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Analysing Road Transport Operations
Page 85
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UNTIL recently, the author, Mr. W. A. Winson (a vice-chairman of the C.M.H.A., and chairman of S.P.D., Ltd.), was entirely a user of transport. Now, in many respects, his position is that of an ordinary carrier, as he must be competitive with the latter in the matter of rates and service.
He refers to the surprising absence of text books, and acknowledges the valuable work in the matter of goods motor cost done by this journal in producing The Commercial Motor Tables of Operating Costs, which, he believes, are in common use wherever road transport is intelligently directed. These Tables are invaluable to the operator, whether he be a haulier or ancillary user.
Ascertaining Per Unit Cost.
The user wants to ascertain the burden per ton or per unit of transport cost upon his business. If he be contrasting out all his traffic this is simple, but if using his own vehicles or hiring, the problem is not so easy, unless his operations are straightforward, such as haulage between two given points.
It is not difficult to imagine the circumstances in which the greatest amount of unnecessary movement would produce statistical results indil eating high efficiency. Some interesting examples of these are given. Many a wrong method of calculation has resulted in private ownership of vehicles which could not otherwise be justified.
To make a department within an industrial organization responsible for one form of transport and set it up in competition with departments responsible for other branches of transport is to ask for trouble and deception— probably quite unconscious.
A trader's statistics must be made up to ensure that the actual burden per ton of traffic can be ascertained. In the case of an organization collecting from. many points and distributing widely, statistical analysis of operations is very complicated.
In the case of one large organization it was decided that a fair way of isolating the cost of delivery from warehouse to shop was to charge up such movements as cartage from point of origin to warehouse at the lowest rates chargeable by any contractor performing this service. In regard to cartage into warehouse and from warehouse to railway or wharf, it was decided to take into account the costs of these operations and add them to the cost of movement from railway or warehouse to shops, dividing the total only by the tonnage actually despatched from terminals to shops.
Choice of Transport.
The author's experience is that it is impossible to lay down any general principle as to the choice or otherwise of privately owned transport. The theory that one is able to keep the profit that would otherwise be made by the haulier does not hold water ; everything depends upon circumstances.
Of primary importance is the efficiency or otherwise of the operations of a fleet. It divides itself into two parts; first, as to whether the vehicles be maintained and run most efficiently ; secondly, whether the services they render be efficient. The first is primarily a matter of costing. The author refers again to The Commercial Motor Tables of Operating Costs in this connection.
In order to ensure complete cover against extreme emergencies (one of which is the increasing possibility of losing a goods-carrying licence), a more or less savage depreciation should commence from when a vehicle comes into the second-hand category.
Planning Depreciation.
In other words, depreciation should be so arranged that the book value is reduced to second-hand value at the earliest moment. This is drastic, but • vehicle life from the financial point of view is substantially lower than it has been—expectation of life has been drastically curtailed by the cancer of legislation. A second consideration to ensure full advantage from modern development, is depreciation against obsolescence. Both proposals would result in depreciation vastly in excess of that demanded by the potential useful life, and it is customary to compromise.
It is a matter of contention between engineer and operator as to whether the right policy is to prolong the life. of the vehicle, or merely execute repairs necessary to keep it up to a standard which will enable it to live out its calculated life. The author believes it better to arrive at a formula which will go as far as possible towards making the potential life coincide with the emergency and obsolescence factors.
There is value in the occasional use of ton-mile statistics, hut he cannot see that their regular production is worth the expense.