Rates for Varying Leads
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"The Commercial Motor" Costs Expert Deals With an Inquiry Relating to the Use of a 6-ton and a 10-ton Vehicle on Hauling Road-making Materials over Distances of from 1-25 Miles: Heavy Fuel Consumption Considered as a Factor Affecting the Scaling of Charges IRECEIVED a letter a few days ago from an operator who had two vehicles, a 6-tonner and a 10-tonner. Nothing was said as to whether the vehicles were oilengined or petrol-driven. I shall assume, in the first place, at any rate, that the Smaller vehicle is petrol-engined and the other an oiler. The writer of the letter had been offered a contract to carry road-making materials over distances of from one to 25 miles.
His vehicles are tippers. They are one-man operated and the loading is by chute. He has been asked to quote a price per ton and finds himself in a difficulty because he wants to quote a price which will be just as profitable when the 6-tonner is used as when the 10-tonner is employed. He tells me that he reckons on an average speed of 25 m.p.h., except for the shortest runs, where the speed may fall to an average of 12-15 m.p.h. On the very short runs about 5 m.p.h. is likely to be the best the vehicle can do. I shall have a word to say about the intention to average 25 m.p.h. with the 10-tonner, but that will be later in the article.
Weekly Mileage
The reader will appreciate that in this matter there are two main problems. There is, first of all, the difficulty of quoting a flat rate per ton when two types of vehicle, differing so much in capacity as these two, are to be employed. Again, there is the difficulty of assessing the weekly mileage when the journeys differ so much in length for, although it is true that this haulier has been asked to quote on a tonnage basis, nevertheless he must arrive at some idea of the probable weekly mileage before he can estimate his own costs, and from them the rates he must charge to show a profit.
First, I propose to show what is the effect, on costs, of the size of vehicle employed. To facilitate the preliminary calculation I will begin by taking, as an example, the case when the lead length is five mites only, that is to say, five miles out and five miles home. The complete journey involves 10 miles of running. The time needed for loading and unloading is mentioned and stated to be a t.-hour all told. I cannot take that, as there are always terminal delays not included in his estimate, such as taking turn at the chute and arranging where the load is to be dropped. These things take time and for a 6-tonner I shall take it that 4-hour -is needed to cover terminal delays from whatever cause.
Round Journey
The total time for a complete round journey is thus one hour. That allows for an average travelling speed of 20 m.p.h. On that basis eight journeys will be possible each day which is equivalent to 44 trips in a week. The total weekly mileage in these circumstances would be 10 times 44, which is 440.
Now for some figures for cost of operation. The petrol consumption will be around 9 m.p.g. To readers who have had no experience of this particular kind of traffic this may 'em excessive. The new reader and the newcomer to this sort of work should be advised that in all probability the engine will not be stopped at either end ofthe journey. No blame attaches to the driver on this account, for he B30
will most likely be engaged most of the time in manaeuvr• ing into position under the chute or getting int( position for tipping where the foreman of the road-rnakim gang wishes the stuff to be put. The engine will have to bi run to drive the tipping -gear. The consumption of engin' oil will also be in excess of average in something RI the same proportion whilst, as is nearly always the vas' when dealing with road-making materials, the vehicle wil have to go into unmade roads, with corresponding rapit wear of tyres; that item of running cost will therefore hi rather more than average.
Rranning Costs
The running costs for this 6-tonner operating under thest conditions are likely to be something like the following The figures are per mile run: petrol, 54d.; engine oil, id. tyres, lid.; maintenance, 2d.; depreciation, 24d, The tota is 114d. per mile.
The standing charges will approximate to the following licences, 14s.; levy, 4s.; wages, in a grade 1 area, and witl provision for the employer's proportion of the payments or account of National Insurance, W.C.A. and holidays witl pay, £7 5s.; rent and rates, 7s. 6d.; insurance, 15s.; interes on the capital laid out on the vehicle, 14s. The total £9 19s. .6d.
The running cost per week, when the weekly mileage 440, must be 440 times 114d., which is £21 Is. 8d. The tota operating cost is the sum of these two, which amounts tc £31 Is. 2d. As that is cost only 1 must add something foi profit and establishment costs. I take these to be £3 pei week, so the total expenditure, standing charges* runnim costs, and establishment expenses, is £34 ls. 2d.
The question of profit now arises. If I take if that a fail margin is 20% on cost, the profit per week will amour to £6 165. 3d. The weekly revenue, necessary if that profi is to be made, must be not less than £40 17s. 5d. The rate for the 264 tons which are carried on those 44 journeys must be not less than 3s. lid. per ton.
Terminal Tune
When using the larger vehicle the journey will take longer In the first place it will not be possible, as my inquire] assumed, to average 25 m.p.h. My rule, in all these calcula. tions, is that the law must not he infringed. The maxim= legal speed for the 10-tonner is 20 m.p.h. I should expec the terminal times will be more than for the smaller vehicle l-hr. instead of 4-hr. The travelling time for the 10 mile: involved in this five-mile lead I shall take as 4-hr. Tin fatal time for the round journey will thus be 14 hr. Tht number of journeys per day will probably be five.
I will take it that the number of journeys per week wil be 28. The weekly tonnage will thus be 280 and the weekl! mileage the same, 280. The operating costs will be a. follows, bearing in mind, again, that the consumption of of fuel, lubricating oil, tyres and cost of maintenance will bi more than, average, because of the conditions of operation For oil fuel, I should think 12 m.p.g. is a fair estimate. Thi figure may be lowered if the driver is careless. The runnini costs can he assessed as follows: fuel 31d.; lubricants, id. res, 21d.: maintenance, 21d.; depreciation, 4d. The total Is. Id. per mile.
For standing charges take the following: licences, £2 4s.; vy, 8s.; wages, grade I and including provision for insurice and holidays with pay, £7 15s.; rent and rates, 12s. 6d.; surance, is. 6d.; interest on capital outlay, £2. The
• tal is £14 7s. The total running cost per week is 280 aileage per week) times is. Id., and that is £15 3s. 4d. so at the total cost of operation-heat in mind that this is )st only, not charges-is E29 10s. 4d.
For establishment costs I take £4 per week so that the and total of fixed costs, is £33 10s. 4d: For profit at 20 cent. I must take £6 14s. 2d. and the minimum figure or the weekly. revenue must be £44 4s. 6d. The minimum tie per ton is just short of 3s. 2d. 'which does not differ any appreciable extent from that calculated for the' tanner. That is for a five-mile lead and must not be taken ;.generally applicable, There are appreciable differences, ; I shall show, when the lead mileage is increased.
Over a longer lead, say 25 miles, the superiority of the rger vehicle becomes more apparent. The figures for the • tonner over that distance are as follows: The time will mnprise.. the terminal delays, which should be the same ; before, 1-hour. The time for the 50 miles of travelling' ill be about two hours and the total per complete journey, hours. On that basis there will be three journeys per ay and one an Saturday, making 16 in all per week. The eekly mileage will be 16 times 50, which is 800. The nonage per week will he 96.
Establishment Expenses
Now for the cost. The standing charges will remain naffected by the increase in the lead distance and the eekly mileage. The total per week will be £9 19s. 6d. The ;tablishment expenses too, will be the same, that is, £3, laking £12 19s. 6d. for the fixed expenses per week. The inning cost per mile will stay at li1d. so that the nal running' cost for the 800-mile week will amount to 38 6s. 8d. and the total cost £51 6s. 2d. It will take a trther £10 5s. 3d. to make a profit of 20 per cent. so that le weekly revenue must be £61 Its, 5d. The tonnage irried, 96 tons, divided into that £61 us. 5d, shows that le rate per ton must be not less than 13s. 4d.
Now for the 10-tonner. If it does not exceed 20 m.p.h. s average speed will not be likely to exceed 16 m.p.h.. ) that the travelling time for the larger vehicle will be just ver three hours. Add i-hour for terminals and we get hours in all per trip. That means that the total number f journeys per week will be 11, two each day up to Friday ad one on Saturday. The weekly mileage will be 550 and se running' costs per week 550 times is. Id., which is 29 15s. 10d. The standing charges remain unaffected at
£14 7s. and the establishment costs at £4, so that the total expenditure per week is £48 2s, 10d.` Add profit, again at-. 20 per cent, on cost,, which is £9 12s. 7d. The weekly revenue Should be not less than £57 15s. 5d. and the rate per ton 10s. 6d.
The full schedule of rates for distances up to 25 miles should be, from one to five miles lead, 3s., rising by 61d. per additional mile lead to 138.4d. at 25 miles, reckoning on the figures for the-6-tonner. Taking the figures for the 10-tonner the schedule of rates should be 3s. per ton from one mile lead to five miles, rising therefrom to 25 miles by 4-id. per mile.
Little Difference
• While compiling the above figures for operating costs it occurred to me that there was a small difference between the running costs of the 6-tanner, at 110. per mile, and those of the 10-tonner at is. Id. Then I realized that part of the reason for there being so little between them was because J had assumed that the smaller vehicle was petrolengined, whereas the 10-tonner had been assumed to be an oiler. Actually there is no doubt about the 10-tonner being oil-engined. There is not the same surety about the 6-tonner although I imagine that the number of 6-ton Petrolengined lorries being acquired today must be a very small percentage of the whole.
The question arises, where would the .6-ton vehicle come in this comparison of rates if it also had an oil engine? The essential information about the cost of running an oil-engined 6-tonner is as follows. First the standing charges: licences, 14s..; levy, 4s.; wages, etc., £7 5s.; rent and rates, 75. 6d.; insurance, 15s.; interest on capital outlay, 18s. The total is £10 3s, 6d., 4s. more than that relating to the petrol lorry. The difference is due to one item only, that of interest on first cost.
For the running costs take the following figures; Fuel, 21d.; engine oil, id.; tyres, lid.; maintenance, 2d.; depreciation, 21d. Total, 9d., comparing with 1.11d. for the petrolengined machine.
The running costs on the five-mile lead now .become: 440 times 9d., which is £16 10s. The standing . charges. of £10 3s. 6d.; establishment costs, £3, the same as before; total, £29 •13s. 6d. Add £6 for profit, and the minimum weekly revenue is seen to be £35 13s. 6c1,, which is 2s. 8d. per ton.
Over the 25-mile lead the running costs amount to £30
exactly and, with standing charges at £10 3s. 6d., establishment costs at £3, the total expenditure per week whilst carrying 96 tons is £43 3s. 6d. Profit at 20 per cent, amounts to ER 12s. 6d., so that the revenue per week must be £51 16s, The rate per ton needed to make that profit is 1Crs.
S.T.R.