RECORDS OF COSTS.
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Should the Basis Be the Mile, the Ton or the Ton-mile.
LET ME PREFACE my remarks on this subject by 'unreservedly throwing myself upon the mercy of the Editor, since I realize that what I have to say does not appear to be altogether in agreement with a recent expression of his opinion, and. that I am solely dependent on his generosity for an opportunity to state my side of the case.
In many instances, the owners of commercial motor vehicles reckon their cost of operation per vehiclemile. This in my opinion, most of them do because the circumstances are such that they can do no better, and, not because under more advantageous circumstances there would be nothing better to be done. Some, again, estimate the cost per ton moved. This is done, as the Editor tells us, when the mileage is regular, or, in other words, when the cost per ton is exactly proportionate to the cost per ton-mile, and the one can be estimated at once from the other by a very simple calculation. Reverting for a moment, one might equally well say that the estimation of cost per vehicle-mile is quite satisfactory when the tonnage is regular. In other words, when one of the two essential factors is constant and the other is variable, it is enough to take the variable one as our basis, eserving the power of introducing the constant factor by a simple process of arithmetic. Now, I maintain that the fact that the vehicle-mile is often taken as a basis does not in the least prove that it is the best Basis available in all cases. Admittedly, if a van goes out with 100 parcels and delivers them piece-meal during a long run, it is practically impossible to estimate the average distance over which the original load has been carried. If, for example, the original load were two tons and deliveries began after the tenth mile and ended at the fiftieth mile, we might, for purposes of a rough estimate, assume that the whole load had been carried for 30 miles, but this, of course, would be merely an approximation and therefore somewhat unreliable as a basis. In such a case, assuming that the work of each day is of the same kind, the vehicle-mile is a fairly Satisfactory basis on which to eAtirnate costs, presuming that we have first satisfied ourselves that the whole system of delivery is right and that we are not running any unnecessary mileage under very light or no load.
Admitting that the term " ton-mile" may be regarded as an academic one when applied to the product of the gross weight of the vehicle and its load
added together and multiplied by the mileage, should prefer to describe the figure so obtained as the number of gross-ton-miles. In this case, the ton-mile could be taken to mein the net ton-mile, its numerical value being estimated by multiplying the mileage covered by the weight of the useful load carried. If the net ton-mile be taken as a basis, the light chassis is not unfairly handicapped when compared with a heavy one. On the contrary, it is given due credit. When its weight is added to that of its load, the total is lower than the gross weight of an equally-loaded but heavier vehicle, and, other things being equal, the wear upon tyres and the consumption of fuel will be lower, and this fact will be reflected in the cost per ton-mile. In some cases, ton-mileage can be at least fairly accurately calculated. In others, it can only be estimated, because either the tonnage or the mileage is not exactly known. We can, however, generally get somewhere near the right mark. On the other hand, if tonnage and mileage both vary and we base our costs on the one without regard to the other, *e are quite certain to get a wrong basis for comparison with the performances of other vehicles. We cannot do worse than be sure of, being wrong, so is it not worth while to attempt to be right even at the risk of error? The fact remains that until or unless we know the 'distance covered and the weight carried, we do not know how much useful work a vehicle has done, and useful work is really the thing the cost sA which we require to estimate.
Suppose we have a fleet of four vehicles and are in the habit of comparing them on a basis of cost per vehicle-mile. The comparison will be unfair, both to vehicle and to driver, unless the load. on all vehicles is the same. Again, if a man in the same trade as ourselves tells us that he runs his 20 cwt. van ate. total cost of 8d. a mile and does not tell us what load it generally carries, we are only asking for trouble if we base our expectation on his figure, buy a van of equal capacity, load it up to its full carrying power, and expect to work at his figures. Very likely his average load was only about 10 cwt. In the same way, if somebody tells us that it costs him 38. a ton to move his stuff and does not tell us how far it is moved, we are absolutely in the dark, and we shall be very disappointed if we expect to get the same results when covering an average distance perhaps three or four times as great as his.
If we always refuse to calculate in ton-miles we fail to get a full appreciation of some very significant first prineiples. If We examine merely vehicle-mile costs, we inevitably come to the conclusion that the light vehicle is cheaper to run than the heavy vehicle. Take a simple case and suppose that a one:tormer under certain conditions costs 6d. a mile to run, and a three-tonne r is. a mile. The advantage is apparently with the one-tonner. Work the thing out in ton-miles and we see that the one-tonner costs 6d. a. ton-mile and the three-tonner only 4d. a ton-mile. Consequently, even if we could guarantee a full load always for the one-tonner, it would pay us still to have a three-tonner, provided .that the average load can be kept up to anything above two tons.
To my mind, the process of pooling experiences with a view to helping newcomers into the ranks of motor users can never be satisfactcirily carried on, unless the ton-mile be taken as a. basis. As already stated, the individual may take a. different basis, because one of his factors, be it mileage or load, chances to be constant. Supposing, however, we took the results obtained by 10 people using the vehicle-milt as a basis and found that the average for a onetonner worked out at 8d. Should we be safe in regarding this average as a fair estimate of our own chances Obviously, not in the least.
The costs of operating a commercial vehicle can be divided into two groups, namely, the running costs, which depend directly on the distance covered, and the standing charges, which have to be met irrespective of the distance. For instance, if we pay a driver 6s. a day and cover 72 miles a day, the cost of the driver is id. a mile. If we only cover 18 miles in a day, the cost of the driver is 4d. a mile. It is, then, very little use to know what it costs another man tO run a van per vehicle-mile unless our own mileage is going to be about the same as hid. The same objection can, of course, be urged against the ton-mile as a basis, but the figure of cost per ton-mile does at least refloat the useful work done by the vehicle.
I am, of course, speaking. of the net ton-mile. In point of fact, if we want to get a fairly good idea in advance of our probable costs of operation, we can best do so by -using a, ton-mile basis and utilizing curves drawn on squared paper and designed to show the comparative cost per ton-mile for vehicles Of various capacities covering various mileages. From a series of curves of this kind we can make at least fairly sound deductions to meet any case.
quite agree with the Editor that, when proapective motor users write to him for advice it may be best for him to give that advice, and tx.i frame his estimates, on a vehicle-mile basis, having previously ascertained all he wants to know about the inquirer's local roads and the weights and nature of the loads -that he will carry. At the same time, I adhere strongly to the view that if an owner of a number of vehicle's wants to compare the economic merits of various types or the organization of the work of several -vehicles of one type, he Must have resort to the net 'ton-mile a,s his basis for comparison. In so doing, let him avoid a simple, but by no means an uncommon, error. Suppose that a van makes two journeys, one of 20 miles carrying three tons and returning empty over a similar distance, and another of 15 miles 'carrying two tons and returning home with an equal load, we have the following facts as a basis for the record of the day :— 1.' 20 miles with 3 tons.
2. 20 miles with 0 tons.
3. 15 miles with 2 tons. A. 15 miles with 2 tons.
The total mileage is 70. The total tonnage is 7. The error is often made of multiplying 70 x 7 and stating the ton mileage for the day as 490. . As a matter of fact, each journey must be considered separately. The first journey accounts for 20 x 3 60 ton-miles. The second for 20 x 0 = 0 ton-miles. The third for 15 x 2 = 30, and the fourth also for 30, making a total of 120 ton-miles in the day. It will be seen that the error due to the .mistaken method of calculating is a very great one.
Now, on the basis of comparison of cost per net ton-mile we ought to be able to get a fairly good idea
as to whether we are organizing our deliveries as efficiently as the other man with a similar vehicle, or whether the driver of one of our vehicles is showing himself, more or less competent than the driver of another. On any other basis we shall go wrong. Only when we make our first inquiry of the Editor is it useful to us to be told what the cost of operation should be per mile, and then the figure is only really reliable because we have been able to tell the Editor what our average tonnage would be, and he has taken
that into account. VECTIS.