DFF INTERNATIONAL LTDintranet.rha.uk.net/docs/internet/operatingcosts/Cost Tables 2011... · DFF INTERNATIONAL LTD . Goods Vehicle Operating Costs 2011 2 2 Contents INTRODUCTION TO

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



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. ____________________________________________________________________________________


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.” ________________________________________________________________________________



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 [email protected]

mailto:[email protected]


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.



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.



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


7

Costs for a 7.5 Tonne Gross Vehicle








Costs


£


Depreciation 8,000

Licences 165



Interest on Capital (6.0%) 1,200


-----------------------------------------------------------------------



__________________________________________



Fuel 32.8

Tyres 1.7


-----------------------------------------------------------------------


__________________________________________




8

Costs for a 13 Tonne Gross Vehicle








Costs


£


Depreciation 8,760

Licences 200





-----------------------------------------------------------------------



__________________________________________



Fuel 37.4

Tyres 2.8


-----------------------------------------------------------------------


__________________________________________




9

Costs for an 18 Tonne Gross Vehicle (2 axles)








Costs


£


Depreciation 9,400

Licences 650





-----------------------------------------------------------------------



__________________________________________



Fuel 43.7

Tyres 3.1


-----------------------------------------------------------------------

Total Mileage Costs 56.8 __________________________________________




10

Costs for a 26 Tonne Gross Rigid Vehicle






Average miles per gallon 9.5


Costs


£


Depreciation 12,800

Licences 650





-----------------------------------------------------------------------



__________________________________________



Fuel 55.2

Tyres 4.1


-----------------------------------------------------------------------

Total Mileage Costs 72.1 __________________________________________




11

Costs for a 32 Tonne Gross Rigid Vehicle (Tipper)








Costs


£


Depreciation 15,350

Licences 1,200





-----------------------------------------------------------------------



__________________________________________



Fuel 65.5

Tyres 5.3


-----------------------------------------------------------------------


__________________________________________




12

Costs for a 32/33 Tonne Gross

(4x2+tandem) Combination








Costs


£


Depreciation 8,400

Licences 1,200





-----------------------------------------------------------------------


Time Cost per Day £258 + £10 for tandem curtainside trailer

__________________________________________


+ TRAILER


Fuel 58.2

Tyres 1.4 2.2

Repairs and Maintenance 8.6 3.6

------------------------------------------------------------------------------

Total Mileage Costs 68.2 + 5.8

_______________________________________________




13

Costs for a 38 Tonne Gross

(4x2 + tri-axle) Combination








Costs


£


Depreciation 10,000

Licences 1,200





-----------------------------------------------------------------------


Time Cost per Day £289 + £11 for tri-axle curtainside trailer

__________________________________________


+ TRAILER


Fuel 65.5

Tyres 1.7 2.4


------------------------------------------------------------------------------


______________________________________________




14










Costs

Time-Related Per Annum £


Depreciation 11,420

Licences 1,850





-----------------------------------------------------------------------


Time Cost per Day £303 + £11 for tri-axle curtainside trailer

__________________________________________


+ TRAILER


Fuel 67.2

Tyres 1.7 2.4


------------------------------------------------------------------------------


_______________________________________________




15










Costs


£


Depreciation 12,900

Licences (£650, combined transport) 1,200





-----------------------------------------------------------------------


Time Cost per Day £319+ £11 for tri-axle curtainside trailer

__________________________________________


+ TRAILER


Fuel 72.8

Tyres 2.5 2.4


-------------------------------------------------------------------------


____________________________________________



Costs for a 32.5 Tonne Gross

Drawbar Combination (2 axle tractor, 2 axle trailer)


Vehicle Price (representative) TRACTOR £70,000






Costs

Time-Related Per Annum £


Depreciation 10,000

Licences (£640, combined transport) 880





-----------------------------------------------------------------------


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


Fuel 58.2

Tyres 4.1 2.2


------------------------------------------------------------------------------


______________________________________________





17

Costs for a Tandem Trailer (Curtainsider)





Costs


£


Depreciation 1,700

Licences

Vehicle Insurance

Goods in Transit Insurance


Overhead per vehicle

-----------------------------------------------------------------------


Cost per Day £10

__________________________________________

Note Operators using more than one trailer per tractor should adjust this cost as appropriate.


Fuel

Tyres 2.2


-----------------------------------------------------------------------


__________________________________________



18

Costs for a Tri-Axle Trailer (Curtainsider)





Costs



Depreciation 1,900

Licences

Vehicle Insurance

Goods in Transit Insurance


Overhead per vehicle

-----------------------------------------------------------------------


Cost per Day £11

__________________________________________

Note Operators using more than one trailer per tractor should adjust this cost as appropriate.


Fuel

Tyres 2.4


-----------------------------------------------------------------------


__________________________________________



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: [email protected]

© 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


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


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.


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.



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


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.


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



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: [email protected]

© The Road Haulage Association and DFF International Limited 2011


Midlands & Western Region

Roadway House

Cribbs Causeway

Bristol

BS10 7TU

Tel: 0117 9503600

e-mail: [email protected]

Regional Director:

Nick Payne

RHA Regional Offices

Scotland & Northern Ireland

Roadway House

The Rural Centre

Ingliston

Newbridge

Edinburgh

EH28 8NZ

Tel: 0131 472 4180


Regional Director:

Phil Flanders

Northern Region

Roadway House

Littlewood Drive

West 26 Industrial Estate

Cleckheaton

BD19 4TQ

Tel: 01274 863100


Regional Director:

Steve Biddle

Southern & Eastern Region

Roadway House

Bretton Centre

Bretton

Peterborough

PE3 8DD

Tel: 01733 261131


Regional Director:

John Howells

© The Road Haulage Association in conjunction with DFF International Limited 2011





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DFF INTERNATIONAL LTDintranet.rha.uk.net/docs/internet/operatingcosts/Cost Tables 2011... · DFF INTERNATIONAL LTD . Goods Vehicle Operating Costs 2011 2 2 Contents INTRODUCTION TO