vehicle owner), then there is no difference at all between the establishment charges of the one-vehicle owner and those of the man who is running five machines. The "management expenses," as I may call them, would then be, for the two-vehicle business, 7s. 6d. per week, for the three-vehicle concern 15s. per week, and for the five-vehicle establishment £4 11s. 6d. per week.
The last-named amount is not extravagant if, as I imagine would most likely be the case, the owner of the business found that he was unable to make time to drive and had to devote himself to management.
S.T.R.