Story at a Glance

Ways to minimize delivery expense...compensation strategies analyzed...how to determine favorable variations for individual business.

generate $1,500,000 in delivered sales before a contract delivery service is cost effective to the user and profitable to itself.

(4) Cost Effective Wages are fixed costs against seasonal sales. Overtime increases this burden. Incentive programs are designed to pay more when more work is performed, but only when performed. Contracts are designed to pay only for work done.

(5\ &lL Evoluate Wages go on regardless of what is accomplished to a point. The daily and routine tabulating of performance goes on under incentive and commission programs. Contract services are generally invoiced weekly.

(6) Requires Performonce Standofu Wages address hours put in. Incentives and commission programs require evaluation and planning to insure effective and measurable contribution. Contracts are agreements reduced to writing to insure mutual benefits to both parties.

(7\ Aid Control Wages do not provide for check points on individual performance. Measurable individual or contractual guide Iines generate gauges and comparisons on productivity.

(E) Eliminates Driver Overtime Wages and wage incentive programs do not exclude the cost of working overtime. Commission and contractual programs are paid on performance, not time spent.

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WHAI DOES DELIVERY REALLY COST?

To determine the cost of trucks and include the following factors (per truck):

Depreciation

License/SE Taxes

Insurance

Garaging

Administration

Maintenance/Repairs

Washing & Repainting

Tires,/Tubes

Crease,/Oil

Fuel Equipment

TOTAL ANNUAL OPERATING EXPENSES

TIMES NO. OF TRUCKS IN FLEET equpment, To determine the cost of delivery labor, the following factors: include Cost of Monev

Driver wages

(wages) x (no. of employees)

Mechanic wages (wages) x (no. of mechanics)

Overtime wages (1590)

Fringes (2590) (medical, workman's comp, other insurance, sick leave, holidays, absenteeism, etc.)

Taxes

FICA/Social Security (7qo)

Federal (.70/o of $6,ffi per employee)

State (varies)

Local (varies)

Disability (l9o)

Payroll overhead (4%o)

Supervisory & management salary & fringes (690)

Outside contractors

Cost of damage claims

TOTAL COST OF LABOR lncluding the items listed above, the Hertz Corporation has detemined the operating costs of is renta.l/leas mediumduty dies€ls with an average of l5,m miles per year at $1.35 per mile (adjusted for inflation). This frgure may be used as a guideline to detemine if your costs are in line. However, the cost p€r mile increases sharply for trucks with more than 50,m odometer miles.