HINTS FOR HAULIERS.
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Standing Charges Now Considered, in the Same Way as Running Costs have been Dealt with During the Past Few Weeks.
STANDING CHARGES do not present the same , difficulty with regard to their collection as run: fling ' costs. The latter, ns I have shown in my last contribution, involves careful collection of invoices for materials bought day by day, and in calculation of the incidence per mile of expenditure which occurs only at comparatively long, indefinite, and irregular intervals. In some cases, too, corrections have subsequently to be made after months of reckoning, because the preliminary calculations, which are necessarily based to some extent on assumption, were wrong.
Now standing charges, as I-have already explained, are the iterns of expenditure in connection with the operation of a motor vehicle Which .are ineurred. whether the mileage covered by that vehicle per week be much or little. They include the . following :— (1) The cost of licenc.es for the vehicle and for its driver (or driver and a mate, in the case of most steam wagons); (2) wa:ges of the driver, or, again, of the driver and mate, as the case May be ; (3) rent and rates of the building in which the vehicle is housed, or, if it be stored with a garage proprietor, the cost of such storage • (1) insurance' including, besides that of the vehicle, that of the driver and the pas,. ,
sengers carried, if any, and of the garage; and (5) ' , interest on first costof the vehicle. _
Costs which are Obscure.
As regards the actual amounts which comprise these items, every haulier will be aware, without much calculation, of the sums which he has to spend on such things as licences and insurance. lie knows, too, what he pays in wages, but may in certain circumstances be a little hazy about allowance for rent and rates, and probably does not ,realize at all what is meant by interest on first cost.
I will touch briefly on licences and insurance first as being less likely to lead to argument. The licences for the vehicle may be purchased quarterly or annually, the cost of a quarterly licence being rather more in proportion than that of an annual one. For our purpose, it will be necessary in all cases to reduce the items to a weekly basis. To that end, therefore, divide the amount of the quarterly licence by 13, or that of the annual licence by 52, and the result will be the weekly standing charge for that particular item. The driver's licence, which must also be added, will not amount to 2d. a week.
Insurance premiums are, as a general rule, paid annually; the total of all those which the haulier pays in connection with his vehicle, driver, passengers, or garage for that vehicle should be added together and the total divided by 52.
Dealing with Overtime and Mate's Wages.
The next item—wages—is complicated a little in several Ways. Considering first a petrol vehicle, in order to eliminate consideration as to whether a mate is employed or not, there still arises the question of overtime, payment for which varies the actual weekly wage and prevents it being, as an item, set down in advance. This makes it necessary for wages to be entered up week by week dist-they. fall due. In connection with steam wagons, where •a driver's mate is employedl his wage must be divided, part of it being set against the lorry as a standing charge, and the remainder as an establishment or organization expense, with which T will deal later on.
About half +be mate's wages only should be charged to the vehicle. This condition is only applicB28
able in the case of steam wagons, in which the mate is necessary as an assistant to the driver. On a petrol lorry a mate, when employed, is necessary only on account of the conditions of loading and unloading. No part of his wage may fairly be set down as an expense in connection with the operation of the vehicle. The same remark applies to the wages of a conductor of a motor omnibus or a motor coach. They do not go down as standing charges, being part of the organization expense ; the conductor, like the mate on a petrol lorry, has to do only with the load.
The Owner-driver and his Driving Remuneration.
There is one other point about wages, a muchdebated 'one, amongit small haidiers. The ownerdriver often appears to consider that, as he pays no wages, he need not reckon that item as an expense. Really, there is hardly anythiag more absurd than this idea. The sensible owner-driver will at least pay himself standard wages, and• if he is to be any, better off than he would be as the driver of a vehicle for Someone else—and presumably he wishes to be better off—thenhe must make aprofit in addition. Only by knowing whether he has made a profit or loss after he has paid himself a standing wage can he realiZe whether his business is worth while or not.. If he is satisfied with the wage and with the knowledge that he is his own boss, well and good ; he need make no profit on his venture, but even in that case there is no reason why he should deceive himself by writing down his wages as profit and deleting that particular item from the standing charges.
Bear in mind, too, that, if he does proceed on these lines, he is, as a matter of fact, paying pretty heavily for the privilege of being his own master, since he has to shoulder the expense and responsibility of owning a motor vehicle and running a business as well. It is certainly very necessary for him to realize just what that responsibility involves in the way of establishment charges, standing charges, and so on, as otherwise he may come an unexpected cropper. I shall refer to this particular matter again later.
A similar state of mind often exists to a lesser degree with regard to the item of rent and rates in those cases when the owner has a shed or outbuild ing, part of his dwelling, in which he keeps his vehicle. His expense. for this item appears to be nil, because he has not, on that account, to put his hand in his pocket once a week or once a month. He forgets that if he did not actually have to use the shed himself he could almost certainly let it to someone else for the same or a similar purpose at a fair rent. A few shillings a, week must be set apart as a standing charge against the vehicle on this account. There now remains only the item of interest on first cost. This is the amount which the sum spent On the lorry would bring in if it had been otherwise invested. Generally, it is calculated at a rate of interest 1 per cent. above the Bank Rate, which now stands at 2 per cent. 10 calculate the amount of the standing charge under this item, reckon 4 per cent. of the initial cost of the vehicle less tyres, and divide by 52 to get the weekly value
This completes my notes on standing charges, which may be tabulated in the same way as that which I .suggested for running cost.
Table 4 is a dummy, a-nd Table 5 an actual application of the method in connection with a 3-tonner. THE SKOTCH.