Cost of Transportation

By Ethelbert Favary Moreland Motor Truck Co.

All successful motor r.ehicle operators are figuring their costs not in terms of price of truck but in cost fer to-n-mile or per truck-mile over a term of years. and at th-e same time consider the revenue produced by the truck. It is a fallacy ttr sl:rte, for instance, "my tru6k costs me $1,OOO.OO pe'. .year", without considering the depreciation, the tons-of payloads the truck has hauled or the number of miles it has traveled.

One'man may have a truck with which he has hauled five tons, 100 miles per day, for 30O days, or a total of 150,000 ton-miles per year. The second man having a similar truck may have hauled say four tons, 50 miles i day, 2N

Ethelbert Fazta4p Consulting Engineer Moreland Motor ' Truck Co. Member Society Automotive Engineers

days in the year, or a total of 4O,000 ton-miles per year. Suppose the first man had spent $1,000.00 per yeaiin maintenance and repair; the second man spent only $500.00 and he qa_y think his costs were lower when in reality they are considerably higher.

Ih other words, the first operator spending $1,000.00 a year for 150,000 ton-miles will show a cost of $1,000 ------i=$.0066 per ton_mile. 150,000

The second man spent only $50O.0O on his truck but his costs actually were: $s00 __:$.OI2per ton mile, 40,000 or more than twice as much as those of the first operator. Hence, in order to figure out the cost of operatioi many items have to be considered. as will be shown later.

Cost of "Overloading"

The small operator belier-es his truck-is earning a greater revenue when he carries a payload greatly in exc-ess -of tt at recommended l>y the manufacturer. As j matter of fact, he may be losing money on his transportation because he does not consider the rapid depreciation nor the excessive cost of repairs which will be required within one, two or three years. Trucks produced by reputable truck manufacturers should shorv a life of many yeirs if they are properly used and properly cared for.

One of the most frequent causes for high cost of trans- p_ortation is overloading and its destructJve effects upon the various parts of the truck are certain to occur e^uen tho_u_gh the overloading is not often indulged in.

When a truck carriei a load, the frame, ixles, and other parts are under stress and will be deformed. If the load is excessive and the elastic limit of the metal is exceeded, there will be a-permanent-set (or twist as the case may bej in the parts affected and this will weaken the structurj.,r.rv materially.

If any portion of the truck has been overloaded to the extent-mentioned, it may not break or fail for a long time thereafter, possibly not for a year or two, but nevertiheless the breakage may be traced to-the overload. The reason for this is that when a structure has been once over-stressed. the continuous strains will weaken it rapidly uhtil it finally breaks.

Loss Due to Depreciation

Let us suppose that the price of a truck is 94,000.00 and that its normal life with ordinary care, before replacement is ngc^eg-sllyr is about eight years. This means a depreciation of $50O.00 per year, and this sum should be set aside each year. This $500.00 ye:arly should be added to the operating costs. If the operator overloads his trucks, in tlie beliel that he can show greater earnings by carrying much greater [naf, ne can snow Dy carryrng loads, he may find his truck worn out in two years and his bills for repairs so high that he is eompelled to purchase bills re eom a new truck after two years' service.

Under these conditions, while he might show higher earnings per year, his actual expenses might overbalance his increased earnings several times. If the truck, before mentioned, should wear out in two years. the depreciation would be $2,000.00 per year instead of $500.00. In other words, to his operating expenses must be added $2,000.00 yearly instead of only $500.00. Usually when a truck is overloaded the cost of repairs and maintenance is very much higher. It is only l>v considering all these items that an operator can determine his actual operating cost.