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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: Alexander Hamilton institute, New York Title: Retail delivery costs and methods Place: New York Date: [1916] ^^-^^110-7 MASTER NEGATIVE # COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD ^'^ 2 1^ Aloxandor Hamilton institute, New York, ••. Retail delivery costs and methods. Now York Alexander Hamilton institute [Cl916^ 21 p. charts, forma. 27-^ cm. At head of title: Modorn business. Report no. 74 o RESTRICTIONS ON USE: TECHNICAL MICROFORM DATA FILM SIZE: fS iTMj^k^ REDUCTION RATIO: N IMAGE PLACEMENT: lA (TJ^ IB IIB DATE FILMED: l?|-lH INITIALS: WW TRACKING # : m// 0/37/ FILMED BY PRESERVATION RESOURCES, BETHLEHEM. 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'^^^^^. 2.5 mm ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1234567890 t— » r\> IV5 CJ1 O CJI 3 3 3 3 01 o- I? ■D p |o >< 33 ^— t ^-< oorvi o 0) CT O >> is fi cob: ui< a\x. ^-< 00 INI O ^^. >^. > 0,0 o m Nj o o X < X -< rsi ■^ MODERN BUSINESS REPORT No. 74 Retail Delivery Costs and Methods 3 38c /^ 6 ALEXANDER HAMILTON INSTITUTE ASTOR PLACE. NEW YORK COPYRIGHT. J916. PY ALEX^NDER HAMILTON INSTITUTE All rightt for reproduction reserved :r::>2.sA-.s ^\z. intlifCilpoflmgork LIBRARY School of Business \ MODERN BUSINESS REPORT No. 74 Retail Delivery Costs and Methods Alexander Hamilton Institute ASTOR PLACE. NEW YORK Alexander Hamilton Institute ASTOR PLACE, NEW YORK ADVISORY COUNCIL JOSEPH FRENCH JOHNSON, D.C.S., LL.D. FRANK A. VANDERLIP, LL.D. JEREMIAH W. JENKS, Ph.D., LL.D. JOHN HAYS HAMMOND, D.Sc, LL.D. T. COLEMAN DU PONT, D.C.S. STAFF DWIGHT E. BEEBE, Collections HERBERT F. de BOWER, Advertising and Sales Policiei GEOFFREY S. CHILDS, Office Methods EDWIN J. CLAPP, Transportation and Terminal FacilitieM RAYMOND J. COMYNS, Personal Salesmanship ROLAND P. FALKNER, Business Statistics MAJOR B. FOSTER, Banking Principles CHARLES W. GERSTENBERG, Financial Problems LEO GREENDLIXGER, Financial and Business Statements J. ANTON de HAAS, Foreign Trade and Shipping EDWARD R. HARDY, Fire Insurance WARREN F. HICKERNELL, Business Conditions SOLOMON S. HUEBNER, Marine Insurance JEREMIAH W. JENKS, Relation of Government to Business JOSEPH FRENCH JOHNSON, Economic Problems; Business Ethics WALTER S. JOHNSON, Commercial Laic EDWARD D. JONES, Investment JOHN G. JONES, Sales Management DEXTER S. KIMBALL, Cost Finding BERNARD LICHTENBERG, Advertising Principles HARRISON McJOHNSTON, Business Correspondence FRANK L. McVEY, Economics JOHN THOMAS MADDEN, Accounting Practice MAC MARTIN, Advertising Campaigns G. F. MICHELBACHER, Compensation and Liability Insurance BRUCE D. MUDGETT, Life Insurance E. L. STEWART PATTERSON, Domestic and Foreign Exchange FREDERIC E. REEVE, Accounting Principles FRED C. RUSSELL, Auditing B. K. SANDWELL, International Finance W. W. SW ANSON, Money and Banking JOHN B. SWINNEY, Merchandising PETER P. WAHLSTAD, Credits WILLIAM H. WALKER, Corporation Finance RETAIL DELIVERY COSTS AND METHODS OUTLINE OF REPORT 74 PAGE I. The Use of Various Types of Equipment . . . .5 II. Mileage g III. The Moving Factor 7 IV. Increasing the Moving Factor g V. Fixed Charges High in Motor Truck Operation . . 8 VI. Depreciation g VII. Interest ^q VIII. Labor Cost 10 IX. Maintenance j^ X. Operating Expenses ^2 XI. The Human Element ^2 XII. Records and Reports . jg XIII. Routing Deliveries ^9 XIV. The Assembling of Materials for Delivery ... 19 ai PREFATORY NOTE A very important element in the cost of conducting a retail busi- ness is delivery. Shall motor trucks be used, or would horse-drawn vehicles be more effective? Or perhaps a bo)^ with a push-cart is all that is necessary. Many points nmst be taken into consideration if the correct solution is to be reached, and this Report will prove a valuable aid to the retail storekeeper by bringing these points to his attention and offering solutions to fit different types of business. J. i 1 RETAIL DELIVERY COSTS AND METHODS Delivery service constitutes a serious problem for managers of retad stores. This is an expensive service which the consumer de- mands of the retailer on the major portion of his purchases, without regard to whether they are large or small, valuable or trifling, so that in many cases the cost of delivering an article, if its pro rata share of that cost were assigned to it, amounts to more than the total sales value of the article. While the consumer demands this expensive service, there is no part of our whole business organization which is more vigorously criticized by the consumer than the retail dealer, smce his charges for service are a considerable part of the total cost of the article to the consumer, ranging anywhere from 10 per cent up to 75 per cent of the total cost of the article to the consumer in different lines of goods and different circumstances. Yet in spite of these large margins between cost and selling price, from which the consumer draws the conclusion that the retail dealer must be making an exorbitant profit and that his prices are unreasonably high, the majority of retail businesses are not highly profitable. Therefore the charges added to the cost of goods by the retailer do not indicate a monopoly profit nor a large competitive profit, but an extremely high cost of doing business. It is only thru a deduction of these costs that the retailer can hope to make his business show a reasonable profit, since competition is so easily established in retail markets that it is impossible to raise prices above the point at which the average retailer can exist and stay in business without making any more than a reasonable return on his own labor and capital and without anything in the way of a true net profit. How serious a problem this delivery expense may become is illus- trated by the fact that in its careful investigation of the expenses of retail grocery stores the Harvard School of Business Administration reports that in some cases these delivery expenses run as high as 5.9 per cent of the net sales of the company. The common figure for such expense is 3 per cent of the net sales. The Use of Various Types of Equipment— The conditions under which delivery service is operated and the costs of the service under 4?' these conditions differ so widely that it is impossible to quote any- thing in the way of cost figures, which will be representative of the cost of a large number of businesses. As a result of an elaborate investigation of the costs of operating different types of equipment, the electrical engineering department of the Massachusetts Institute of Technology reports the costs of operating different kinds of equip- ment as follows: 1,000-lb. 1,000-lb. One-horse electric gasoline wagon Suburban Parcel Delivery: Cost per day $8.60 $10.40 $3.90 Miles per day 37 39 17 Cost per mile $0.28 $0.27 $0.23 Deliveries per day 128 138 46 Cost per delivery $0,067 $0,075 $0,085 City Parcel Delivery: Cost per day $8.30 $10.10 $4.27 Miles per day 33 34 16 Cost per mile $0.25 $0.30 $0,266 Deliveries per day 198 204 96 Cost per delivery $0,042 $0.05 $0,044 In these tables the figures are compiled from actual records, in which the figures for the electric and gasoline cars are on substan- tially the same conditions of mileage and number of deliveries, while the horse figures are for considerably less mileage and a smaller num- ber of package dehveries, but are taken from routes of the same gen- eral nature as in the case of the motor cars. Mileage. — In determining what type of equipment to use, the nature of the service should be carefully studied. Consideration must be given to the factor of mileage in the first place, since the mileage of each type of equipment is definitely Hmited. A horse can travel twenty miles a day with light loads, but this mileage must be reduced considerably as the load is increased. A formula for determining the mileage which may be safely obtained from horses is: D = 20 — 5 T, in which D is distance and T is tonnage. Thus, in case of half- ton loads, distance is equal to 20 — 5 times I/2 or 171/2 miles per day. The electric truck likewise is strictly limited in the mileage which it can perform, but not so closely limited as to be unable to perform most deliveries. At the present time the performance of electric cars on a single charge is Hmited to about forty-two miles. Many per- formances are on record far in excess of this distance, but this is the 6 limit which can be safely calculated in figuring on an electric car for delivery service. Mileage, of course, can be increased by the installa- tion of extra batteries or by the process of a partial recharge known as "boostmg," but these are expensive and subject the work to delays. The gasoline truck is probably the better vehicle for services which require over forty miles daily. It has no limitation as to distance, except the limitation of distance at which it becomes cheaper to ship by rail and use express companies for delivery. This point, of course, varies both with the amount and regularity of the packages to be delivered, and the mileage. The Moving Factor.— An important consideration in determining the type of equipment which shall be used for delivery service, is what IS known as the moving factor, or the ratio of the time that a vehicle IS m motion to the total working time. This moving factor varies widely m different types of delivery service. For example, in a densely populated section of a large city, there are likely to be a great number of deliveries made within a limited area, which makes an extremely low moving factor. In New York City there are de- hvery routes which do not actually include more than four miles of travel, on which two men with a horse and wagon are sent out for a half day. The moving factor in this case is only 16 per cent, assum- ing that the horse travels at the rate of five miles an hour and is there- fore actually in motion eight-tenths of an hour. In such a case a horse is by all means the most economical form of delivery, since a motor thru its rapidity of motion, even if it moved at a speed of twenty miles an hour, which it could not do on such short distances could save only 36 minutes on a half day's work over such a delivery route. This would be totally inadequate to compensate for the greater cost of the motor vehicle per day. Where density of deliveries is unusually high, and distances are short, it follows that the moving factor is low and in most cases horse delivery is cheaper than motor car. In the case of small markets doing a strictly local business, which IS practically all within a few blocks of the store, a boy with a push- cart or basket is, of course, a vastly cheaper means of delivery than any form of horse vehicle or motor car. This, however, applies to a comparatively few concerns and is often considered objectionable in that customers often demand their goods in a fine-looking equipage. On routes where the moving factor is moderately low and the density of deliveries is comparatively large, the electric vehicle has an ad- vantage of greater speed over the horse and of lower cost over the 7 1 ■ gasoline motor. This advantage is particularly marked over the gaso- line motor as the density of deliveries increases, because frequent starts and stops greatly increase the expense of operating a gasoline car. There is always the tendency on the part of the drivers where they are making many short stops to let the engine run, so that over a route in which deliveries are frequent, a gasoline engine is hkely to run continuously. On delivery routes in which the density is low and in which mileage is large, or which have a high moving factor, the gasoline car is superior, since its greater speed and low operating cost on long runs suit it particularly to this kind of business. Increasing the Moving Factor. — In the operation of motor trucks of all capacities it is essential to keep the moving factor as high as possible. It has been the experience of many concerns which have replaced horse equipment with motor trucks, that the cost of their hauling has increased with the change, because they have attempted to handle the motor trucks in the same way as they have previously handled their horse equipment. When changes have been made in the methods of loading and unloading goods to reduce considerably the time of standing for loading, the cost of their hauling has de- creased to a point considerably below the cost of doing the work with horses. A case may be taken from the hauling of coal. When the coal is carried into a cellar-way, or unloaded with a shovel so that the time involved is considerable, a horse team will do the work cheaper, even on hauls of considerable distance. But if the coal is loaded in- stantaneously from an overhead pocket and may be dumped in un- loading with an automatic hoist, the motor truck will be the most economical means of delivery. The installation of motor trucks in place of horses requires usually the development of automatic means of loading and unloading, which will result in keeping the motor truck on the road a large part of the time. Fixed Charges High in Motor Truck Operation. — The impor- tance of what was stated above regarding the necessity of keeping motor trucks moving to make them profitable will be appreciated, when it is considered that the cost of operating motor trucks consists of about 75 per cent of fixed charges, which are incurred whether the truck is used or idle, and about 25 per cent of operating expenses, which vary practically in proportion to the mileage made by the truck. In this estimate the wages of the driver are considered as part of the fixed charges. This would be eliminated in case the truck were to 8 stand idle for a long period of time and then would materially reduce the cost of carrying the truck in idleness. The proportion of fixed charges is somewhat higher in the case of the gasoline motor than in the case of the electric motor. In the case of horse equipment the extra charge for the horse is practically a fixed charge, altho in the case of a long period of idleness this charge could also be reduced by laymg off the driver and the reduction of the feed given to the horse. For purposes of considering idle time, which occurs for short periods at mtervals and in standing waiting for loads, or unloading, in aU of these cases there is a very large proportion of the cost which is abso- lutely fixed. Depredation.— The application of the motor truck to industrial purposes is so recent and has been so rapidly changed and improved smce its advent into the business world, that there is as yet no well- developed standard for the depreciation of motor truck equipment. The exhaustive investigation of the Massachusetts Institute of Tech- nology, however, resulted in the conclusion that the life of an electric motor truck may be safely figured on an average of eight years, and consequently an average allowance of 12I/2 per cent a year should be made for depreciation. The average life of a gasoline truck as determmed by the Institute, is estimated at ^y^ years and conse- quently must be depreciated at the rate of 20 per cent a year. This does not, of course, mean that any particular motor truck will last this number of years, but it does indicate that with reasonably good care, the average of a fleet of motor trucks should reach these figures. From the total value of the trucks when they have depreciated, the junk value which remains at the end of the useful life of the truck must be deducted. This, however, is a comparatively small item in the case of motor trucks. There is likewise a wide variation in the practice of different com- panies in depreciating their horse equipment, but the tendency is to regard the active life of the horse at about four years, under condi- tions of regular and hard service. At the end of four years of hard service a horse is often in condition to work, but its capacity has probably decreased so that it is considered economical to sell the horse and secure a new and younger one which will be capable of more efficient service. Such a horse, of course, has a considerable value, so that the amount of depreciation to be figured is not 25 per cent of his full value, but 25 per cent of the loss in value. A wagon should be capable of ten years' service, and 10 per cent is a reasonable allow- 9 r'-A ance for depreciation on wagons. Harness and other horse equipment are subject to a somewhat higher rate of depreciation than wagons, but a 10 per cent charge covering all equipment outside of the horses should amply provide for depreciation of this type of equipment. Interest— The best practice includes a charge for interest in the cost of any form of equipment. This, however, should not be made on the total purchase value of the equipment, since it is to be depreciated annually by a certain amount, thereby reducing the amount of the investment^n material. Consequently, the rule is to charge interest at 6 per cent on one-half of the investment value of an equipment of this nature. This apphes to both motor truck and horse equipment. The insurance of motor trucks varies considerably under different forms of contracts and in different hues of business, but it may be estimated at about U/s per cent on one-half of the investment value for electric trucks and about 21/2 per cent on one-half of the mvest- ment value for gasoUne trucks ; this will vary somewhat from place to place. A charge must be included in the expense of operating dehvery equipment for garage or stable purposes. This varies largely accord- ing to the locahty and conditions. In many cases where a concern owns its own stables or garage equipment, the item is overlooked and not included in the charges. For the garage, a charge must be allowed varying from a low figure in country districts, up to about $300 a year in large cities where land is extremely valuable. Three hundred dollars per year would probably cover the garage expense of the largest motor trucks in the larger cities. Labor Cost.— The wages of drivers for these trucks also vary considerably in different locahties. Operators for gasohne trucks require a somewhat higher degree of mechanical skill than do drivers of electric trucks and command usually from $2.50 to $4.00 per day. Drivers for electric trucks can be obtained for a slightly lower figure. The wages paid such drivers are stated as from $2.25 to $3.25 per day. Drivers of horse equipment can be obtained still cheaper. Many concerns have transferred their drivers from horse equipment, when that has been discarded, to the new motor truck equipment, but this is not always satisfactory and is scarcely advisable in the case of gasoline trucks. This illustrates one of the difficulties of introducing motor trucks as dehvery equipment, since the men who have been doing the driving and are trained in the knowledge of the detail of a business which pertains to the work of a driver, often have to be re- 10 placed with new men, who are not only more expensive to hire, but must be given training before they are really useful workers. This is also a point in favor of the electric truck, which is simpler to operate than the gasohne truck, and on which it is often practical to place men who have formerly driven horse equipment for the company. The item of drivers' wages, of course, is an important part of the cost of the operating delivery equipment. In some cases of the sub- stitution of motor truck equipment for horse equipment, the item of a reduction in wages of operators and helpers makes up the total saving which is effected by the change. For example, where a motor truck may be made to do the work of two or three horse trucks, it often requires only one operator and one helper, whereas it may be necessary to equip each of the horse trucks with one operator and one helper, because of the heavy weight of some of the goods to be handled. Such a consideration is one of prime importance in the determination to replace horse equipment with motor trucks. A similar consideration is the possibihty of operating a truck without any helper, which may be often gained by instaUing some automatic unloading device on which the first cost may be considerable, but which will be economical if it will enable the saving of the wages of one man on a considerable part of the work which the truck does. The matter of administrative expenses for motor truck equipment is one on which few data are available, but it is estimated that about $45 to $90 per year, per car, should be allowed to cover administrative expenses. Maintenance. — Under this heading are included all repairs, ex- penses for tires, parts, battery renewals, and other expenses of hke nature. Statistical reports obtained from a large number of cars operated under widely different service conditions and including cars of various capacities, show that these expenses for maintenance vary directly in proportion to the mileage made by the car. The actual amount of such expenses will, of course, differ widely with different cars and different types of service, but in all cases on a fleet of cars they will correspond closely to the mileage made. This expense also varies materially with the age of the car. It is unsafe to consider the record of a car for the first few months in service as any criterion of the amount of maintenance expense which will be incurred during its life. It has been determined that the expense for maintenance increases constantly in the case of electric trucks up to the period of eighteen months, after which the expense is practically constant for 11 <^T" the life of the car, except as it varies with the mileage which the car makes. In the case of gasoline cars there is a steady increase until the car is three years old and a much lower increase thru the remainder of the life of the car. Careful tests fail to show any considerable difference in the cost of maintenance incurred when sohd tires are used or when pneumatic tires are used. These tests were made with the idea that the use of pneumatic tires might reduce wear and tear on the car and make a considerable difference in the expense of main- tenance, but the results showed only such a shght difference, that it may be considered negligible. Operating Ea^penses.—OipeTSitmg expenses also vary in propor- tion to mileage. These expenses are, however, somewhat greater per mile on short hauls with frequent stops than they are on long steady runs. In operating expenses are included only expenses incurred for fuel, current, and lubricating oils. On a 1,000 pound delivery wagon these expenses will amount to about one and seven-tenths cents per mile for current and lubricants for an electric car and about two and six-tenths cents per mile for gasohne and lubricants for a gasoline car. These figures also vary under difficult operating conditions, as, for example, the existence of many hills or bad roads in the terri- tory covered. The amount of these charges also depends to a con- siderable extent on the care exercised by the driver in handUng his car and it is of great importance that he shall be properly instructed and given some inducement to handle his car in a careful way, to reduce the expense of operating. The Human Element— The proper supervision of drivers ot de- livery equipment is a trying problem, because the men are away from the eye of any supervisor and must be left largely to their own de- vices while on the road. It is easy to devise a code of rules for the ranajeme^ of equipment on the road, but it is difficult to secure the careful attention of the drivers to following these rules m such a way as to reduce the expense of operating to a minimum and to obtain the greatest possible results from the use of equipment It i beheved by investigators that the use of motor trucks m place of horL exerts a psychological effect upon the drivers ^f^^^^^^ their movements in harmony with the greater ^P^f « J^^^^/^^ ment. It is impossible to determine definitely what the extent o Tuch an effect is but managers of delivery services must draw their own conclusions as to the value of this feature. 12 Records and Reports. — It is of prime importance to obtain records of the performance of each individual operator and of each machine in a company's service, which will result in giving accurate informa- tion regarding the performance of different types of machines and also regarding results which different operators get from the same machines. Such records are essential to any effort to increase efficiency of delivery work. They give an accurate check upon the work of a driver when he is out of sight of the management. There is always the possibility of a considerable increase in efficiency thru compari- sons of the records of different men and different types of equipment. In Figures I and II, which follow, are reprinted the forms dis- tributed by the Studebaker Corporation to owners of Studebaker commercial vehicles, for their use in checking up accurately the work of their equipment and operators. It is advisable in almost every case to have forms for records devised especially to meet the needs of the particular cases. It is Hkely that these forms will not be ap- plicable to some lines of business, but the outlines will give an idea of what is needed. They consist of a daily report from each driver, showing the speedometer readings and the day's mileage, the number of packages delivered, the amount of gasoline, oil, or electrical cur- rent used in the machine, and any incidental expense or repair ex- pense which may be charged to the machine. These should be posted to a monthly summary of the driver's record from which can be com- puted the total expense for each of the items per mile, the number of miles per hour of working time made by the vehicle, the number of packages delivered per hour of working time, and the cost of dehvery per package for each driver. Such a series of records will give the basis for weeding out the poorer drivers, or improving the quality of their service. It has not been usual in most concerns to keep careful records of the work of their horse equipment in delivering goods, but it is profitable to keep records of the accomplishment of such equipment, as well as careful, close record of expense incurred in maintaining and operating power equipment. These reports should include care- ful record of the total working hours and idle hours for the horse, the number of packages delivered, and the mileage made by the wagon which can be obtained by the installation of a cyclometer on the wagon. The driver's record can then be checked by computing the number of packages delivered per working hour per mile. 13 I >= Studebaker Commercial Car OWNER'S MONTHLY OPERATING EXPENSE RECORD NOTEt— ThU farm t* b* mmim ay at mmi •§ m •f MM ia Mtketity mmd wk* auir httwm rfiMCt DRIVEIt'S DAILY OPERATINC REPORT, i la A* Typ^ jCapachr. JDm*. .Ifl- .F«r «f- T«WB- Sute. Mi Cwl Hm. Dn* W'.NUM TvM mmA Cuadtr DATE M*. 1*1 •OUACE N*.Pk«t Til*. r«lia Gal. •sir PUTIN TKANS. CREASE "INdUKTALEXr. Labor Rtwalw ftUtarial TbM POUSM REMAMCS 1 a 3 4 • • 7 • t 10 11 12 19 14 If 14 11 18 If SO - 21 22 23 24 25 2f 27 1 2f 2f 30 31 TeUk ^ TOTALS AND SUMMARY FOR THE MONTH NUMIER -# OwMf** ■My k* abtahnJ tram CmmbmcUI Ct Dimto*. S«iU«b«liw CerperaliMi •# AMarica. I>««*H. Mick 14> iJITICLE PIUCS EXTENSKW TeUl GaL GatoKw GaL Ubricatint OM Lb*. Traa*. Graaaa Matal PoUtk Body Poliah Tira Rapair Repairs to Car Drivan Salarica Dalhrary Boy'» Salary Garafiaf of Car if sot privately kapt lataraat oa f at % per moodi Dapredatioa oa $ at InsutaBca (lasured value $ per iBOBth Uccaee and tax %per BMBth ) PraBuum per month Total Day* Sarvica. Packacea Del- Total Mileaca- ■ Averate Deliveries per day_ _ " Mile* " •• - _ •• " per Gallon. " ** per day__ Delivery Coat per Package- Total Cost (everything included) I month's operatioo. NOTE TO OWNERi-A caraMkaapiac and dote analrii* ol llut report from moatk to Bonth will anaUe yoa to analy.e your dek*ery cost* ••> ile««l la the ovaal tkat yoa fca^e two or More coraarcial ear. ■» operatiea. Uu. aioatUy operatiat espeiue r«ord tiMuM anaUe you to atiake an lalelb*.*! t*«- pariMW o« Ike rdali*o ability of row driven to kaadU their car* eco>oiaicanra>de«>cieatl7. SbouU tbe drirara daily report .how ^o.no.1 *-^« »»* , U ptmrtiaa to ailaa IravelbJ. it worfd iadiaato tbat the Mvar b aot H i wi a g the I wkh aa eleclria starter, which caa bo «Md at ae addUiMal coil. at loadias and dcKvary The car M f-f'^ / CT^ei^ersr) /^pi-y^ 15 V, > jj 2 I i 8< .-s ^1 K > o» ^ > 1' 1? J^ J C Put in Qts. Lub. Oil 1 CL •* O 2^ • I-" L> 15 1 (3 tit2 d z O |2 I 5 a e « 2 ^ » -S o: I i a c3 I 1^ 5 01 m I 16 'i r 8" t I I I? '.s 1 11 el v^ ti #- / One of the most difficult problems in the management of equip- ment of this sort is to prevent abuse of the equipment by the drivers. The existence of abuse can be determined from these records which reveal conditions of extraordinary expense for repairs, or imusual consumption of oil and gasoline. In the case of horse equipment, this is perhaps more difficult, but some concerns weigh their horses periodically, attributing the loss of weight on the part of the horse to overwork or some form of abuse. In determining what type of equipment is most economical in performing a given delivery service, all of the above considerations must be weighed. The general results of such a summary, under average conditions for package deUvery and for coal and other bulk commodities, are summed up in two charts pubHshed by the Electrical Engineering Department of the Massachusetts Institute of Tech- nology, showing the cost for delivery in different types of equipment, working in different zones and under different conditions, both for electric current and gasoUne. These charts are reproduced in Figures III and IV on the following page. They indicate that for delivery inside of a two mile zone, the horse is the more economical means, while from two to three miles the horse and electrical apparatus are about equally expensive; from this point and up to the Hmit of daily mileage for an electrical vehicle, the electric motor truck is cheaper. This hmit is fixed in the chart at ten miles from the starting-point, which is considered to include the maximum area of service for an electric machine, when the irregularities of the run are considered. Beyond that point gasoline trucks are the only means of delivery which are available. In the case of a concern which works both horse and motor truck equipment, it is economical to work the horses entirely upon the nearby territory and to let the motor trucks begin their dehveries when they reach a point two or three miles from the store. It is usually the best policy, however, for a concern, unless it be an ex- tremely large company doing a heavy dehvery business, such as a large department store or an express company, to confine itself to one type of equipment, after determining carefully which type is best suited to the great bulk of its business. This standardization of equipment promotes economy in operation and maintenance. If, for instance, one type of machine is operated exclusively, the proper facihties for handling and loading apparatus to make it most effective in its work, may be developed, but if horse equipment and motor 17 n 1 10 / 0(^ ^ ni^i'- ^ ^ f6 ,"> ^ 7. ^ ,Y*-n;, p««<^y r ^ 5^ '^- < ^ ^ iSi w ^ . JiiiH ^^ ». 4-tTI 1 ttTVi 5J3-M » / ^- ji r— — • A'*' 'o/ T. ''P' fr *'yin vwr/avs xonem L O'^er curye for efectrie cars tsfor e/ectrieify at^^pe" >•»' A/j vpfier cor^e^t ¥¥^ai' Mtnhr. I ower evrtne for ^30 ///»*• cars tt f»r f0s«/tj*a at /T/ perya/Zon^ upp^r ci/n^e at £0/ p^r gayAf/t. » 4 t * < \ « 1 /tf /a^/np antf un/a»din^ po/ntt F/6 ¥^ Plot of CoAi-Deuyeffr frr/ffATe^, 18 Repro^ue^ Sy prrmStgitt* ^r»tr* ^^ptrton y^iaftov n»tam mf /1»rsa, e/mcfrte, »na C»a»hna Trucka' *jf trucks are operated in conjunction, the methods of loading which are suitable for horse equipment are likely to be applied to the motor trucks with poor results. Likewise, if electric and gasoline cars are operated, it is necessary to handle two entirely different types of motor car and two distinct sets of parts for different machines, and employ drivers skilled in the management of different types of equip- ment, all of which presents difficulties in management and tends to produce inefficient results. Routing Deliveries, — The territory which each vehicle shall cover on each trip should be carefully laid out by some one thoroly familiar with the business and the conditions of delivery service, taking into consideration the mileage which must be made, the number of de- liveries which occur on a trip under normal conditions, and the num- ber of trips which a vehicle is to make in a day. There is certain territory over which it is desirable for a company to make deUveries two or more times a day and there is other territory which may need to be covered only once a day. By estimating the average mileage to be traveled on a trip, and figuring an average amount of time for each of the daily average number of deliveries, their routes can be planned so as to occupy, with an allowance for loading time, the full time of the car. It is worth while, where a considerable number of deliveries are to be made, to send a man with a watch to make a time study of the delivery service. He can note on each of the trips that he makes the actual time required to deliver each parcel and the actual time for making each run between each point of delivery. Such time study will make possible the establishment of a much more accurate standard than can be obtained from the acceptance of the statistical results of the drivers' actual service. The timing of each step in the whole series of dehveries will often offer suggestions for improvement, from which the drivers may be trained to increase their efficiency. The Assembling of Materials for Delivery. — In the delivery serv- ice of large department stores, it is essential to keep the equipment on the road as much of the time as possible. The usual practice in such institutions is to assemble all packages for delivery on a certain route in a bin, so that the driver's load is ready for him when he comes to the store to load for a trip. A typical system of this sort is as follows : The packages for delivery are received in the assembling room from a chute. At the foot of the chute stands a man who is thoroly familiar with all of the locations of different addresses thruout the 10 territory to be covered and with the numbers of the routes. He takes each package as it comes down the chute and marks upon it the route number. The package is then placed on a conveyor running at right angles to the chute, which extends between two rows of bins, each one of which has a route number. From the conveyor the goods are thrown into the bin for the route number, which has been marked on the parcel. These bins are open at both sides and on the opposite side from the conveyor are clerks who make up the delivery lists. These clerks work up and down the aisles behind the route bins. As the packages come into the route bins the clerks take them and enter the name and address of the people to whom they are to be delivered, and the charges, on the delivery list. When a package has been en- tered on the dehvery list, it is thrown into another bin immediately opposite the first row and across the aisle, where it remains until the driver comes to load his wagon. Separate delivery lists are used for C. O. D. parcels and for parcels which have been paid for or charged to an account. At the time of the entry of these parcels on the delivery list, each one is given a list number which corresponds with the order of the printed numbers on the delivery list sheet. When the driver comes in to load his wagon he is given a sheet which is identical with the delivery list and then lists his parcels in the order of the numbers given them by the delivery list clerk. When he has taken all of the parcels out of the bin, the list which he has made is checked up with the list which was made out by the clerk. If there is any discrepancy it must be found before the goods can be removed from the store, but if the lists correspond, the driver signs the delivery list made up by the clerk as a receipt for the parcels in the bin and proceeds to load them in his wagon. After delivery routes have once been laid out by the management, it is necessary to leave the actual covering of the route entirely to the discretion of the driver, since the deliveries on various parts of the route will vary considerably from day to day. The driver will con- sequently not follow the same line of travel every day, but will vary his plan so that the section of the route in which the greatest number of deliveries lies will be covered first on any given trip. With this point in view the driver will arrange the goods in his wagon so that those which are for delivery on the streets which he will reach first are in the back end of the wagon and those which will be reached late on the trip are in the front end of the wagon. It is usually customary in large cities, or where there is danger of 20 > ^ theft, to send at least two men with each delivery vehicle, with instructions that one of them shall always be at or near the wagon. Much time can be saved for the vehicle by having one or more extra men, where deliveries are many within the limited space, so that two can work without taking both men out of sight of the vehicle. The distance which a vehicle must cover between the store and the first delivery is an important factor in economy of operation. Consequently, where a considerable volume of deliveries is made in suburban or outlying districts within a large city, it is usual to send the goods in bulk in large trucks to a suburban delivery station, where they are assembled for dehvery in smaller vehicles, according to well- defined routes. In sorting goods at the store for shipment to these outlying stations, the goods are often placed directly in extra bodies for the big trucks, instead of being placed in the route bins. The truck, when it arrives at the store, then simply leaves its empty body and the loaded body is placed on it, so that very little time of this expensive equipment is taken in loading and unloading. In the case of retail groceries and markets, where the driver goes out on one trip to take orders and make the deliveries later, it is usually necessary to have him assist in putting up the goods, since his time would be idle if the goods were entirely put up by some one else. It is not desirable to let the driver put up his orders entirely by him- self, since this offers an opportunity for dishonesty. In providing him with an assistant there is a check against dishonesty and a saving of time for the delivery vehicle. It is often the practice to have the shipping clerk call off to the driver the different packages as they are loaded on the wagon. This is by no means as good a check on the driver, however, as the signing of a delivery hst, made out by some other clerk and verified by the driver, as was outlined in the section above describing department store practice. 21 ^^A l):ZS i4^S /fl^ UGi 2 5 Date Due 1950^ 1^ /: Alexander Haniilton institute,N.Y. He tail delivery costs and methods COLUMBIA UNIVERSITY LIBRARIES 0041411650 i EH ^'^121994 A?5/-/ 0/271 JUN3 W3^ v^V .^v ^^ i«if . .;,??B?:,)-r»5T5 . irJ'- END OF TITLE