Problems of the
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HAULIER and CARRIER THAT was a most interesting letter from Mr. Donaldson Wright which was published in the issue of The Commercial Motor dated November 2. He was kind enough to be complimentary to me. Many Ilunclreds of readers will be aware that I have, time and again, held up as a model Mr. Donaldson Wright's methods and his way of conducting his clearing house. I shall continue to do so, notwithstanding the difference of opinion, which has arisen regarding this question of parcels carrying.
His letter may be read, in conjunction with this short seriers of articles, as a most valuable contribution to the discussion of the possibility of profit-making from the collection and delivery of parcels. I hope I may not seem to be attempting to run with the hare and hunt with the hounds if I state that, in my view, Mr. Donaldson Wright is correct in his attitude, but that I am still of opinion that my own actions were just as right.
An owner-driver of a speedy vehicle can operate what I might call a personally conducted parcels-collection and delivery service over a 100-mile radius and make a satisfactory profit at the rates I quoted. My answer to the inquiry which was the cause of all the bother was, therefore, appropriate. The principal justification for it is afforded by that very factor which is actually quoted by Mr. Donaldson Wright himself, namely, overheads, which, in the case of an owner-driver operating a simple round, are comparatively low.
I have, in dealing with a reader's inquiry, to consider two main factors—those of profitable rates fl3r the work which he proposes to undertake and the prospect of success. In dealing with that particular inquiry, I quoted rates which, in the circumstances, will show a satisfactory profit. The prospect of success does admittedly
depend upon the man, but if he be energetic and attentive to his business they are quite good enough.
I am, further, quite certain that I did not, in respect of that particular inquiry, encourage unfair competition with such organizations as the concern of which Mr. Donaldson Wright is managing director. The orbits of the two types of business do. not cross. The ownerdriver, with his personal collection and delivery, cannot compete with the large type of organization, because he cannot offer the same country-wide delivery. He has only a certain limited round. In fact, it is more than likely that the parcels he collects and delivers would not otherwise be sent by road.
A year ago, Mr. Donaldson Wright might, with reason, have objected that, by encouraging owner-drivers to carry parcels at rates lower than those of the big organizations, I was preparing the way for a deluge of owner-drivers to enter into the lists and thus collectively create a certain amount of disorganization in the parcels-carrying section of road transport as a whole. To-day, that objection is non-existent, because licences would not be obtainable in significant numbers.
Mr. Donaldson Wright has misunderstood me if he thinks that I believe that a comprehensive parcels-delivery service can be operated without an organization. On the contrary, I am deeply impressed with the intricacy and comprehensiveness of organization, without which such a service could not function at all. I do, however, state that, in the case of an owner-driver operating a simple round of calls, the need for organization is practically eliminated. It is chiefly because of this difference that I maintain that the two classes of business are not comparable.
Table 1 from the previous article is reprinted this week so that I can continue my investigations into the possibility of profit-earning from the scale exemplified in that Table. In the previous article I showed that if all the business was done in the smallest size, namely, parcels weighing less than 14 lb. and chargeable at only 4d. each, it would not show such profit as I specified.
Now, to go to the other extreme, it is of interest to take, say, a parcel weighing 5 cwt., the charge for which is 3% 4d. In order to bring in a daily revenue of E2 10s., which was the amount I stipulated as a minimum, 15 such parcels would be sufficient. The collection and delivery of 15 parcels within a radius of three miles can, in all but exceptional circumstances, easily be accomplished within a working day, leaving time to spare. _ That means, in a sense, that, if 15 parcels could be collected and delivered (I appreciate that the vehicle may
• not carry all the 15 at once and that it will be a case of setting down some of the parcels before others are taken on), then there is still a chance of earning a little more, additional to the £2 10s., before the day is over.
The rate for parcels of that size, therefore, appears to be profitable. Clearly, the typical parcel, which, if it be the average carried throughout a day, will earn the requisite revenue, must be mid-way between the smallest and one of about 5 cwt.
In order to ascertain what size that parcel must be, it is necessary to begin by aisuming an average number of calls and then see what size parcel will, at the price named, give the minimum revenue. In considering the possible number of calls, only experience is of any use as a guide. Some hauliers have told me that they can make 150 calls in a day. I imagine, however, that it is not practicable to assume more than an average of 100.
If, as I have been assuming up to now, one parcel necessitates two calls, only 50 parcels can be dealt with in a day, so that the average price must be Is., which means, according to the schedule, that the weight must be somewhere between 1 cwt. and 2 cwt.-which is absurd. That is definitely not the average weight of parcel which a parcels carrier collects on a round such as we are discussing. In practice, the haulier usually collects several packages at a time, and it is not unreasonable to assume that 100 calls will account for 100 parcels, bringing the average price to 6d., which is the rate for 28-lb. parcels.
Even that is larger than it is fair to expect, and, although the presence of a few bulky consignments at the special rates would help, bulky parcels are, generally speaking, not worth carrying, even at those special rates. On the whole, I think it is fair to conclude that the schedule is low. It would be better if the minimum parcel was "up to 7 lb.," for which the charge should be 4d., and all the other rates be increased accordingly by id. each. At present, I should imagine that the operator using this schedule is making a profit, but not
the minimum which I think desirable. S.T.R.