Highways and Highway Transportation

by George R. Chatburn

Factory Products.

—Scarcely a manufacturing industry but that owns motor trucks, some of them running into the hundreds. No doubt these trucks have had their effect on the goods manufactured just as any other machine introduced into the process might do. In some instances goods that were marketed through jobbers are being sold directly to the retailer and sent to them by routings which return to the same customer every day, every two days, twice or once a week, or once a month, or in such regular periods the customer may look forward and depend upon the coming. Packing houses by delivering meat with truck directly to the retailer’s butcher block daily have practically driven out of business the old slaughter houses with their unpleasant odors and unsanitary conditions.

Special bodies have been devised for the different manufactured products. A slatted rack accommodates nearly 300 empty barrels; tanks are made to haul milk, gasoline, or other liquids; cracker factories have racks which will accommodate cardboard cartons without injury by crushing; low long-bodied trucks upon which cotton bales may be placed without much lifting lessens the time and labor of loading; different-sized drawers on the inside of a body have been used to take clothing-store goods to customers in outlying districts; plumbers fit up shops on wheels, claiming thereby to save time and expense to their patrons by not having to go back to the shop numerous times in the course of a job to get tools and supplies; furniture and automobile trucks have large roomy bodies to carry bulky but not very heavy goods. Hoists, cranes, tipping bodies, combination bodies, conveying belts and chains and many other devices facilitate rapid unloading and loading.

By sending goods from factory to retailer by motor railway terminal expense is cut out. Just how far it is profitable to send goods by truck is a question depending on the relative terminal charges, the hauling rate, and the collecting charges. The collecting charges at a factory might or might not be the same for shipments by rail and by truck. If the railroad switch is such that there is no hauling from factory to car except that on the floor of the factory itself, there would be no difference, otherwise there would be the expense of hauling to the loading tracks. If the expense of selling is not affected by motor hauling the only thing to be considered is the actual cost of transportation. If this be taken to be made up of two items, namely, terminal costs, and hauling costs, the distributing charge by railway may be written:

D = T + Rx

where	T	is the railroad terminal cost;
	R,	the railroad rate per mile cost per unit-package, barrel, cwt. or ton;
	x,	the number of miles hauled.

The distributing charge by truck would be a similar equation

d = t + rx

where the letters represent the same items referred to the truck. If D is made equal to d, there results,

t + rx = T + Rx

and,

rx - Rx = T - t

x = T - t r - R.

Railroads do not separate the terminal and hauling charge for the good and sufficient reason that if this be done there are a number of other factors of transportation that could with equal reason be segregated. The terminal costs, and by that is considered all the expense except the actual cost of haulage, has been variously computed. G.M. Jones, Bureau of Foreign and Domestic Commerce, United States Department of Commerce, estimates “that the average expense of hauling a ton of freight 240 miles is 74 cents while the cost of handling the same freight at the terminals is 75 cents.”[196]

A more definite and possibly more accurate statement is that of the Inter-State Commerce Commission, also quoted by Lane, p. 53:

The combined average terminal cost at one end is shown to be 10.4 cents per hundred pounds. For two terminal buildings (origin and destination) this figure doubled results in 20.8 cents per hundred pounds; and as this figure contains no elements of overhead costs, or taxes, such costs are arrived at by dividing the terminal cost by the operating ratio.

The operating ratio of the Trunk Line roads for 1915, 1916 and 1917 is 69.6, and the result of dividing the terminal cost of 20.8 cents by the operating ratio is 30 cents per hundred pounds, which covers terminal expenses and overhead for less than carload freight.

An example may be worked out with the assumption that the railway terminal charge is 30 cents per hundredweight, the truck terminal charge is 10 cents, the railway haulage charge is 0.02 cent per hundredweight mile and the truck haulage charge 0.3 cent per hundredweight mile. Then the economical length of the haul must not be less than

x = 30 - 10.3 - .02 = 20.28 = 200028 = 5007 = 71 miles.

The length of haul varies directly as the difference in terminal charges and indirectly as the difference in rates.

The example given should not be applied generally, but each case must be considered by itself. If there are collecting and marketing costs, they may be added to the terminal costs and the sum treated as a terminal charge.