Drop-Sided Lorries on
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MUNICIPAL HAULAGE
/N my article published in "The Commercial Motor," for last week, I dealt in detail with the cost of operation of tipping vehicles engaged in work for municipalities and similar civic authorities. I pointed out that, generally speaking, the. cost of operation of this type of vehicle was much greater than the average and.! quoted reasons why this was so. The figures for cost of operation were used as a basis for assessing rates which operators should quote for the hire of such vehicles on an hourly basis; I concluded the article with a promise to deal with drop-sided lorries operated under similar conditions.
An initial difficulty which was discussed in the previous article was the wide variation in the purchase price of vehicles suitable for the purpose. It would at first seem that the dlerence in outlay involved would cause a corresponding difference in the rates to be charged and in that way would act as a deterrent to the assessment of rates which could be widely adopted. I showed that that was not the case, because, in general, the purchaser obtained value for money and gained advantages in respect of diminution in the amount of de.preaiation, which off-set the increased cost and practically levelled its incidence in regard to these rates.
Average Life Four Years
In assessing depreciation of tipping vehicles I assumed an average life of four yearsfor a vehicle the cost of which was about the average. Four years is not too short a life to assume, having in mind the arduous work which tippers are called upon to perform, a condition which, as I pointed out, affects the operating costs generally. Petrol consumption in particular is high.
It would be above average, in any case, because of the preponderance of short hauls and the frequency of stops. In addition, however, there is the fact that, with poweroperated tipping gears which are now univergal, the engine is running for quite a proportion of its time while the vehicle is stationary and that, of course, increases the apparent consumption of fuel per mile run.
The cost of tyres, too, is much greater because in the majority of cases these vehicles are run off the roads into quarries and on building sites where the tyres are apt to suffer severely. As regards this point, I know that it is a practice of quite a number of operators of tipping vehicles to purchase cheap tyres, retreads and the like, for this work. On first consideration there might not seem to be any point in this, as the general attitude towards tyres is that firstquality material gives first-class returns.
Second-class Tyres an Economy
There is this about it which is the reason why these Operators prefer cheap tyres: tyres wear on tipping vehicles and other machines engaged on similar work, not because of the running they do, but because of cuts and tears sustained in the treads and walls as the result of encountering sharp flints and other destructive material which lie about on the ground they have to traverse. The point is that good tyres are just as liable to be cut as poor ones, and in truth they do not last any longer, so that in that way there is an economy in the use of second-class tyres for this kind of work. Even so, the cost of tyres on tipping vehicles can generally be taken to be 50 per cent, above average and that is the figure I used in the previous article.
B.20 As regards maintenance, every experienced operator will agree that the cost of repairs to both chassis and body is considerably enhanced on account of the conditions of operation. More often than not the vehicle is expected to tip its load with one wheel in a deep rut and the other on solid ground with the result that when the tipping gear begins to operate, the gear itself, the chassis, and the body suffer strains and stresses far beyond those which they are built to withstand.
And again the wear on the transmission, and the rear axle in particular, is excessive because of the frequency with which the vehicle has to pull out of soft ground when fully loaded. Indeed, there is no item of running cost which is not considerably greater in the case of tipping vehicles than it is with one of the non-tipping type.
Initial Cost Variation
I shall now deal with drop-sided lorries, their cost of operation and the rates to be charged per hour in a manner similar to that in which tipping vehicles were dealt with in my previous article.
The first thing to note is that precisely the same variation in initial cost applies to lorries as it does to tippers. There is perhaps an even greater variation because the difference between the manufacturers' list prices for tippers and dropsided lorries varies as between one maker and another. Generally speaking, the price to be paid for the lorry is less than that for a tipper, and I have taken a middle course. The amounts which appear in Table III for the first:cost of new drop-sided lorries of the capacities named are the mean between the highest and lowest quoted by a variety of manufacturers.
The next point to be considered in comparing the cost of operation of lorries and tipping vehicles is the item of depreciation, or more particularly the period over which that should be calculated. It should be appreciated that the work which is performed by lorries is not so arduous as that done by tippers. It is, nevertheless, more arduous than that done by vehicles engaged in ordinary commercial transport.
Shorter Depreciation Period Quite a considerable proportion of the traffic carried will be sand and -gravel, tarmac and the like, And the vehicle will frequently have to collect from quarries where the material is loaded into the vehicle by chute and is dropped from a considerable height. That cannot but have a bad effect on the bodywork if not on the chassis, and however good the arrangement for maintenance may be, the period of depreciation must inevitably be shortened, especially if we take into consideration the important point that as maintenance cost rises the time for disposing of the vehicle approaches more rapidly.
At the same time it has to be borne in mind that the annual mileage of vehicles engaged on this class of work is low. About 12,000-15,000 per annum is not likely to be exceeded if the vehicle be regularly and consistently engaged exclusively upon this kind of work. In according with general practice, therefore, I have assumed a depreciation period of five years. .
So far as the running costs are concerned, I have made due allowance for the special conditions of the work—short runs, frequent stops and negotiation of bad roads—and whilst the proportionate increase in respect of each item,
as compared with the average figures set down in "The commercial _Motor Tables of Operating Costs, is not so great as in the case of the tipping vehicle, there is, nevertheless, as will be noted by those who compare the figures, a moderate increase in respect of oil the items concerned.
The result of my calculations, which is based on information gathered from operators engaged in this kind of work, is set down in Table III. 1 imagine the Table needs but little explanation, certainly none in the ease of operators who have the previous article before them. In the upper portion the purchase price of each vehicle is set out: the
price of tyres is deducted, as is the residual value, which is what the operator may expeot to get for the vehicle after five years of Ilse; the resulting figure is the amount which is used as a basis for the calculation of depreciation.
The second portion of the Table gives the standing charges per week. There is nothing unusual in this, except for the fact that depreciation and estabfishment costs are included. I explained last week why I deem it advisable in a problem of this kind to regard depreciation as a standing charge. Briefly, the reason is that the mileage charge per annum is so low that it is more convenient to follow that course. I include the establishment costs so that I may more quickly arrive at the figure required for assessing the rate per hour for the hire of the vehicle. The third portion of the Table is the running cost, as usual in-pence per mile.
Short-haul Work
The figures in Table III form the basis upon which those quoted in 'Table IV are calculated. The first point to note is that I have taken five miles as being the average distance likely to be covered by vehicles on municipal hire. Actually, the distance may be greater or less, according to conditions, and if there is a difference then the operator can quite easily make a suitable correction to the Table in order to arrive at the figures he wants for his particular purpose.
Given the acceptance of an average mileage of five per hour, then the amount of the cost per hour on account of mileage is obviously five times the running cost per mile. This is calculated to the nearest halfpenny and set out as shown. The standing charge per hour is found by dividing the total of standing charges by 44, that being taken because 44 hours is the standard working week.
The total cost per hour is the sum of the foregoing two figures. That is, of course, only bare costs, although it does include establishment cost and is subject to some addition for the net profit which the operator desires to earn. I have assumed a margin of 20 per cent., and by adding that to the total cost per hour we get the charge per hour which figures at the bottom of Table IV.
It is of interest to compare these charges with those quoted
last week for tipping vehicles. The percentage increase for a tipping Vehicle over and above the corresponding charge for -a."-lorry is as follows: For the 2-toriner; 5 per debt; 3-tonner, 11 per cent.; 4-tonner, 15 per cent.; 5-tonner, 16 per
cent., and 6-tonner, 13 per cent. The average is 12 per cent. It is customary to take 10 per cent. as the increase in the charge to be made for a tipper, and that is fair enough because it is as nearly accurate as the actual calculations will enable anyone to get.
In this and the previous article, and in the Tables which accompany these articles, I have deliberately omitted any reference to the vehicle next larger than the 6-tonner in the scale of capacity. This is because the 7-8-tonner is, generally speaking, in a different class. It is a heavier machine, more robustly built, well tyred for its load, and • usually has an. oil engine instead of the petrol engine. For those who are interested in this size of vehicle, the following figures, calculated in a manner similar to those already stated, should be of interest. I take the tipping vehicle first.
Depreciation Over Eight Years
The same difficulty about price arises; the initial cost may be anything from £1,600 to £2,200, or even higher. I have taken £1,820 as my figure. The tyres fitted will be 36 ins. by 8 ins, and the cost of the set will approximate to £120. neducting that amount from the original cost leaves £1,700. If I assume a residual value of £300 and depreciate the vehicle over eight years, I get £175 as the annual depreciation, which is £3 10s. per week.
The standing charges for this vehicle thus become: Licence, £1 8s.; wages, including insurances and provision for holiday pay, ES 16s.; garage rent, 10s.; insurance, £1; interest, £1 2s.; depreciation, £3 10s.; establishment cost, £5. The total is £18 6s. pet week.
The running costs, per mile run, will be approximately as follows, making similar provision for increases over the average, as in the case of the lighter-weight vehicle: For fuel, 1.94d.; oil, 0.25d.: tyres, 1.8d.; maintenance (d), 1.26d.; maintenance (e), 1.75d. The total is 7d. per mile. If I divide the total of standing charges per week, which is £18 6s., by 44, I get 8s. 4d. Five miles at 7d. is 2s. 11d., so that the total per hour is lls. 3d. If I add 20 per cent, to that for profit, I get 13s. 8d. as the minimum charge per hour.
Turning now to consider the case of the lorry. If I take the first cost at £1,600 and make corresponding deductions as before-tyres at £120 and residual value at £380-1 get a basic figure of £1,100. For this type of vehicle a depreciation period of ' at least 10 years can be assumed. The amount of the depreciation is thus £110 per annum, which is .£2 4s. per week.
The other items of standing charges, including establishment costs, are the same as in the case of the tipper, except the interest on capital outlay which is £1 per week instead of £1 2s, per week. The total is £16 18s., which is equivalent to 7s. 9d. per hour.
The running costs are likely to be, for fuel 1.71d. per mile, for oil 0.2d., for tyres 1.32d., maintenance (d) 1,05d., maintenance (e) 1.3d. 'The total is 5.58d. per mile, and five times that is 2s. 4d. The total cost per hour is therefore Is. 9d., plus 2s. 4d., which is 10s. id. Twenty per cent. of 10s. Id. is 2s. Id., so that the charge per hour must be 12s. 2d. The difference between the tipper and the lorry is, in this case, 12 per cent. S.T.R.