and cream weights varied only two per cent , but the 1 8 vehicles averaged 1 2 per cent i nc rease in petrol consumption under otherwise

identical

comitions. When it is

remembered that the

average "waiting-time" for

all New Zealand

is only

55. 28

minutes ,

i.e. the

average can

is

standing

still

only one-half of'

this time , it is a question

whether the dete

rioration of cream is

matched

by

the

in­

creased petrol consumption. When enqui� was

made

fUrt

h

er, it was revealed that

the awnings had to be removed each day after

cream

was

unloaded as

the

lorries were utilised for

general haulage

purpo

ses.

The cost

to the compaqy

concerned

amounted to

over £650

per annum

in petrol alone , besides

ot

he

r running

costs.

In addition,

1 800

hours of driver ' s time was consumed. plus a heavy replacem

e

nt

cost in

canvas

a

wnings

.

As cream

deteriorates

o� when standing still on back of lorries

(during

haulage 1

the current of

air is sufficient to

prevent deteriora ticm

)

, it is

considered that an

aver

age

of

less than

half

an hour exposure to

sun does

not warrant

the expense

of

increased

haulage

costs , espeoia.llJr in days

of

vaoreation.

36

The mmiber

of stoppages per mile causes a very considerable increase

in all

truck

running c oots

- especially

repairs

and maintenance . When

a

vehicle ceases to move , either the engine is left idling , or is turned off

and

started

ag

ain.

The

vehicles operating in Table XXX, for example, always left their

e

ngin

e

s

running,

even fo

r periods

up

to five minutes . They

a

veraged, a·. t o tal'

!1' 433

minutes

a day

in

engine

Unit costs of cream collection: The New Zealand average for all factories was 0.508d.. per lb. of fat. T!le dispersion of unit costs l ies between the range of 0.300d. t o 1 .4nd. per pound. There is no obvious relationship

between unit costs and scale , but there is a general tendency for \urlt costs

to be less with increase of scale. The 27 companies \vi th output of butt.er

less than 1 1000,000 lbs . per annwn, show wide dispersion of costs. Two comp­

ani·es have c osts under 0.4d. per lb. , another 1 1 companies have costs between 0.1l and

o.6d.

per lb. , five companies lie between

o.6

and o. s. , another five lie between 0. 8 and

1 .0d..

per

lb.

smd four have c.osts in excess of 1 .0d. per

lb.

The structure of unit costs for

all

companies is shcri\'ll in the folloong table.

TABIE �·

CREAM HAULAGE UNIT COSTS OF COMPANIES FOR

1

SEASON.

Size of No. of unit cost Truck c osts

in

lbs.

)

of cream mile per lb. Up to 1 ,ooo ,ooo 27 o. 667d.

)

1 ,ooo,oo1 to 2,ooo,ooo 27 o. 604d.

)

$.

2,000,001 to 4,000,000 20 o. 633d. 7

t

d. 4,000,001 to 6,ooo,ooo 1 3 0.51 6d. 1 1 d. *

6,ooo,oo1 to a,ooo , ooo 5 0.477d.

)

a,ooo,oo1 to 1 2,000, 000 2 0.432d.

)

1 3d.

Over 1 21000 1000 2 0.41 9d.

)

The data has been related to companies rather than factories, as

in

certain cases it was not possible to allocate costs exactly to individual factories.

3 6

(

cont.

)

less an economic expenditure than that which would be occas­

ioned by turning off the engine cUld recommencing it again, as is done in some companies.

One comp� supplied some ver,y interesting figures. They operated a. considerable fleet of vehicles - some on

milk

and cream haulage and some on town milk deliveries. On the cream and milk haulage section, the vehicles were six-tanners , whereas on the town milk supply routes

30 cwt. trucks were employed. While the petrol and oil consumption

was identical for both fleets , the repairs and maintenance on the

town supply routes were just double those of the vehicles used ex­ clusively f'or cream and milk haulage. It was considered that the ex­ cessive stopping , and starting per mile covered was the cause of the heav,y running costs. Moreover those vehicles on close� settled deliveries all had petrol costs of over

4d.

per mile.

There is an apparent decrease of unit costs with scale. In the

third class-interval there is an increase over the sec ond, but in the third class-interval four compa..rrl.es have c osts in excess of 1 d. Were these deleted, the decreasing pattern would have been uniform. The truck rwm

ing

costs per mile from data presented earlier are repeated for purposes of ccmparison only. These costs refer to 50 companies only and are placed in broader classifications. Whereas truck running costs per mile tend to increase,

unit costs per lb. of fat tend to decrease. This is due partly to larger bulk of cream car.ried by larger companies, and their tendency to allocate haulage costs elsewhere .

Distance of from and its relation to coats

:37

Tables

XXVI

and

XXVII

show the distance of suppliers from their relative :factories. Table

XXVII

shows the cumulative percentage of cream in class-intervals of 1 0 per cent together with distance from factory. This latter table will now be used to calculate the costs of cream haulage, as detennined by distance o:f' supplier from factory. Thus from Table

XXVII

it is assumed that the

. 2.1

first 10 per cent o:f' cream cost o:f' the total costs; that the first 6

20 per cent cost of the costs ; and so on through the table. The resulting costs are shown

in

the following table:-

37

Stric� speaking, the following table refers to c ollection costs, i. e. variable costs , and assumes the " sunken" costs of capital outlay on vehicles etc. , as constant.

POIN'.r INCREASES FROM FACTORY

of cream collected C1.lilD..llative cost as zone increases

classified. in zones of

1

in distance from

1 0}& of the cream costs

4.4.%

of total costs

2Cf%

of the cream cos·ts

7.7.%

of total costs

3o%

of ·the cream costs

1 0. �

of total cos·�s

4Q%

of the cream costs

1 3 . 2%

of total cos·:;s

so%

of the cream costs

1 6.4%

of tot.'ll. costs

6/J%

of the cream costs

20. �

of total costs

7afo

of the cream costs

25. �

of total costs

80%

of the cream costs

33. �

of total - costs

�&

of the cream costs

so.Q%

of total costa.

The table should. be read : the first

1 0,'lb

of cream in a hypothetical zone nearest t}:le factory costs

4.4.%

of the total costs; the first

2ff%,

of cream

(

including the previous zone or zones

)

nearest the faotor.r etc. , and so on.

It will be. observed that the last

1 0

per cent of cream collected actualzy cos.ts one-half of total costs on an average. Moreover, one-third of the cost ·rill bring in 80 per cent of the total cream, and approximately one quarter of the cost will bring in

70

per cent , ani one-fifth of the cost

60

per cent , and one-sixth of the cost

50

per cent.

The above table refers to data which represents a carefully selected

cross-section of all types of routes for factories of different s izes. It would appear i.--t Table XXVIII where

86

factories are examined, that suppliers

are further fran the factories than the suppliers of Table XXVI, from which ti1ese costs were taken. MOreover, it was assumed that the firat five miles of the route are identical with i;he last five miles of the route as far as costs are concerned. That is , it had to be assumed that the last few miles were just as easy going as the those nearest "the faotoljT - for costs were worked on the assumption that if the route were

1 0

miles long, the."'l the first two miles would cost just

20

per cent of the total costs. But the first two miles from the facto1y are usually "dead miles" of flat tar-sealed roads. Further from the f�ctory , the roads become more difficult 'to traverse , narrower, often hilly, or tertiary roads. Time consttJDed at the distant end

of the route was checked as being more than

40

per cent than at the beginning of the route in most cases , and running costs are probablY up to 20 per cent higher. Non-productive time increased with length of route also.

With so.roo large companies, with long distant routes and bad roads towards the terminals, as DU.ch as

60

to

70

per cent of total cost was in collecting the last

1 0

per cent of cream. This was because most of the cream ca.roo from loop routes with off-shoots of some distance, so that long mileages were necessary for a very small percentage of cream.

Smaller factories with shorter routes have a more compact cost struct­ ure, and can bring in

50

per cent of their cream for

25

to

30

per cent of the total cost. Those factories with most distant suppliers under

1 0

miles have a fairly evenly distributed cost pattern. One factory was selected

as typically spaced as far as suppliers went,

(

the most distant 22 miles

)

and the cost structure worked rut. Measured in 1 0 per cent of cream interval zones , the o ast pattern was :

2, 5 , 1 1 , 1 8, 27

(

at

50

per cent of cream

received

)

,

38, 51 , 65 , 82 arid 1 00

per cent respective�.

Vehicle-running costs are

60

per cent variable , and

40

pe r cent fixed. in character. Petrol c onsumption and repairs increase with the number of stops per mile

(

rather than by weight carried

)

. Rainfall

am

wind-drag increase petrol consumption considerabzy. Backing into stands , exoess

stopping , and over-speeding should be controlled or eliminated where possible. Running oosts tend to increase with the si:z:e of the COlllJ?al\V and the

mileage run. Efficiency tenis to decrease with scale 1 for larger colJi?anies

tend to go further for cream, and a1

though

unit costs appear to decrease with scale, when costs are adjusted to a fixed weight for all factories , a s

t

eep rise in unit costs is revealed."' This is because haulage costs in­ crease proportionatezy with distance

from

faotocy 1 while ore am offerings decrease . The most distant

1 0

per cent of cream lifted c osts about

50

per cent of total oosts. Non-operational time, too, terns to increase with scale

and

distance

from

factory.

SECTION y_.

ECONOMIC ASPEC

T

S

OF

TRANSP

ORT

EFFICIENCY

Efficiency

�n

cream collection is partly technical in character,

In document Efficiency in production of butter : being an investigation into certain factors affecting the economic aspects of technical efficiency of butter factories operating in New Zealand, with special reference to the1949/50 season : a thesis presented to the U (Page 167-172)