Posted by: Fred Henderson on Nov 01, 2011
We are a dedicated bunch of people, us Breakdown and Recovery operators, of that there is no doubt but it never ceases to amaze me how many people are pushing on and doing jobs, providing a wonderful service often without any thanks or appreciation, as we have seen with the recent Green Flag contract, without working out whether they are making a profit or not.
I have seen 12-ton transporters carrying motor-cycles; I have seen 10-ton transporters on many occasions, hundreds of miles from home, with a Nissan Micra or something similar on their back. This surely is no way to run a business. In fact, I should tell the Friends of the Earth what a waste it is.
I constantly talk to operators and they don’t know how many miles to the gallon each of their trucks does or, in fact, how much it costs them to run at all. They know how much it costs to buy and they never sell them anyhow. It will come as no surprise to people who know me when I say I know how much every job makes; how much every truck costs to run every yard; and, apart from some of the stupid Police jobs, we make certain that every job makes a profit. If it turns out to be too small a profit for the risk, we won’t do it again.
Here are just a few examples of how some operators can make money and others succeed in losing it. Firstly, the way to value any Breakdown work is how much you are actually being paid and at the same time how much money is left over after up-front costs: at no time have I listed the many other overheads. I like to think that we work for no less than £40 per hour: £30-40 might be alright but it is stretching the limit: remember there is a lot of standing waiting. I make the following examples of the good and the bad and the ugly. I am also assuming, for ease of calculations and to reducing the list of permutations, that these jobs are all out of hours (less profit).
Example One: Local roadside assistance jobs, jump starts, wheel changes, etc., work to a turnout of £35. It is easy to do two or more every hour. If we then say £15 labour; £6 for fuel; £49 left over per hour. Brilliant is the word and easily achievable.
Example Two: Light recovery vehicle or van and trailer carrying a small car (a trailer would take a Mercedes), driving on A-class roads or motorway, averaging 55 to 60 mph around £1 per mile; cost of labour £15; fuel £12 (28 mpg); money left over £30-ish per hour. (If it is Europe Assistance at 80p per mile you are left with only £18.) First warning.
Example Three: (The most popular usage) A 2 ½-ton Transit Van is placed on a 7 ½-ton transporter and despatched on a single-carriageway A-road, and there are plenty of these: average speed 36/40 mph; labour £15; fuel £15 (15 mpg); money left over £6/8 per hour. (If it is Europe Assistance it is practically nothing.) We are now starting to face reality.
Example Four: A Sprinter van or Motor home requiring a 10- or 12-ton transporter, travelling on A-road or less; average speed 30 mph; labour £15; fuel £15 (12 mpg); money left over, nothing. Economic Suicide!
OK! People can shuffle and pick holes in this as much as they want. For example during the day we only pay £9/10 an hour; and vehicles may do different mileages to the gallon, and sometimes the van and trailer jobs we can only average 50 mph. But I can certainly find plenty of transporter jobs, especially to Scotland, which are not worth doing and we don’t do them. Because of drivers’ hours we regrettably can only take them about 20 miles because they always happen to be at the end of a shift, if you get the gist.
I never cease to be amazed how operators often follow and mimic one another. I know I run my business different to most people, while everyone around us are using the same format and I would like to think there are other operators who are individuals because these are the ones that will survive.
I suppose I have established a reputation for complaining, certainly about unnecessary quangos and things, but I have never really had a go at the Recovery Clubs because they provide our livelihood. These examples I think show that if a business is micro-managed or perhaps lucky enough to be in a productive area, there is good money to be made working for Clubs, But one size does not fit all and if you are in the wrong place with the wrong contracts, working to the present rates, there is a good chance that it is not viable: and these are the hard facts.
F.W. Henderson, F.I.M.I., Breakdown Doctor (Now dealing with Industry Ill Health)