HINTS FOR HAULIERS.
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Further Comparisons of the Circumstances of the Owner-driver with One Lorry and those of the Non-driver-owner of Three Lorries.
WE ARE NOW in the closing chapter of our long series of articles written to help the inexperienced haalier (inexperienced in business, but with plenty of driving lore) to compile a proper statement of his working and operating costs, that he may correctly estimate his hire charges, and thus avoid the pitfalls—the last of which is bankruptcy—which have ruined so many who have started hopefully in this business since November, 1918. ,
Our concern, in the course of writing the last three or four articles, has been those special expenses which, although they have nothing to do, strictly speaking, with the operation of the lorry, are certainly unavoidable in cases where the lorry is the sole business • concern of its operator. Such expenses are variously known as establishment charges, overhead, or on-costs. It has been shown that these coats are greater, per lorry, when „three vehicles are run than when only one is owned, provided that the latter is driven by its owner. In our most recent article it was proved that the difference is more apparent than real, particularly in the case in which the owner of three does no driving, but devotes his time and energy, in the main, to obtaining loads for his vehicles. By increasing his paying mileage per week, he is able to reduce the effect of his heavy overhead charges and bring his profitable hire charges per mile down to the same level as his one-lorry competitor. In other words, he so regulates his business that his increased production (of miles travelled) enables him to sell those miles at a less rate.
What the Three Different Types of Owner Will Earn.
There are however, other aspects of the matter which are worth noting. We might, for example, take a look at the respective earnings of the three classes of haulier. To facilitate our investigation of this matter, the table from the last article but one is reproduced on this page, for ease of reference. This table shows the rates per mile for the hire of a 3-ten lorry which, we have assumed, costs a shilling a mile to run, and £6 a week for its keep, or standing charges. Case 1 on the table refers to a single vehicle owner who drive his own machine ; Case 2 to an owner of three, who drives one of them himself ; and Case 3 to a non-driver-owner of three lorries.
We will imagine, first, that a man in each class is doing 250 miles a week with each of his vehicles, and that each is fortunate enough to be able to obtain the rates specified in the table, which are calculated to bring in a net profit of 30s. per lorry. Then the Cr Case 1" man will get 30s. plus 23 10s., his wage as driver ; total 25 a week. Case 2 will get 30s. per vehicle (24 10s. in all), plus 23 10s. wages, total £8. Case 3, 24 10s. plus his wages as manager, which we have set down at £5; total £9 10s. Even at the most favourable rate, therefore, it. certainly does not follow that the man with three lorries is going to get an income three times as great as the man with only one.
It is, however, most unlikely that a man will be able to charge higher rates on haulage contracts just because he happens to own three lorries as against his competitor's one. It would not be difficult to imagine the expression on the inquirer's face if he were offered that explanation of increased rate. So long as our .social system remains in its present state, with a negligible proportion of philanthropists, and such a large proportion of people who want, if not something for nothing, at least as much for their money as they can get, so long will it be the case that, other things being equal, the man who offers the cheapest service will not only get the orders, but set the price for his competitors.
Supposing, therefor, all three had to work at the cheapest rate, and still did not exceed 230 miles a week. In that case, the earnings of "Case 1" man would remain, as before, 25 a week. Those of Case 2 will be diminished by 250 times the difference between the rate he sill have to accept. namely, Is. 8.84 a
mile, and that which he should get, in order to maintain his profit at 30s. per lorry per week, namely, 1s. 9.2d. That difference is 250 x 0.4d., namely, Bs. 4d. per lorry, 25s. in all, and his total earnings will drop to 26 156. "Case 3" man, in the same way, would lose 1.6d. per mile, 21 135. 4d. per vehicle, or 25 a week, making his total earnings only 24 10s. a week, less than that of any of the others.
On the other hand, in order to bring their earnings back again to the same level, "Case 2" would only need to find another dozen miles more work a week for each lorry, and " Case 3" another 32 miles per week for each, in order to bring their earnings up to standard again. It may be advisable, before leaving the subject, to reassure those nervous readers who are engaged, or thinking of becoming engaged, on work which, by reason of its conditions, involves but low weekly mileage. It may appear to them, from the foregoing, that the prices which they would be compelled, to quote would be so high as to eliminate any chance of their obtaining the business. That is not so. for on work of that kind it is customary to quote by the day.
This is the concluding article of the present series. In the next one I propose to summarize all that has gone before, indicating briefly the conclusions of each article, and giving the date of Publication of each, so that not only will the reader of next week's "flints" have the gist of the information before him in the one article, but he will know where to lookfor explanation of the points which, standing alone. may not seem altogether clear. THE SKOTCH.