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Show HAULAGE GH1RGE tElGJpEl Arbitrary Rates Prove Ineffectual In-effectual and Result in Loss to Owner. Cost of Operation Per Ton Mile Should Be Taken as Basis. The owner of a motor truck often is rclined to establish a rate for hauling, r a rental rate, without first knowing exactly what the cost is, and therefore without knowing the exact profit that the job will bring. Arbitrary' rates of this sort are bound to result in a loss, because the tendency m fixing such rates is to keep them too low. A great many . owners are familiar with cost systems to some extent, others havo their own cost svstem, which In many cases neglects the Items of interest, depreciation, etc. the fixed charges. Lnless the exact cost is known it is obviously impossible to establish rates such as will with certainty cer-tainty bring a profit. If you owned a one-ton truck and, a customer asked yoa to do a certain worH. with it, say hauling one ton for seven miles over ordinary roads, you should be able to say it will cost you so many cents per ton mile. If there is an extra hazard, such as a very bad stretch of road, or if the load is difficult to handle in loading and unloading un-loading you must add what practice has shown to be a fair safety factor. But first of all vou must add what cost per mile per unit load will give you a good PIBelow are given the rough cost figures for a one-ton truck of low first cost. This truck is operated over a scventy-five-mile slretch and it costs slightly over $i;( per seventy-five miles to run if. DaiW cost of operating low-priced one- . ton truck for seventy-five-mile trip: Tires Gasoline - Driver 6.j Interest on 11 1 0 ; Insurance - Depreciation, 33 1-3 per cent 1... Garage, phone, etc M 513.61 It will be seen the cost per ton mile is approximately 8 cents. Need Sliding Scale. Jn order that the operator of such a truck make a profit he must fix In, rates with the cost p-r ton mile constantly con-stantly in mind. An analysis of a proi-itable'tiuck proi-itable'tiuck transportation system shows that a sliding scale is necessary and thn' ill' such matters as road conditions, type 'of goods, etc.. be considered. Here are the, prices charged by a large western operator who runs various types of trucks (Continued on Following Page ) K HUGE CHEE Mil PROBLEM (Continued from Preceding Page.) over a fifty-mile stretch. The figures are given for a one-ton truck: Oharpre in cents Miles per 100 pounds 5 30 10 ..,.33- 15 .37 -;o 4i I - .14 30 .. 48 I 35 52 I 40 B5 I I5 58 a0 63 j If these figures are compared with the ! existing express rate for the distances it will be found that they run about 40 to 50 per cent lower for the short distances dis-tances and 25 to 30 per cent for the longer long-er hauls. It is usual for the larger vehicle to show a lower cost per ton mile, so that the operator who uses a three-ton truck and carries full load most of the time 1 .can charge a lower rate than one using i a one-ton truck. As an example, a two- I ton truck operated with a one-ton shows , about 4 cents per ton mile less cost of operation. The motor truck in haulage work will ' be an absolute failure if the owner insists in-sists upon establishing rates without knowing why he is charging that much. He must know what it is costing him, and by adding a reasonable profit he will find that he will be able to undersell the railroads to sueh an extent as to make express haulage unattractive to the shipper. Use of Flat Fate. In some cases, where goods of a certain cer-tain character are carried daily or on certain days, a fixed charge per unit may be taken. For example, cans of milk or boxes of soap with a known weight may be handled at so much per can or box, depending upon the regularity of the loads and- the possibility of bringing a return re-turn load. This latter is all important, and where it exists the whole rate system sys-tem can be revised. It is necessary, though, to be assured of return loads daily. In all of this work the truck owner should bear in mind that his greatest single item of cost is depreciation, and therefore the better care given the truck the longer it will last and the lower the mile cost for depreciation. Some operators opera-tors forget depreciation and think only of the current charges, such, as driver, gasoline, oil, etc. |