The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-17
REAL TRUCK COSTS
HARD TO COMPUTE
New System Planned to End
Doubts as to Operating
Expenses.
by III. A. TARANTOUs.


what his vehicles are costing him and
what they are bringing in every day,
every week and every month OF the
year. Without this certain knowledge
IL very likely that he may operate
over an extended period at a loss. In
actual practice this condition has
caused the failure of more motor truck
operators than any other whatsoever.
Until very recently the entire subject
OF cost keeping for motor truck opera
tors was only dimly understood. Inc
methods used were incomplete and ire
quent failures resulted. To-day we are
gradually evolving complete and ac-
curate method of keeping costs. Even
within the last year many developments
have accrued in this field. In the pres
ent and succeeding articles u Is pro-
posed to explain modern cost Keeping
systems and to indicate the recent I'M
provements which have been made In
this respect
Internationally more has been written
about the operating economy or motor
trucks than any other one subject in
yolyed The manufacture and sale or
commercial motor vehicles has been
pursued as an industry for more than
twenty years, yet there is no vital SUBJ
Ject concerned with motor transport re-
garding which so little Is actually
known.
Perhaps one reason for this IS that
the economy of motor transportation is
30 obvious and the sloth of horse trans
portation so Intolerable that operating
cost has not been determining con-
sideration, but the fact remains that
operating motor trucks Is business
and worthy of as close study by users
as any other enterprise III which an
equal amount of capital is invested
No hot ha cuhiQpt of cost account
Ing has been altogether neglected, for
ever since the trucks inception certain
numbers of students have diligently
studied costs. Scores of so-called cost
system have been spread broadcast. Some
orignators printed them for distribu-
ton gratis and scattered them by the
ton. Others compiled elaborate OUTFITS
for sale at fancy prices. Associations
appointed committees to study the sub
ject. Practically all of the important
journals Of the industry issued so-called
standard systems. Manufacturers of
trucks and tires employed expert ac-
countants to compile systems and tabu-
late statistics. Advertising literature
fairly scintillated with imposing and
plausible columns of figures. but no.
where could two separate cost state
ments be directly compared. No two es-
Inmates included all the items necessary
way. Nearly all compilations and sys-
TENS showed on study that certain vital
items had been omitted. Nowhere were
the methods of figuring depreciation, in
terest, overhead of performance uni
form
Some deprecated on a mileage basis
Some subtracted the cost of tires from
the principle. Some charged interest at
the legal rate on the whole investment
oh, s.,+1 1,aTf tI.A In,
vestment; others on a sliding scale, with
the depreciation subtracted from the
principal Some included packing ship
ping room expenses, garage. light and
heat in delivery cost, and others did
not. And performance The term ton
mile slid glibly from many tongues, and
Vet nowhere was there agreement as to
just what this term meant or how it
should be figured.
Besides this confusion of tongues"
cost research has been impeded by re-
luctance on the part of many operators
to reveal their costs of operation for
various reasons, mostly short sighted,
and oblivious of the fact that only
through free interchange of experience
can real efficiency be attained.
Fortunately this attitude is changing,
as many who formerly refused to permit
others to see their figures have learned
that ofttimes they were losing more by
this Chinese wall policy than their COM
petitors could hope to gain by give and
take attitude. Equal in Importance to
the change in the disposition toward
cost accounting by users is the success
full evolution OF universal system OF
motor truck accounting.
BY means of series OF truck owners
conferences held in a dozen or more of
the principal cities of the country during
the last year and half the national
standard cost system for motor trucks
has been compiled and distributed to
the operators of thousands of motor
trucks in all parts OF the country.
Truck and tire manufacturers have dis
carded their own systems and adopted
the national standard system. News
papers and magazines throughout the
country have published articles about
the system, and already data compiled
on the standard forms are coming into
the headquarters OF the Truck Owners
Conference for compilation and study.
One may quite naturally wonder how
this newest of standard systems differs
from its I'll starred predecessors and for
what cause II has succeeded on the
graves OF their failure. Primarily Its
success Is based upon the fact that IL
originated in a conference representing
the ideas Of many experts with many
points of view. II was not produced az
business enterprise. but purely as
service to operators of motor trucks,
and Is distributed without pecuniary
gain TO any one at the cost of publica-
ton. IL was not restricted to any one
means of distribution. but is being sold
by two prominent loose leaf book manu-
facturers by the Truck Owners Con-
ference, by magazines and by truck and
tire manufacturers. A producer of cal
culating machines is pushing IL. Some
manufacturers are purchasing large
quantities for distribution as standard
equipment on their products. A truck
Euilder Is conducting prize contest for
drivers and shipping clerks based on the
national standard system.
As 70 the system ITSELF IL represents
distinct advance over any similar pre-
vious attempt, not only in the manner OF
its origin and the methods of distribu-
tion. but In many OF its accounting fea-
lures. The old shibboleths of truck cost
accounting have been eliminated. 1t is
not cut and dried, furthermore but Is
subject 20 annual revision by n commit
tee OF experts representing varied inter-
ests so that II will be kept up to date
ana viii be accommodated to changes In
conditions as time goes on
Subsequent articles in this series will
deal with the indispensable items which
go to make up the true cost OF operating
n motor truck. many of which are ordi-
narily overlooked tho matter of per-
Torrance and its Determining fnfiuance