View
14
Download
0
Category
Preview:
Citation preview
2011
REVISED APRIL 2011
Prepared for the Road Haulage Association by:
DFF INTERNATIONAL LTD
Goods Vehicle Operating Costs 2011 2
2
Contents
INTRODUCTION TO THE COST TABLES
Explanatory Notes
Carbon Footprint
3 – 5
6 – 8
9
COSTS FOR RIGID VEHICLES:
3.5 tonne gross vehicle (diesel)
7.5 tonne gross vehicle
13 tonne gross vehicle
18 tonne gross vehicle
26 tonne gross rigid vehicle
32 tonne gross rigid vehicle (tipper)
10
11
12
13
14
15
COSTS FOR ARTICULATED VEHICLES:
32/33 tonne gross (4x2+ tandem) combination
38 tonne gross (4x2+ tri-axle) combination
40 tonne gross (4x2+ tri-axle) combination
44 tonne gross (6x2+ tri-axle) combination
16
17
18
19
COSTS FOR DRAWBAR COMBINATION
* See NOTE below
20
COSTS FOR TRAILERS
Tandem Trailer (Curtainsider)
Tri-axle Trailer (Curtainsider)
21
22
Calculating Charges and Rates 23
Template for Rate Quotation 24
RHA Survey on Movement of Costs 25
Cost Percentages at Typical Mileages 26 - 27
Index of Operating Costs 28
Estimate of start-up capital requirement for 44-tonne artic 29
Index Comparisons 30
Fuel Adjustment: Specimen Agreement and Calculations 31
Profile of DFF International 32
NOTE: * Because of the very wide variations in combination, these are indicative costs of a 32.5 tonne combination.
Introduction to the Cost Tables
The 2011 RHA Goods Vehicle Operating Cost Tables are the nineteenth in this series and have been compiled for the Road Haulage Association by DFF International.
These Cost Tables are designed to assist in the task of relating rates to costs. They have two special features:
● They result from a survey of real costs from a large range and sample of road transport companies. These have been used either directly or as the basis for discussions with manufacturers and suppliers to establish real costs.
● They make no claim to be your own costs. Space is provided to build up a parallel picture of your own vehicles and guidance is given as to how to complete it.
Attention is also drawn to the data sheets which follow actual vehicle costs on pages 23 onwards.
Annual cost changes are based on the results of the Annual Survey on Movement of Prices, based on the periods 1
st October to 30
th September for each succeeding year.
Results for 2010, shown on page 25, reveal that increases in non-fuel costs were 1.7% while those in fuel were 3.2% (arising from an actual increase in fuel price of 10.6%).
INTERIM SURVEY
Mainly, but not exclusively, because of the continuing rise in the price of fuel, the RHA decided to undertake a further interim survey as at 31
st March 2011. By this date the price of diesel had reached 114.15 pence
per litre, an increase of 16.6% since 30th September 2010.
The survey (reproduced on page 25a) shows that over the six months non-fuel costs had risen by 1.8% and fuel by 5.2%, a total increase of 7.0%.
THE 2010 SURVEY
“To have survived the past year, a transport business will have been doing many things well,
holding down costs wherever possible and always looking for improvements in order to satisfy
customers and ensure the security of their business. It is constant monitoring, managing and striving
to improve any and all aspects of a business that enables success.
Fuel
Diesel prices over the past year have added most to the operating costs of a truck. The past year has
seen diesel prices increase by 10.6% - that included a 1ppl rise in fuel duty and the introduction of the Road
Transport Fuels Obligation (RTFO) on bio-diesel which added approximately 0.7ppl (both in April 2010). The
day after the survey period ended another duty rise took effect, again 1ppl.
According to our survey results, diesel accounts for nearly 32% of the running cost associated with the
44-tonne tractor and trailer combination. Taking the above figure into account over the past year, fuel price
rises mean 3.2% has been added to the cost, year on year, of keeping the wheels turning.
The survey has not accounted for the impact on engine performance of the increase in biodiesel
percentage to up to 7% of the total. Members have stated that this has increased fuel use by as much as 5% in
some cases, although the impact will vary according to a range of factors, including the type of biofuel used.
Biofuel standards are currently much less closely defined than those for mineral fuels. The RHA is investigating
further.
Drivers After diesel the next largest segment of costs is the driver. Many companies reduced their driving staff
during the first year of recession or even reduced wage rates. Other cost-reduction measures included
minimising overtime. The past year has now started to show modest wage rises with an increase of 1.49%. The
cost of using agency drivers rose on average by 1.13% although it is clear that relatively few members used
agency drivers last year. ____________________________________________________________________________________
Goods Vehicle Operating Costs 2011 3
THE 2010 SURVEY/ contd.
Vehicles Cost movements related to vehicle acquisition varied greatly depending on the method used to obtain the
truck. Those purchasing saw a rise of 3.11%; however for leasing was a startling 11.6%. Overall, 3.65% was the
national average because many more of our survey respondents purchased rather than leased. Where leasing
has been adopted it has been chosen in the main by larger fleets, attracted by fixed costs. Smaller firms prefer to
purchase an asset – if they choose to acquire at all.
The survey period coincided with the worst period ever for new truck registrations, with January/
February 2010 the worst months. Pricing faced the conflicting pressures of poor demand and a reduced value of
sterling against the euro, pushing up prices. Used truck prices are reported to have hardened towards the end of
the survey year.
Overheads Overheads are a key area of cost for professional transport companies, not least because they can be
under-recognised by customers. In a company running trucks on its own account, where transport is not the
main business, an allocation for overheads can be completely overlooked – to do so in a transport business can be
a quick route to disaster.
Overhead costs were reduced by some companies last year but members report an average increase of
2.03%. The impact on overall costs is a 0.2% increase. Items mentioned by members included renegotiation of
mobile phone contracts with longer terms and cash-back offers. Business rates and water rates are harder to
keep down although one member managed a 20% reduction in his water rates after proving that rain water run-
off went directly into a river rather than a sewer.
Insurance Average insurance costs in haulage increased only slightly over the year, in contrast with some press
reports of soaring costs in general motor insurance. An upward figure of 2.84% meant that insurance
accounted for 4.3% of running costs – although movement varied quite considerably with one company
reporting a reduction of nearly 15%. Companies felt that, if managed properly, it was possible to keep insurance
rates down and cited health and safety training in reducing this cost.
Tyres Tyre costs rose modestly, accounting for 2.9% overall. The increase was attributable to a rise in the cost
of repairs rather than the base cost of tyres.
Fuel price / haulage rate mechanism For the past four years’ surveys, the RHA has separated out the fuel element of costs. Around 55% of
responses showed that a fuel mechanism was in place to deal with diesel price fluctuation; this still leaves 45% or
nearly half at the mercy of the volatile fuel market. Some parts of the industry traditionally have not used these
mechanisms, such as much of the aggregates, waste industries and general haulage backloads where the rates
may be set, for example, by annual contracts.
Buying diesel at the best price may mean reviewing purchase methods and keeping up with market
intelligence. The RHA’s own weekly bulk fuel survey gives a good comparison for absolute price and trend.
Along with buying fuel competitively, the operator also needs to plan effective routes which may mean
investment in technology for some firms. Operators also need to have drivers who perform well – who not only
know how to drive the truck to return a good MPG rate but actually use that knowledge, day in day out. The
year saw further progress in improving the good driving culture in many firms and commitment to progressive
monitoring and managing of drivers.
Overall Position
The full picture for this survey period – effectively the past year – is that complete costs on the
44-tonne tractor and trailer combination have increased by 4.9%. That is 3.2% for fuel cost and 1.7%
relating to all other categories.” ________________________________________________________________________________
Goods Vehicle Operating Costs 2011 4
Goods Vehicle Operating Costs 2011 5
3
Introduction to the Cost Tables/ contd.
It is important to note that the cost percentages in the right-hand column on the Table on page 25 will vary significantly between different sizes of vehicle, as well as between different types of operation e.g. long / short distance, tipping / general haulage and location.
A table of these varying average percentages is provided on pages 26/27, at typical annual mileages.
You should establish your own ratios in the following way:
- select the costs of the vehicle which is most similar to the one you are costing;
- substitute any of your own figures which you can identify as being different from those in the
Tables;
- determine the total time-related cost per year;
- apply the distance-related costs to your own estimated annual mileage to determine the total of
those costs;
- determine total costs;
- calculate each item of cost as a percentage of the total.
Using these percentages will enable you to convince your customers how much your own costs have increased (for each type of vehicle or operation) and help in obtaining the sorely needed increases in rates.
These Cost Tables are now available in fully interactive form on the RHA website. Both the RHA and DFF International are always interested in comments on the Tables, in suggestions for improvements and in queries on how to use the Tables. We will always endeavour to help.
USERS OF THESE TABLES ARE WELCOME TO RAISE ANY QUERIES WITH BRIAN FISH
OF DFF ON TEL. 0117 9681148 OR BY EMAIL brianfish@dffintl.co.uk
Goods Vehicle Operating Costs 2011 6
4
Explanatory Notes
Know Your Costs!
The costs assembled in the accompanying pages result from a combination of the annual survey undertaken by the Road Haulage Association and DFF International research on vehicle costs. The figures are averages based on the numbers of vehicles for which relevant information was provided.
They are averages; they are not your costs!
Accordingly, it would be dangerous and misleading for you to assume that the costs shown in the accompanying tables relate to your fleet. As part of our research we have compared our results with several of the published cost tables. The variations across those tables, for every cost except VED, are so staggering as to lend weight to our contention that depending on averages is simply untenable.
It is for this reason that, alongside the average costs for each type of vehicle as determined in the survey, there is a column in which you must insert the relevant comparable figures for the vehicles in your own fleet. In order to assist you with this, the following explanatory notes are provided.
Time-Related and Mileage-Related Costs
It is astonishing to us that so many vehicle operators still think and talk in terms of cost per mile or cost per day. This is encouraged by those tables which bring all costs together to produce such a figure. There is no such thing and it is dangerous to measure costs in such a way. Costs are an infinitely variable mixture of time-related and distance-related. Time-related costs are accruing even when the vehicle is not being used while the distances we may cover in any given period of time can vary enormously according to the type of work we are doing.
These tables are accordingly designed to arrive at a cost per average day (see below), which can be reduced to a cost per hour depending on the number of hours worked in a day, and then, quite separately, an average cost per mile actually run. This is dealt with in greater detail in the section Calculating Charges and Rates on pages 23 and 24.
Vehicle Prices
These are given on a representative basis because of the enormous variations encountered. These arise from:
● Specification required in your particular operation.
● Discounts available.
● List price differences.
See also below under Average Depreciation/Residuals
Average Days per Annum
One of the most vital keys to profitability is the number of days per annum you effectively use your vehicles. This governs the rate at which you can recover time-related costs, since these will mostly be accruing against you, whether you use the vehicle or not. You must accordingly determine, either from available records or from an informed view of your work, the number of days likely to be worked by each type of vehicle. In these tables, to be consistent, we have continued to assume 240 'Earning Days' throughout, but it is essential that you determine your own utilisation and hence your competitive edge. There is evidence to suggest that many hauliers are in fact achieving higher utilisation factors, particularly where multi-shifting is possible.
Typical Miles per Annum
This is provided for information only. There are wide variations in this figure.
Average Depreciation/Residuals
There are many ways of providing for depreciation. In these Tables it is calculated on the basis of representative price, spread over the average depreciation period. Remember that the depreciation charged in your financial accounts, or allowed for tax purposes, is not likely to be applicable to your operating costs.
In practice you should be able to secure a residual value when you sell a vehicle, some of which may be guaranteed buy-back arrangements. The shorter the depreciation period, in comparison with useful life, the higher that residual should be. The longer the depreciation period, the lower the residual and where useful life and depreciation periods coincide, it is prudent to assume a zero residual.
Only you can determine which is most appropriate for you to use when assessing your costs; remember that competitive edge can also be gained by achieving a minimum depreciation figure, provided it genuinely reflects the whole life of vehicles in your operations.
Driver Employment Costs
Employment costs must cover actual weekly wages, bonuses, holiday entitlements, relief drivers, sick leave, NIC and pension costs together with training.
During this survey period these costs increased by an overall 1.49%, including all the above elements.
It had been anticipated that the impact of the Road Transport Directive from April 2005 would lead to greatly reduced average working hours and hence correspondingly increased wage costs. In practice the impact has been softened by the ability to include “periods of availability” within average working hours. As a result it is still therefore appropriate to base wage costs on average hours worked in the operation.
Insurances
Revised vehicle insurance premium figures have been compiled using data from various sources including surveys and information provided by RHA Insurance. Premiums vary significantly; much depends on factors such as claims experience, type of haulage work undertaken and whether that work is international, where the business is based and fleet profile.
Savings on the average premiums shown may be achievable through RHA Insurance.
VED Licences
Rates shown are for typical vehicles. There are however variations based on age, engine size, carbon emissions and Euro number.
Interest on Capital
This has been estimated at a notional 6.0% on mid-life value, i.e. effectively half the original cost. Although base rates are at an all-time low, in practice haulage companies needing bank help are having to pay this sort of rate (and often much more) in order to obtain it.
Goods Vehicle Operating Costs 2011 7
Goods Vehicle Operating Costs 2011 8
5b
Overheads per Vehicle
This again is the average obtained from the survey. You must assess the total overheads in your business and allocate them to vehicles. The simplest way of doing this is in proportion to gross weights. Remember also that if you run a business with other activities besides vehicle operations, only overheads attributable to the vehicles should be allocated to them.
Overheads are all business costs not specifically identified in the cost sheets. Typically they will include:
a) Management (including working directors), Supervisory and Clerical Salaries and Wages, including NHI and pension costs;
b) Administration Overheads: Include total property costs (i.e. rents and rates paid, gas, water and electricity, property repairs, maintenance and insurance, cleaning and general household expenses), general office expenses, postage, telephone charges, legal fees, bank charges (not interest), insurances, hire of furniture and equipment, IT systems, depreciation of staff cars, breakdown vehicles and service vans, audit fees, management consultancy fees and sales promotion, bad debts and security services, welfare and ancillary wages;
c) Operational Overheads: Include carriers licence, price of sheets, ropes, dunnage, running of breakdown vehicles, service vans and staff cars, maintenance and cleaning of tanker/refrigerated/garage equipment, tachograph, tools and consumable materials.
Other Costs
Additional costs such as bonuses, excess hours and subsistence, tolls and ferry costs, do not accrue on any consistent time or mileage-related basis. They are specifically individual both to companies and to individual jobs within those companies. They must, therefore, be allowed for on that basis and have not been included in these Tables.
Mileage-Related Costs
These are based on a best view of industry averages, adjusted annually by reference to the survey results
shown on page 25. Figures for these costs have been calculated as follows:
Fuel: Latest bulk diesel price against average consumption in survey. However, you will need to
keep a close watch on fuel prices and incorporate changes in your costs as they occur.
(Average price at 21.04.11 = 115.36 pence per litre = 524 pence per gallon).
See the Fuel Adjustment Specimen Agreement and Calculations on page 31.
Lubricants
& additives: Included in maintenance (see below).
Tyres: Average costs per mile from survey.
Repairs All such costs have been included under this heading: however, routine servicing costs
and and contract repairs (which are often charged on a monthly basis) are frequently
Maintenance: recovered as a time-related item.
NOTE All of the costs we have outlined above will vary from operation to operation.
This is why you must incorporate your own fleet figures when using these Tables.
Carbon Footprint
Supply chain managers are becoming increasingly concerned to minimise the carbon footprint of their operation. This includes all transport: vehicle operators are therefore being required to measure their own footprint profile. The calculation is as follows:
To convert mpg to kms per litre multiply by 0.352
To obtain litres per km divide 1 by the km/litre figure above
To obtain CO2 in kg per km multiply by 2.63
To obtain CO2 in g per km (the accepted measure) multiply by 1000
(See Freight Best Practice, www.freightbestpractice.org.uk)
Example: Carbon Footprint Calculation
Assume a 44-tonner returning 7.2mpg:
7.2 multiplied by 0.352 gives 2.53 km/litre;
1 divided by 2.53 gives 0.395 litre/km;
0.395 multiplied by 2.63 gives 1.04 kg of CO2 / km;
Finally that figure multiplied by 1,000 gives 1,040g of CO2 / km.
Goods Vehicle Operating Costs 2011 9
Goods Vehicle Operating Costs 2011 10
6
Costs for a 3.5 Tonne Gross Vehicle (Diesel)
Data Average Figures Your Figures
Vehicle Price (representative) £22,000
Average depreciation period (years) 4
Typical miles per annum 45,000
Average days worked per annum 240
Average miles per gallon 27
Average tyre life (miles) 45,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 23,900
Depreciation 5,500
Licences 185
Vehicle Insurance 1,150
Goods in Transit Insurance 220
Interest on Capital (6.0%) 660
Overhead per vehicle 4,400
-----------------------------------------------------------------------
Total Time Costs 36,005
Time Cost per Day 150
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 19.4
Tyres 1.5
Repairs and Maintenance 5.1
-----------------------------------------------------------------------
Total Mileage Costs 26.0
__________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 11
7
Costs for a 7.5 Tonne Gross Vehicle
Data Average Figures Your Figures
Vehicle Price (representative) £40,000
Average depreciation period (years) 5
Typical miles per annum 45,000
Average days worked per annum 240
Average miles per gallon 16
Average tyre life (miles) 45,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 26,000
Depreciation 8,000
Licences 165
Vehicle Insurance 1,550
Goods in Transit Insurance 240
Interest on Capital (6.0%) 1,200
Overhead per vehicle 5,600
-----------------------------------------------------------------------
Total Time Costs 42,755
Time Cost per Day 178
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 32.8
Tyres 1.7
Repairs and Maintenance 8.2
-----------------------------------------------------------------------
Total Mileage Costs 42.7
__________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 12
8
Costs for a 13 Tonne Gross Vehicle
Data Average Figures Your Figures
Vehicle Price (representative) £43,800
Average depreciation period (years) 5
Typical miles per annum 45,000
Average days worked per annum 240
Average miles per gallon 14
Average tyre life (miles) 60,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 26,800
Depreciation 8,760
Licences 200
Vehicle Insurance 1,750
Goods in Transit Insurance 280
Interest on Capital (6.0%) 1,300
Overhead per vehicle 8,800
-----------------------------------------------------------------------
Total Time Costs 47,890
Time Cost per Day 200
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 37.4
Tyres 2.8
Repairs and Maintenance 9.0
-----------------------------------------------------------------------
Total Mileage Costs 49.2
__________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 13
9
Costs for an 18 Tonne Gross Vehicle (2 axles)
Data Average Figures Your Figures
Vehicle Price (representative) £56,500
Average depreciation period (years) 6
Typical miles per annum 50,000
Average days worked per annum 240
Average miles per gallon 12
Average tyre life (miles) 70,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 27,800
Depreciation 9,400
Licences 650
Vehicle Insurance 2,430
Goods in Transit Insurance 280
Interest on Capital (6.0%) 1,700
Overhead per vehicle 12,000
-----------------------------------------------------------------------
Total Time Costs 54,260
Time Cost per Day 226
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 43.7
Tyres 3.1
Repairs and Maintenance 10.0
-----------------------------------------------------------------------
Total Mileage Costs 56.8 __________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 14
10
Costs for a 26 Tonne Gross Rigid Vehicle
Data Average Figures Your Figures
Vehicle Price (representative) £77,000
Average depreciation period (years) 6
Typical miles per annum 50,000
Average days worked per annum 240
Average miles per gallon 9.5
Average tyre life (miles) 44,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 29,200
Depreciation 12,800
Licences 650
Vehicle Insurance 2,900
Goods in Transit Insurance 335
Interest on Capital (6.0%) 2,300
Overhead per vehicle 13,900
-----------------------------------------------------------------------
Total Time Costs 62,085
Time Cost per Day 259
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 55.2
Tyres 4.1
Repairs and Maintenance 12.8
-----------------------------------------------------------------------
Total Mileage Costs 72.1 __________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 15
11
Costs for a 32 Tonne Gross Rigid Vehicle (Tipper)
Data Average Figures Your Figures
Vehicle Price (representative) £92,000
Average depreciation period (years) 6
Typical miles per annum 50,000
Average days worked per annum 240
Average miles per gallon 8
Average tyre life (miles) 36,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 29,500
Depreciation 15,350
Licences 1,200
Vehicle Insurance 3,200
Goods in Transit Insurance 350
Interest on Capital (6.0%) 2,760
Overhead per vehicle 15,300
-----------------------------------------------------------------------
Total Time Costs 67,660
Time Cost per Day 282
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
Mileage-Related ppm ppm
Fuel 65.5
Tyres 5.3
Repairs and Maintenance 16.1
-----------------------------------------------------------------------
Total Mileage Costs 86.9
__________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 16
12
Costs for a 32/33 Tonne Gross
(4x2+tandem) Combination
Data Average Figures Your Figures
Vehicle Price (representative) £59,000
Average depreciation period (years) 7
Typical miles per annum 60,000
Average days worked per annum 240
Average miles per gallon 9
Average tyre life (miles) 70,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 30,000
Depreciation 8,400
Licences 1,200
Vehicle Insurance 3,500
Goods in Transit Insurance 355
Interest on Capital (6.0%) 1,770
Overhead per vehicle 16,700
-----------------------------------------------------------------------
Total Time Costs 61,925
Time Cost per Day £258 + £10 for tandem curtainside trailer
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
+ TRAILER
Mileage-Related ppm ppm
Fuel 58.2
Tyres 1.4 2.2
Repairs and Maintenance 8.6 3.6
------------------------------------------------------------------------------
Total Mileage Costs 68.2 + 5.8
_______________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 17
13
Costs for a 38 Tonne Gross
(4x2 + tri-axle) Combination
Data Average Figures Your Figures
Vehicle Price (representative) £60,000
Average depreciation period (years) 6
Typical miles per annum 70,000
Average days worked per annum 240
Average miles per gallon 8
Average tyre life (miles) 70,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 31,000
Depreciation 10,000
Licences 1,200
Vehicle Insurance 4,050
Goods in Transit Insurance 355
Interest on Capital (6.0%) 1,800
Overhead per vehicle 20,800
-----------------------------------------------------------------------
Total Time Costs 69,205
Time Cost per Day £289 + £11 for tri-axle curtainside trailer
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
+ TRAILER
Mileage-Related ppm ppm
Fuel 65.5
Tyres 1.7 2.4
Repairs and Maintenance 8.8 3.8
------------------------------------------------------------------------------
Total Mileage Costs 76.0 + 6.2
______________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 18
14
Costs for a 40 Tonne Gross
(4x2 + tri-axle) Combination
Data Average Figures Your Figures
Vehicle Price (representative) £68,500
Average depreciation period (years) 6
Typical miles per annum 70,000
Average days worked per annum 240
Average miles per gallon 7.8
Average tyre life (miles) 70,000
Costs
Time-Related Per Annum £
Driver Employment Costs 31,250
Depreciation 11,420
Licences 1,850
Vehicle Insurance 4,050
Goods in Transit Insurance 390
Interest on Capital (6.0%) 2,050
Overhead per vehicle 21,700
-----------------------------------------------------------------------
Total Time Costs 72,710
Time Cost per Day £303 + £11 for tri-axle curtainside trailer
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
+ TRAILER
Mileage-Related ppm ppm
Fuel 67.2
Tyres 1.7 2.4
Repairs and Maintenance 8.8 3.8
------------------------------------------------------------------------------
Total Mileage Costs 77.7 + 6.2
_______________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 19
15
Costs for a 44 Tonne Gross
(6x2 + tri-axle) Combination
Data Average Figures Your Figures
Vehicle Price (representative) £77,000
Average depreciation period (years) 6
Typical miles per annum 70,000
Average days worked per annum 240
Average miles per gallon 7.2
Average tyre life (miles) 65,000
Costs
Time-Related Per Annum
£
Driver Employment Costs 31,250
Depreciation 12,900
Licences (£650, combined transport) 1,200
Vehicle Insurance 4,350
Goods in Transit Insurance 450
Interest on Capital (6.0%) 2,300
Overhead per vehicle 24,000
-----------------------------------------------------------------------
Total Time Costs 76,450
Time Cost per Day £319+ £11 for tri-axle curtainside trailer
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to costings for rates as incurred, by job.
+ TRAILER
Mileage-Related ppm ppm
Fuel 72.8
Tyres 2.5 2.4
Repairs and Maintenance 9.5 4.3
-------------------------------------------------------------------------
Total Mileage Costs 84.8 + 6.7
____________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Costs for a 32.5 Tonne Gross
Drawbar Combination (2 axle tractor, 2 axle trailer)
Data Average Figures Your Figures
Vehicle Price (representative) TRACTOR £70,000
Average depreciation period (years) 7
Typical miles per annum 70,000
Average days worked per annum 240
Average miles per gallon 9
Average tyre life (miles) 50,000
Costs
Time-Related Per Annum £
Driver Employment Costs 30,000
Depreciation 10,000
Licences (£640, combined transport) 880
Vehicle Insurance 3,500
Goods in Transit Insurance 355
Interest on Capital (6.0%) 2,100
Overhead per vehicle 16,700
-----------------------------------------------------------------------
Total Time Costs 63,535
Time Cost per Day £265 + £11 for curtainside trailer
__________________________________________
Note Bonuses, excess hours, subsistence and similar are not included. These should be added to
costings for rates as incurred, by job. + TRAILER
Mileage-Related ppm ppm
Fuel 58.2
Tyres 4.1 2.2
Repairs and Maintenance 12.8 3.7
------------------------------------------------------------------------------
Total Mileage Costs 75.1 + 5.9
______________________________________________
Note These are not your costs - see pages 6/9
N.B. Rate = time cost + mileage cost + job cost + profit – see note (d) page 24
Goods Vehicle Operating Costs 2011 20
Goods Vehicle Operating Costs 2011 21
17
Costs for a Tandem Trailer (Curtainsider)
Data Average Figures Your Figures
Vehicle Price (representative) £17,000
Average depreciation period (years) 10
Average tyre life (miles) 65,000
Costs
Time-Related Per Annum
£
Driver Employment Costs
Depreciation 1,700
Licences
Vehicle Insurance
Goods in Transit Insurance
Interest on Capital (6.0%) 500
Overhead per vehicle
-----------------------------------------------------------------------
Total Time Costs 2,200
Cost per Day £10
__________________________________________
Note Operators using more than one trailer per tractor should adjust this cost as appropriate.
Mileage-Related ppm ppm
Fuel
Tyres 2.2
Repairs and Maintenance 3.6
-----------------------------------------------------------------------
Total Mileage Costs 5.8
__________________________________________
Note These are not your costs - see pages 6/9
Goods Vehicle Operating Costs 2011 22
18
Costs for a Tri-Axle Trailer (Curtainsider)
Data Average Figures Your Figures
Vehicle Price (representative) £19,000
Average depreciation period (years) 10
Average tyre life (miles) 55,000
Costs
Time-Related Per Annum
Driver Employment Costs
Depreciation 1,900
Licences
Vehicle Insurance
Goods in Transit Insurance
Interest on Capital (6.0%) 570
Overhead per vehicle
-----------------------------------------------------------------------
Total Time Costs 2,470
Cost per Day £11
__________________________________________
Note Operators using more than one trailer per tractor should adjust this cost as appropriate.
Mileage-Related ppm ppm
Fuel
Tyres 2.4
Repairs and Maintenance 3.8
-----------------------------------------------------------------------
Total Mileage Costs 6.2
__________________________________________
Note These are not your costs - see pages 6/9
Goods Vehicle Operating Costs 2011 23
19
Calculating Charges and Rates
It is a frequent mistake to approach the calculation of charges and costs on the basis of an imagined requirement of revenue per day or revenue per mile. As we have asserted on page 4, there is no such thing.
You must approach this task by assessing both the time likely to be required to complete a job and the number of miles that will be covered.
You must then apply to the time element, the cost per day as determined; add any specific bonuses, extra hours, subsistence and sundries and miles at the appropriate cost.
This will give you a fair cost of the job for which you are quoting. To this you must add a percentage for profit. In today’s market this is extremely difficult because, on many occasions, you will find the costs as properly determined from these notes are greater than the revenue likely to be derived from the rates being charged by your competitors.
Notwithstanding this you must aim for a profit margin and a practical exercise is to add 10% to your total costs, when comparing yourself with what you know about competitive market rates. In the case of fuel you should always attempt to negotiate a clause into all rate schedules and contracts allowing fuel price increases to be passed on to the customer as they occur.
You must then decide whether you can accept a job at less than the rate thus calculated and, even more crucially, whether you can accept it at less than the true cost of undertaking it. In anything but the shortest run you cannot afford to do the latter; except perhaps for casual or special jobs which fit into the pattern of your overall work.
You should never embark upon work at rates which, overall, you know will not cover the costs you have identified from following the rules suggested in these notes.
On page 24 we present a template, showing the ground you should cover when calculating a rate.
If you have any queries or require advice concerning these Tables please contact Brian Fish at:
DFF International Ltd
14 Stoke Hill
Stoke Bishop
Bristol
BS9 1JH
Telephone: (0117) 968 1148
Fax: (0118) 963 7923
email: brianfish@dffintl.co.uk
© The Road Haulage Association and DFF International Limited 2011
TEMPLATE FOR RATE QUOTATION
1. NAME OF CUSTOMER ………………………………………….. 2. DETAILS OF JOB …………………………………………..
3. Size of Truck Required 15. Return Load Time Cost
4. Estimated Days/Hours for Job 16. Return Load Distance Cost
5. Estimated Trip Miles 17. Return Load Specific Costs
6. Details of Market Competitor
Rates if Known
18. Total Return Load Costs
7. Anticipated Time Costs of Job 19. Total Round Trip Cost
(10 + 18)
8. Anticipated Distance Cost of Job 20. Return Load Revenue
9. Job Specific Costs: Subsistence
Bonus
Tolls
Ferry
Other
21. Minimum Required
Outward Revenue
(19 – 20)
PROFITABILITY
10. Total Cost of Job 22. Actual Revenue
11. Target Margin 23. Actual Time Costs
12. Target Revenue 24. Actual Mileage Costs
13. Target Rate 25. Actual Specific Costs
14. Agreed Rate 26. Actual Profit/Loss
Notes: (a) You will often find that a job will be completed with some hours in the day
“left over”. These hours will be costing you. You will need to decide whether you can use them for something else. If not, can those hours be charged to the job without making you uncompetitive?
(b) Where a return load is involved, it is important that you cost the whole round trip, allowing for the revenue you are likely to earn for the return and deciding how much to allow against the outward job for which you are quoting.
(c) When you are allocating costs in lines 7, 8, 15, 16, don’t forget when using the appropriate figures from the tables, if possible to substitute YOUR costs where they are different.
(d) Rate = time cost + mileage cost + job cost + profit
Goods Vehicle Operating Costs 2011 24
RHA SURVEY ON MOVEMENT OF COSTS
PERIOD: 30 SEPTEMBER 2009 – 30 SEPTEMBER 2010
% TOTAL
COST
30.09.09
COST
CATEGORY
% PRICE
MOVEMENT
IN PERIOD
% CHANGE
IN
COST
% TOTAL
COST
30.09.10
11.8
Vehicle &
Depreciation
3.65
0.4
11.7%
1.0 Road Tax 0.0 0.0 1.0%
4.4 Insurance 2.84 0.1 4.3%
26.5
Driver Employment
Costs
1.49
0.4
25.7%
11.1
Repairs &
Maintenance
3.69
0.4
11.0%
3.0
Tyres: Replacement
tyres, tubes etc.
2.83
0.1
2.9%
12.3 Overhead Costs 2.03 0.2 12.0%
70.2 SUB-TOTAL xxxxx 1.7 68.6%
29.8 FUEL 10.6 3.2 31.4%
100
TOTAL = FUEL +
Other Costs
4.9
100.0%
2009 Fuel ppl 30.09.09 88.51 2010 Fuel ppl 30.09.10 97.90
COST MOVEMENT SURVEY NOTES
See commentary on pages 3/4
Goods Vehicle Operating Costs 2011 25
Road Haulage Association Interim Survey on Movement of Costs
October 2010 – April 2011
% Total Cost
30.9.10
Cost Category
%Price Movement in period
% Change in
Cost
% Total Cost
01.04.11
11.7 Vehicle & Depreciation 1.72 0.2 11.1%
1.0 Road Tax 0 0.0 0.9%
4.3 Insurance 5.6 0.2 4.2%
25.7 Driver Employment Costs 2 0.5 24.5%
11.0 Repairs & Maintenance 6.17 0.7 10.9%
2.9 Tyres: Replacement tyres, tubes etc.
4.57 0.1 2.8%
12.0 Overhead Costs 0.5 0.1 11.3%
68.5 TOTAL xxxxxxxxxx 1.8 65.7%
31.5 FUEL 16.6 5.2 34.3%
100 TOTAL = FUEL+ Other Costs
7.0 100.0%
2009 Fuel ppl (30/09/09) 88.51
2010 Fuel ppl (30/09/10) 97.90
2011 Fuel ppl (01/04/11) 114.15
Goods Vehicle Operating Costs 2011 25a
COST PERCENTAGES AT TYPICAL MILEAGES
24/11/2010
3.5T 7.5T 13T 18T 26T 32T MILES 45,000 45,000 45,000 50,000 50,000 50,000
£ % £ % £ % £ % £ % £ % TIME Wages 23,900 50.1 26.000 42.0 26,800 38.3 27,800 33.6 29,200 29.8 29,500 26.6
Dep’n 5,500 11.5 8,000 12.9 8,760 12.5 9,460 11.4 12,800 13.0 15,350 13.8
Licence 185 0.4 165 0.3 200 0.3 650 0.8 650 0.7 1,200 1.1
Insurance 1,150 2.4 1,550 2.5 1,750 2.5 2,430 2.9 2,900 3.0 3,200 2.8
GIT 220 0.5 240 0.4 280 0.4 280 0.3 335 0.3 350 0.3
Interest 660 1.4 1,200 1.9 1,300 1.9 1,700 2.0 2,300 2.3 2,760 2.5
Overheads 4,400 9.2 5,600 9.0 8,800 12.5 12,000 14.5 13,900 14.2 15,300 13.7
TOTAL
TIME
36,005
75.5
42,755
69.0
47,890
68.4
54,260
65.5
62,085
63.3
67,660
60.9
DISTANCE
FUEL* 8,730 18.3 14,760 23.8 16,830 24.0 21,850 26.5 27,600 28.1 32,750 29.5
Tyres
675
1.4
765
1.2
1,260
1.8
1,550
1.9
2,050
2.1
2,650
2.4
R & M
2,295
4.8
3,690
6.0
4,050
5.8
5,050
6.1
6,400
6.5
8,050
7.2
TOTAL
DISTANCE
11,700
24.5
19,215
31.0
22,140
31.6
28,450
34.5
36,050
36.7
43,450
39.1
TOTAL/
YEAR
47,705
100.0
61,970
100.0
70,030
100.0
82,710
100.0
98,135
100.0
111,110
100.0
* Diesel at 115.36 pence per litre = 524 pence per gallon
NB These percentages are only valid at the stated annual mileage.
At higher mileages, time costs percentages will be lower and distance costs higher.
As with all other figures, actual costs and mpgs will vary between operators and vehicles in all categories.
Goods Vehicle Operating Costs 2011 26
COST PERCENTAGES AT TYPICAL MILEAGES 24/11/2010
32/3T AT 38TA 40TA 44TA D/B
MILES 60,000 70,000 70,000 70,000 70,000
£ % £ % £ % £ % £ %
TIME Wages 30,000 27.6 31,000 24.0 31,250 23.3 31,250 21.9 30,000 24.4 Dep’n 8,400 7.7 10,000 7.7 11,420 8.5 12,900 9.0 10,000 8.1 Licence 1,200 1.1 1,200 0.9 1,850 1.4 1,200 0.8 880 0.7 Insurance 3,500 3.2 4,050 3.1 4,050 3.1 4,350 3.0 3,500 2.8 GIT 355 0.3 355 0.3 390 0.3 450 0.3 355 0.3 Interest 1,770 1.6 1,800 1.4 2,050 1.5 2,300 1.6 2,500 2.0 Overheads 16,700 15.4 20,800 16.1 21,700 16.2 24,000 16.8 16,700 13.6 Trailer 2,200 2.0 2,470 1.9 2,470 1.8 2,470 1.7 2,220 1.8 TOTAL
TIME
64,125
58.9
71,675
55.4
75,180
56.1
78,920
55.1
66,155
53.7 DISTANCE FUEL* 34,920 32.4 45,850 35.6 47,040 35.2 50,960 35.7 40,740 33.3 Tyres
incl Trailer
2,160
2.0
2,870
2.2
2,870
2.1
3,430
2.4
4,410
3.6 R&M
incl Trailer
7,320
6.7
8,820
6.8
8,820
6.6
9,660
6.8
11,550
9.4 TOTAL
DISTANCE
44,400
41.1
57,540
44.6
58,730
43.9
64,050
44.9
56,700
41.2 TOTAL/
YEAR
108,525
100.0
129,215
100.0
133,910
100.0
142,970
100.0
122,855
100.0
TRACTOR PLUS 1 TRAILER * Diesel at 115.36 pence per litre = 524 pence per gallon
NB These percentages are only valid at the stated annual mileage.
At higher mileages, time costs percentages will be lower and distance costs higher.
As with all other figures, actual costs and mpgs will vary between operators and vehicles in all categories.
Goods Vehicle Operating Costs 2011 27
Goods Vehicle Operating Costs 2011 28
23
Index of Operating Costs
30th
September 1989 = 100
09.01
09.02
09.03
09.04
09.05
09.06
09.07
09.08
09.09
09.10
COST
CATEGORY
Vehicle
Depreciation
140
143
144
146
150
152
167
175
183
190
Road Tax
51
45
45
45
45
45
45
45
45
45
Vehicle
Insurance
231
268
282
287
294
303
309
318
348
358
Drivers:
Employment
Costs
Subsistence
163
148
175
155
183
160
194
165
205
172
211
176
224
180
233
188
238
193
242
197
Repairs and
Maintenance
166
163
179
187
195
200
218
227
239
248
Replacement
Tyres
155
160
163
168
173
177
182
193
204
210
Overheads
166
175
180
188
194
199
217
225
243
248
Fuel
(Diesel)
218
214
220
254
287
281
313
376
344
380
INDEX OF
TOTAL
OPERATING
COSTS
179
183
189
203
217
217
235
256
256
269
Goods Vehicle Operating Costs 2011 29
24
DFF Estimate of Working Capital Requirements
Start-up Position – 44 Tonne Artic
Wages : 8 weeks 4,800
Licence : 6 months in advance 660
Insurance : 6 months in advance 2,175
Acquisition : 3 months lease in advance 5,000
Overheads : 50% for 8 weeks 1,850
Fuel : 70,000 miles per annum,
1,400 miles per week
for 8 weeks at 72.8 ppm 8,150
Services : 550
_________________________________________
TOTAL (say) £23,000
_________________________________________
This calculation provides an indication of the money you may have to pay out
before you start to receive money from your customers.
Goods Vehicle Operating Costs 2011 30
25
Index Comparisons
30th September 1989 = 100
Costs as
RHA Survey
Rates paid reported by
FTA
RPI
1990
108.3
102.4
110.9
1995
130.3
112.5
129.2
2000
172.9
128.3
147.3
2001
178.8
129.2
149.7
2002
182.4
129.6
152.3
2003
189.9
131.9
156.5
2004
203.0
133.3
160.7
2005
217.0
137.9
165.8
2006
217.0
140.5
172.1
2007
235.0
148.3
178.6
2008
256.0
147.7
187.0
2009
256.0
147.9
185.5
2010
269.0
N/A
193.9
FUEL ADJUSTMENT SPECIMEN AGREEMENT AND CALCULATIONS
This Agreement dated [Enter date] is between [Enter name of haulier] and [Enter name of company].
It is agreed that:
(a) the base price of diesel for the purpose of this Agreement is [Enter amount] pence per litre, exclusive of VAT
(b) the haulier may adjust the price(s) for work undertaken for the customer by reference to the following formula:
(i) a change of 1p per litre in the price of fuel shall be determined as a percentage of the base price as in (a) above
(ii) the cost of fuel to the haulier shall be determined as a percentage of either the haulier’s total costs or revenue, as may be agreed
(iii) the adjustment to be applied (by way of either increase or decrease in price) shall be the product of (i) x (ii)
(c) such adjustments shall be calculated at [Enter frequency, eg weekly, monthly] intervals.
Example
1. Assume the base buying price on 1st January 2011 was 106.6 pence per litre, excluding VAT
2. Every 1p change in price is therefore 0.94%.
3. (a) Revenue for the last 3 months was £140,000
Fuel cost for the last 3 months was £ 48,000
Fuel as a percentage of revenue was therefore 34.3%
It follows that, for every 1p per litre difference in price from 106.6 pence, adjustment should be: 0.94% x 34.3 = 0.32%.
Therefore, if on 1st April 2011 the haulier is paying 114.2 pence per litre, an average increase in
rate would be appropriate of (114.2 – 106.6) = 7.6 x 0.32 = 2.4%
(b) If it is required by the customer it will be necessary to split both revenues and fuel costs, as above, either between types of work, or both.
For example:
32/33-tonne vehicles 44-tonne vehicles Total
Revenue 63,000 77,000 140,000
Fuel 20,450 27,550 48,000
% 32.4% 35.7% 34.3%
Adjusted per 1p/litre (0.94 x 32.4) = 0.30% (0.94 x 35.7) = 0.34% (0.94 x 34.3) = 0.32%
Adjusted for + 7.6 pence per litre
+ 2.3% + 2.6% + 2.4%
NB A reduction is only ever due if the corresponding increase had been applied in the first place!
These figures are illustrative only.
If you need help with this, ring BRIAN FISH at DFF International on 0117 968 1148
Goods Vehicle Operating Costs 2011 31
Goods Vehicle Operating Costs 2011 32
27
DFF International Transport and
Distribution Consultancy
DFF INTERNATIONAL provide distribution-related consultancy services to manufacturers, service
companies and transport operators to help them to solve specific problems or to improve operations and reduce costs.
Management Consultants are usually used for one of three reasons:
Because the company’s own management cannot spare time from the business to find the solution.
Because the Consultants have specific experience and knowledge which is relevant to the problem.
Because an experienced outsider can often identify solutions more clearly than someone immersed in the business.
DFF INTERNATIONAL is staffed by experienced line managers from a variety of transport and logistics
backgrounds. This means that, for any problem in this area, we can provide a consultant who can quickly understand the task using relevant experience.
As we specialise only in this area of business, we can hold up to date, detailed information on both the supply and operations markets. We also have a large number of specialist national and international associates on whom we can call for detailed input.
The areas of our experience which are regularly used by UK Own Account and Hire or Reward operators, can be summarised as:
● Transport and Distribution Operations
● Vehicle Acquisition and Maintenance
● Warehouse Design and Operations
● Transport Costs and Accounting
● Workshop Operations and Costs
● Marketing and Tender Preparations
The starting point in any project is for one of our consultants to visit you to hear about your area of concern and to understand the type of project that you might have in mind. Assuming that there is some complexity in the project, we might then suggest a free survey without commitment. We would, then, spend several hours with you gathering information and further understanding. Based on this we will prepare a detailed proposal, fully costed, explaining exactly what your company would get from the project.
During the project we work closely with your management to ensure that they fully support our developing conclusions and that, when our final report is prepared, the findings are fully workable and provide a valuable contribution to your business.
Should any of the suggested areas be a source of concern, now or in the future, please contact Brian Fish at our Bristol Office to arrange a meeting.
DFF INTERNATIONAL Ltd
14 Stoke Hill
Stoke Bishop
Bristol BS9 1JH
Telephone: (0117) 968 1148 Fax: (0118) 963 7923
email: brianfish@dffintl.co.uk
© The Road Haulage Association and DFF International Limited 2011
Midlands & Western Region
Roadway House
Cribbs Causeway
Bristol
BS10 7TU
Tel: 0117 9503600
e-mail: midlands-western@rha.uk.net
Regional Director:
Nick Payne
RHA Regional Offices
Scotland & Northern Ireland
Roadway House
The Rural Centre
Ingliston
Newbridge
Edinburgh
EH28 8NZ
Tel: 0131 472 4180
e-mail: scotland-northernireland@rha.uk.net
Regional Director:
Phil Flanders
Northern Region
Roadway House
Littlewood Drive
West 26 Industrial Estate
Cleckheaton
BD19 4TQ
Tel: 01274 863100
e-mail: northern@rha.uk.net
Regional Director:
Steve Biddle
Southern & Eastern Region
Roadway House
Bretton Centre
Bretton
Peterborough
PE3 8DD
Tel: 01733 261131
e-mail: southern-eastern@rha.uk.net
Regional Director:
John Howells
© The Road Haulage Association in conjunction with DFF International Limited 2011
Recommended