Integrated Transport Plan for Ghana

Transcription

1 Ministry of Finance and Economic Planning Republic of Ghana Volume 5: Transport Cost and Price Analysis Tool June 2010 Financed by the 9th European Development Fund Service Contract N 9 ACP GH019 In association with

2 Executive Summary This report presents the tool used for analysing the transport cost and price in Ghana. The analysis tool use jointly between two main models and will be provided on a CD: RED VOC model Computation of Vehicle Operating Costs calibrated with Ghana road and vehicles fleet characteristics A "Road cost and price analysis" model to compare costs and prices for freight forwarders developed specifically for the present project. The objective of the transport cost analysis tool was: to use the result as an input of the transport planning model for subsequent traffic assignment forecast ; use as inputs for the socio-economic evaluations of projects ; to help to identify the obstacles to more efficient transport. It helps to answer questions such as "Does the prices cover the costs for transport companies" ; to be used as a pedagogical tool in order to understand the mechanism and the main elements which shall be used to compute transport costs. Page 1

3 Contents Chapter 1 Transport Cost and Prices Analysis Tool Principles RED VOC model and parameters calibration Road Characteristics Vehicle Fleet Characteristics and utilization VOC Model Results and Interpretation Observations/Interpretation on Paved Road Observations/Interpretation on Concrete Road Observations/Interpretation on Unsealed Road Sensitivity of the Vehicle Operating Costs Cost and Price Components Variable costs Fixed costs Operational characteristics Empty mileage and dispatching Costs Load rate Costs and Prices computation Input values Results Sensitivity analysis Annexe 1 : Driver and Vehicle Licensing Authority (DVLA) Rates/Fees and Charges...29 Annexe 2 : Basic Input Data of the Road cost and price analysis model...32 Page 2

4 List of Tables Table 1 - Main road characteristics according to surface type 7 Table 2 Roughness according to road surface condition and surface type 8 Table 3 - Vehicle Fleet Characteristics 9 Table 4 - Utilization and Loading of vehicles 10 Table 5 - Economic Unit Costs 11 Table 6 Summary of VOC/vehicle-km by category of Vehicle (Paved Road) 12 Table 7 - Summary of VOC/vehicle-km by category of Vehicle (Concrete Road) 13 Table 8 Summary of VOC/vehicle-km by category of Vehicle (Unsealed Road) 14 Table 9 Variable economic costs for a flat paved road in fair condition ($/veh.-km) 16 Table 10 Variable financial costs for a flat paved road in fair condition ($/veh.-km) 17 Table 11 Type of Inputs taken into account for the Cost and Price evaluation 25 Table 12 - Cost and price computation 26 Page 3

5 List of Figures Figure 1 Variation of VOC Sale in relation with Roughness of the road 15 Figure 2 Variation of truck speed in relation with Roughness of the road 15 Figure 3 Sale price per km in relation with overhead costs and taxes values 19 Figure 4 - Dispatching Costs Generation Process 20 Figure 5 Variation of sale price per km in relation with the percentage of empty mileage 21 Figure 6 - Du Pont De Nemours Prerating & Dating Indicator (P.A.D.I.) 23 Figure 7 Variation of sale price per ton-km in relation with truck load rate 24 Figure 8 Cost Sensitivity Analysis 28 Page 4

6 Acronyms and Abbreviations AADT ITPG IRI OD VOC VoT Annual Average Daily Traffic Integrated Transport Plan of Ghana International Roughness Index Origin-Destination (usually refers to an OD pair or an OD matrix) Vehicle Operation Cost Value of Time Page 5

7 Chapter 1 Transport Cost and Prices Analysis Tool 1. Principles The objective of the transport cost analysis tool was: to use the result as an input of the transport planning model for subsequent traffic assignment forecast ; use as inputs for the socio-economic evaluations of projects ; to help to identify the obstacles to more efficient transport. It helps to answer questions such as "Does the prices cover the costs for transport companies" ; to be used as a pedagogical tool in order to understand the mechanism and the main elements which shall be used to compute transport costs. The analysis tool is developed on Excel in order for all the hypothesis and computation to be transparent to the user. It comprises the minimum macros possible for the same reason. All outputs may be automatically computed according to the parameters entered. Parameters of the transport cost analysis tool are calibrated to take into account the Ghanaian context. All available unit costs data were collected and introduced into the model. However, some costs may vary from one company to another and could be adjusted accordingly. Being a dynamical model, it is then possible to assess the sensitivity of transport costs to the various unit costs entered. The analysis tool use jointly between two main models: RED VOC model Computation of Vehicle Operating Costs calibrated with Ghana road and vehicles fleet characteristics A "Road cost and price analysis" model to compare costs and prices for freight forwarders developed specifically for the present project. Page 6

8 2. RED VOC model and parameters calibration The objective of using Roads Economic Decision Model, HDM-4 Vehicle Operating Costs Module (RED VOC) was to estimate Annual Average VOC per vehicle-km travelled for the various categories of vehicles used in Ghana under the different road surface conditions for each type of road facility. 2.1 Road Characteristics Road characteristics comprise the existing road and environmental factors. These include: Road surface condition (good, fair, poor) Surface type (paved, concrete, unsealed) Terrain type (Flat, rolling, montainous) Length of road Pavement structure and strength Altitude and rainfall Ministry of Transport calibrated values of parameters was used. The following road characteristics according to surface type were used in the model as illustrated in the following table. Table 1 - Main road characteristics according to surface type Carriageway Width (m) Speed Limit (km/hour) Paved Concrete Unsealed Page 7

9 Roughness rate according to the types of road surface and conditions modelled is presented in the form of Riding Quality Matrix shown in the following table. Table 2 Roughness according to road surface condition and surface type Road Surface Condition - Roughness (IRI) Type of Surface Good Fair Poor Bituminous Concrete Unsealed Source: Ministry of Transportation (HDM-4 Calibration for Ghana), March Vehicle Fleet Characteristics and utilization Taking into account distribution of vehicle fleet observed in Ghana, the following categories of vehicles are considered: 1. Cars 2. Taxis 3. Light Buses 4. Medium Buses 5. Heavy Buses 6. Light s 7. Medium s 8. Heavy s 9. Articulated s Vehicle fleet characteristics, and their utilization and unit costs are based mostly on values observed by the Ministry of Transport and Ghana Highway Authority. These values were calibrated for the model HDM 4 which is used to evaluate main road maintenance and development projects in Ghana. Vehicle Fleet Characteristics are illustrated in Table 3. Utilization and loading of vehicle are illustrated in Table 4. Unit economic costs by type of vehicle, illustrated in Table 5, are extracted from the report on Vehicle Operating Cost Data Collection for HDM-4 issued by Ghana Highway Authority in February Page 8

10 Table 3 - Vehicle Fleet Characteristics Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated Number of Wheels (#) Number of Axles (#) Tire Type (0-Radial-ply, 1 - Bias-ply) Projected Frontal Area (m2) Used Driving Power (kw) Used Braking Power (kw) Rated Engine power (kw) Source: Ministry of Transportation (HDM-4 Calibration for Ghana), March Page 9

11 Table 4 - Utilization and Loading of vehicles Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated Kilometres Driven per Year (km) 20,000 25,000 25,000 41,000 52,000 30,000 60,000 60, ,000 Hours Driven per Year (hr) 500 1,300 1,300 2,000 2,000 1,715 1,750 1,750 1,750 Service Life (years) Gross Vehicle Weight (tons) Payload Passenger Car Equivalent (#) Source: Ministry of Transportation (HDM-4 Calibration for Ghana), March Page 10

12 Table 5 - Economic Unit Costs Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated New Vehicle Cost ($/vehicle) 21,208 18,888 32,827 76, ,894 20,405 73,842 77, ,659 Fuel Cost ($/Litre for MT, $/MJ for NMT) Lubricant Cost ($/Litre) New Tire Cost ($/tire) Maintenance Labor Cost ($/hour) Crew Cost ($/hour) Interest Rate (%) Source : Report on Vehicle Operating Cost Data Collection for HDM-4 Ghana Highway Authority, February 2009 Page 11

13 3. VOC Model Results and Interpretation The Vehicle Operating Costs (VOC) varies in function of four main factors: The type of vehicle (car, bus, truck, etc ) ; The type of terrain (Flat, Rolling, Mountainous) ; The type of road (Paved, Concrete, Unsealed) ; The surface condition (Good, Fair, Poor) defined according to the type of road and the IRI (see table above). In Ghana, most of the roads may be considered as flat. Therefore, VOC model results are presented for each type of vehicle, type of road and surface condition considering that the terrain is flat. 3.1 Observations/Interpretation on Paved Road The following table describes the variation of the VOC per category of vehicle per surface condition (on a flat terrain) on a paved road in Ghana. Table 6 Summary of VOC/vehicle-km by category of Vehicle (Paved Road) Surface Condition Vehicle Type Good Fair Poor Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated Source: HDM-VOC Model computation Page 12

14 The following can be observed from the above Table: Operating costs are approximately four times more important for a heavy bus or a heavy truck and up to seven times more important for an articulated truck than for a car. Light bus VOC is approximately 50% higher than car VOC. If the road condition deteriorates (between a road in good condition and a road in poor conditions), VOC of cars increase by 11%. VOC of heavy vehicles and in particular buses is more sensitive to the road condition as a deterioration of the road lead to an increase of 25% of the VOC for a heavy bus and 20% for an articulated truck. 3.2 Observations/Interpretation on Concrete Road The following table describes the variation of the VOC per category of vehicle per surface condition (on a flat terrain) on a concrete road in Ghana. Table 7 - Summary of VOC/vehicle-km by category of Vehicle (Concrete Road) Surface Condition Vehicle Type Good Fair Poor Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated Source: HDM-VOC Model computation The following can be observed from the above Table: Operating costs are approximately four times more important for a heavy bus or a heavy truck and more than seven times more important for an articulated truck than for a car. Light bus VOC is approximately 45% higher than car VOC. Page 13

15 If the road condition deteriorates (between a road in good condition and a road in poor conditions), VOC of cars increases by 11%. VOC of heavy vehicles and in particular buses is more sensitive to the road condition as a deterioration of the road lead to an increase of 21% of the VOC for a heavy bus and 18% for an articulated truck. 3.3 Observations/Interpretation on Unsealed Road The following table describes the variation of the VOC per category of vehicle per surface condition (on a flat terrain) on an unsealed road in Ghana. Table 8 Summary of VOC/vehicle-km by category of Vehicle (Unsealed Road) Surface Condition Vehicle Type Good Fair Poor Car Taxi Bus Light Bus Medium Bus Heavy Light Medium Heavy Articulated Source: HDM-VOC Model computation The following can be observed from the above Table: Operating costs are more than four times more important for a heavy bus, nearly four time more important for a heavy truck and more than seven times more important for an articulated truck than for a car. Light bus VOC is approximately 55% higher than car VOC. If the road condition deteriorates (between a road in good condition and a road in poor conditions), VOC of cars increases by 16%. VOC of heavy vehicles and in particular buses is more sensitive to the road condition as a deterioration of the road lead to an increase of 29% of the VOC for a heavy bus and 22% for an articulated truck. Page 14

16 3.4 Sensitivity of the Vehicle Operating Costs The following figure illustrates how the vehicle operating cost varies according to the roughness of the roads for a medium truck on a paved flat road. Flat / 1-Paved / Medium Vehicle Operating Costs ($/vehkm) y = -2E-05x x x R 2 = Roughness (IRI) HDM-4 Values Polynomial Figure 1 Variation of VOC Sale in relation with Roughness of the road Subsequent figure shows the relation between the roughness of the road and the vehicle speed. Flat / 1-Paved / Medium Vehicle Speed (km/hour) y = x x x R 2 = Roughness (IRI) HDM-4 Values Polynomial Figure 2 Variation of truck speed in relation with Roughness of the road Page 15

17 4. Cost and Price Components The cost of a managing a truck breaks down into: variable costs (related to the use of vehicles) and fixed costs (which do not depend directly on the number of total kilometres travelled by trucks of the company) 4.1 Variable costs Variable economic costs Most of the variable costs taken into account into the Road cost and price analysis model are an outcome of the HDM-VOC model. They are computed in dollar per vehicle-kilometre. Costs depend from: the type of vehicle used the type of road the surface condition of the road An example of variables costs which may be used in the model for a flat paved road in fair condition is presented in the following table. Table 9 Variable economic costs for a flat paved road in fair condition ($/veh.-km) Light Medium Heavy Articulated Fuel economic costs Lubricants Costs Tire Costs Maintenance Parts Costs Maintenance Labor Costs Crew Costs Depreciation Interest Informal costs Source: HDM-VOC Model computation and other unit financial costs It should be noticed that depreciation costs depend mainly from the costs of a new vehicle and the service life of the vehicle. It could be considered as a fix cost to be paid every year. Page 16

18 However in HDM-VOC model, it is considered that the condition of use of the vehicle may influence its premature wear. Depreciation costs therefore also vary according to the type and condition of the road on which it is used. Informal costs often occur in the region as observed by the "Observatoire des pratiques anormales (OPA) sur les axes routiers inter-états" during the period from May 27 th 2007 to October 26 th As an average, a truck is asked the equivalent of 2.75 dollar of informal costs for 100 km covered which is however far less than in neighbouring countries Variable financial costs In order to evaluate financial costs, various taxes have to be applied to the operating costs computed with HDM-VOC. Interest Rate is set to 15% as recommended in the frame of the evaluation with HDM4. Value Added Tax (VAT) is set to 12.5% and National Health Insurance Levy is set to 2.5% according to governmental sources ( These two rates are used to adjust economic costs supported by truck companies, mainly lubricants, tires and maintenance parts. Fuel financial costs is based on the value observed at the petroleum station early 2010, namely 0.84 $ / Litre. Financial costs in dollar per vehicle-kilometre for a flat paved road in fair condition are illustrated in the following table. Table 10 Variable financial costs for a flat paved road in fair condition ($/veh.-km) Light Medium Heavy Articulated Fuel Financial cost (with taxes) Lubricants Financial Costs Tire Financial Costs Maintenance Parts Financial Costs Fixed costs Source: HDM-VOC Model computation and other unit financial costs As mentioned earlier, vehicle cost through depreciation of the vehicle is already included in the VOC calculation Insurance Insurance of the vehicle is estimated to 3% per year of the replacement value of the vehicle. To take into account the evolution of the vehicle value during its life, the half of the new vehicle cost is taken as a base of calculation. For a light truck, based on a 20,405$ new Page 17

19 vehicle cost, the insurance will be 307 $ each year. For a heavy truck, based on a 77,465 $ new vehicle cost, the insurance will be 1,162 $ each year. Even if insurance is not subscribed by the truck company, the risk should be integrated into costs endured by the company. If a company would not pay at all or regularly an insurance premium, any damage would have anyway to be financed directly by it. Cargo is also at risk. Insurance of cargo of about 2.5% of the freight value is usually observed in developed countries. However, we will consider that cost does not include cargo insurance, since, as often in developing countries, the freight is supported by the client Taxes on vehicles Tax on vehicles is still very low in Ghana, even if it increased recently. Since February 8, 2010, the amount to be paid by heavy vehicles fixed by the Driver and Vehicle Licensing Authority (DVLA) is equivalent to 20 $ per years. See all details on other duties in the annex Overhead costs Overhead costs consist in the ongoing administrative expenses of a business which cannot be attributed to the specific transport business activity, but are still necessary for the transport business to function. Overhead costs mainly include the following costs: administrative staff salaries and social subscription tax on profit office rent and related insurance utility charges Overhead costs may vary deeply from one company to another it can reach up to the half of costs and a quarter of turnover depending of the scope taken into account. To compute how overheads costs incurred to the main activity of the transport companies, they are divided by the number of vehicle of the fleet. Based on several interviews, as the number of vehicles per company is low overhead costs was estimated for one average truck company to 6000 $ per year per vehicle. This figure of course may greatly vary from one company to another depending of the type of management and of the number of vehicles in the fleet. In the following figure is tested the sensitivity of sale price to the variation of the value of overhead costs. Page 18

20 Sale price per km (Partial Load) ($/km) ,000 4,000 6,000 8,000 10,000 12,000 Overhead costs and taxes (Lumpsum) ($/veh/year) Figure 3 Sale price per km in relation with overhead costs and taxes values We observe that all other things being equal, sale price per kilometre double when overhead costs are multiplied by ten Profit margin Profit margin of truck companies has been estimated to 80% in West Africa (see World Bank - Transport Prices and Costs in Africa, 2008). Profit margin could have been computed as a dependant variable resulting from the difference between total costs and the price market. But, we have chosen in this model a carriers viewpoint. This allows the carrier to calculate prices of services rendered by entering in the model the costs (fixed and variable are known), and the expected profit margin. 5. Operational characteristics Beyond this breakdown of costs, the cost of a truck is heavily dependent primarily on the rate of empty mileage performed and the load rate inside the truck. Relevant characteristics are grouped in the cost computation model under the denomination "Vehicle Characteristics" and "Vehicle Utilization and Loading". Two main factors were considered to compute total transportation costs: Empty mileage and dispatching costs Load rate of the trucks 5.1 Empty mileage and dispatching Costs In order to compute the real costs supported by the transport firms, dispatching costs have to be considered. Dispatching costs occurs when a truck has to run empty in order to reach the place where the freight will be loaded. This situation often happens when a truck seeks return cargo. As Page 19

21 described in the following figure, a truck carried freight from a place A to B. In order not to return empty, the truck will reach a place C to.load commodities which will be carried back to the place A. The vehicle operating costs spent during the empty run have to be reintegrated in the global costs. First trip loaded mileage (B) Unloading place Empty mileage entailing dispatching costs (A) First loading place Return trip Loaded mileage (C) Second loading place Figure 4 - Dispatching Costs Generation Process In principle, in order for the carrier to remain competitive, dispatching costs should be shared out between all clients. Therefore these costs have to be computed and reintegrated into the prices through variable costs. Dispatching costs are computed in dollar/vehicle-kilometre as follow: 1 (1 EM ) DC = TVC * 1, where: DC: dispatching costs TVC: Total Variable Costs per km EM: percentage of Empty Mileage during the year Proportion of loaded mileage is estimated to 75% in this region of the world according to observations (see World Bank - Transport Prices and Costs in Africa, 2008). Loaded mileage is computed as the ratio of the number of kilometres with payload over the total number of Page 20

22 kilometres of a truck. The proportion of empty mileage in regards to the total mileage is therefore estimated to 25%. The objective for carriers is of course to reduce as much as possible these costs. The following sensitivity analysis shows the impact in the variation of empty mileage to the sale price per ton. Sale price per km (Partial Load) ($/km) % 10% 20% 30% 40% 50% 60% 70% 80% Percentage empty mileage (% of km) Figure 5 Variation of sale price per km in relation with the percentage of empty mileage 5.2 Load rate The performance of a truck in terms of load rate is a determinant of carrier profitability, as revenues (and profits) are generally correlated to the load rate of the vehicles. If the truck is not full loaded and if there is no possibility to complement the loading, costs incurred to the trucker will be nearly the same as for a full truck. However the carrier cannot bill the freight forwarder the entire costs incurred. There should be however an incentive in the tariff structure to favor bigger loads. To take into account loading rate of vehicle in tariffs, it is proposed to used the "Preparating and Dating Indicator" (PADI) developed by Dupont de Nemours in the United States of America. This tariff system prompts freight forwarder to better load trucks by proposing them a better sale price when the truck is better loaded. The calculation of the tariff is rather simple: Page 21

23 SP = FTL_SP * PADI, where SP: final Sale Price FTL_SP: Full Load Sale Price, price that would be paid is the truck was full. with PADI rate in percentage computed as follow: PADI = TLR, where: TLR: Load Rate in percentage of the shipment weight or volume Evolution of the PADI rate according to the load rate is illustrated in Figure 6. For example, if the truck is loaded at 20%, the freight forwarder will pay 45% of a full load rate truck. If the truck is loaded at price 80%, the freight forwarder will pay 89% of a full load rate truck. Payload per type of vehicle used in the model is listed in Table 4 in the previous chapter. Page 22

24 100.00% 90.00% 80.00% 70.00% Cost Relative to Full Load 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Shipment Weight Or Volume Figure 6 - Du Pont De Nemours Prerating & Dating Indicator (P.A.D.I.) Page 23

25 As for interviews and observation, average load rate have been estimated to 80%. The following sensitivity analysis shows the impact in the variation of load rate of the truck to the sale price per ton-km. Sale price per ton-km (Partial Load) ($/ton-km) % 20% 40% 60% 80% 100% 120% Load rate (ton (%)) Figure 7 Variation of sale price per ton-km in relation with truck load rate We observe that the improvement of load rate contributes to the diminution of sale price per ton kilometre in large proportion when the load rate is initially low and in a lesser progression when the cargo reaches the payload of the truck. On the other hand if a high load rate is beneficial to the carriers, it should not be excessive. In Ghanaian road, one of the risks is overloaded trucks which lead to higher costs for the community: Abnormal wear of the road. Besides the direct cost (repair of the road), we must also take into account a significant indirect costs related to overweight trucks, namely congestion and accidents during the construction and maintenance. A single truck heavily overloaded (ie axle load limit is exceeded by 20%) causes wear equivalent to that of 245,000 cars. In addition to damaging the road surface, overweight trucks also threatens the safety of other road users. Overload significantly increases stopping distances and therefore the risk of accidents and the impact (severity) of these. It even happens that overweight causes a failure of the braking system. Page 24

26 6. Costs and Prices computation 6.1 Input values Many of the basic input data change according to the type of vehicle concerned. There are displayed in the Excel Sheet "Input" where the following headings are distinguished: Financial Parameters Vehicle Characteristics Vehicle Utilization and Loading Economic Unit Costs Vehicle Operating Costs (VOC) Fixed costs Many of the data are outputs of the HDM-VOC model. Some, coming from other sources have been added on this sheet. All basic inputs data are presented in the Annexe 2. Relevant data are then linked to the "CostPrice" Excel sheet. Basic data are displayed in the column "Value per Vehicle" The other columns are automatically updated to implement "Sensitivity Analysis". The elements used in the model are presented in the following table. Values which are presented may change according to hypothesis and observation of the users. Table 11 Type of Inputs taken into account for the Cost and Price evaluation Inputs Unit Value per Vehicle Operation characteristics Loaded mileage km/year 22, Percentage empty mileage % of km 25% Total working day per year day/year 214 Payload ton 3.00 Load rate ton (%) 80% Mileage per order (excl. empty mileage) km/order 500 Variable costs Fuel financial costs $/veh-km 0.13 Lubricants financial costs $/veh-km 0.00 Tire financial costs $/veh-km 0.01 Maintenance parts financial costs $/veh-km 0.06 Maintenance labor costs $/veh-km 0.02 Crew costs $/veh-km 0.01 Depreciation $/veh-km 0.07 Interest $/veh-km 0.01 Informal costs (bribes) $/veh-km 0.04 Page 25

27 6.2 Results Inputs Unit Value per Vehicle Fixed costs Taxes on vehicles $/veh/year Insurance of the vehicle $/veh/year Overhead costs and taxes (Lumpsum) $/veh/year 6, Profit Profit Margin % of $ 80% Cost and price computation is implemented in the second part of the "CostPrice" Excel sheets. Results can also be called dependant variable as their value depend from the basic inputs described above. Values displayed in the following table are also indicative as they may change according to basic inputs data chosen. Values are computed per vehicle-kilometres when values concern variable costs and per day for fixed costs. Table 12 - Cost and price computation RESULTS Unit Value per vehicle Empty mileage km/year 5,625 Total mileage km/year 30,000 Total variable costs $/veh/year 10, Total fixed cost $/veh/year 6, Total costs $/veh/year 16, Indicators Total variable costs per km $/veh-km 0.35 Dispatching costs $/veh-km 0.12 Total Variable costs per km sold $/veh-km 0.47 Fixed costs per loaded mileage $/veh-km 0.28 Total costs per loaded mileage $/veh-km 0.75 Fixed costs per day $/veh/day Total costs per day $/veh/day Transport costs Billable weight ton 2.40 Fixed costs per order $/order Variable costs per order $/order Total costs per order $/order Transport price according to PADI Sale price (Full Load) $/order Sale price per ton (Full Load) $/ton Sale price per km (Full Load) $/km 1.34 Sale price per ton-km (Full Load) $/ton-km 0.56 Cost relative to Full Load ton (%) 89% Sale price (Partial Load) $/order Sale price per ton (Partial Load) $/ton Sale price per km (Partial Load) $/km 1.20 Sale price per ton-km (Partial Load) $/ton-km 0.50 Page 26

28 Price is computed by adding fixed costs per order to variable costs per order. Variable cost is computed multiplying "Total Variable costs per km sold" by the mileages required to implement the order. Fixed cost is computed taken into account the ratio between the mileages required to implement the present order and the total mileage implemented by the truck by year. Final price is then computed using the PADI formula. 6.3 Sensitivity analysis The Excel sheet named "Analysis" permits to implement sensitivity analysis dynamically. This tool allows testing what are the main factors which influence costs and prices? The following figure illustrated how the analysis works: Road characteristics and truck type has to be chosen. The independent variable taken from a list has to be selected it will be the value put in x- axis on the graph. The independent variable is chosen among the basic input data. This may be for example, the percentage of empty mileage, the load rate, the fuel financial costs Range value for the independent variable has to entered (from to ) The dependant variable has to be selected also from a list. This variable will constitute y- axis of the graph. As a result, it is possible to test different factors and see what are their impact on the transport costs and prices. Some of the figure which illustrated the present report has been made using this tool. Sensitivity analysis permits to observe clearly that some factors such as: condition of the road (IRI) ; diminution of empty backhaul ; improvement of vehicle loading ; have a great influence in the setting up of transport costs and prices and may permit the improvement of revenue for transport carriers. Page 27

29 Figure 8 Cost Sensitivity Analysis Page 28

30 Annexe 1 : Driver and Vehicle Licensing Authority (DVLA) Rates/Fees and Charges A. Licensing Duties Accident Report Fee 1.00 Amendment Of Register 3.00 Application to Emboss Blank No Plate 1.00 Application to Manufacture Blank No Plate 1.00 Certficate to Manufacture Blank No Plate Certificate to Emboss Blank No Plate Change Of Ownership, Motorcycles, Scooters 2.00 Change Of Ownership, Vehicle 5.00 Change Of Use Conversion to Right Hand Drive Driver License Application Form F 0.20 Driver License Change of Class Form X 0.20 Driving Test Fee 2.00 Eye Test Application Form F Highway Code Booklet 1.00 International Driver Permit Application Form 3A 0.20 International Driving Permit International Driving Permit Test Fee 5.00 International Transit Application Form International Transit Fees Articulated s International Transit Fees Cars/Pick-Ups International Transit Fees Heavy Buses/s (Under 3 Axles) International Transit Fees Light Buses/s (Up to 33 Seater) International Vehicle Certificate 5.00 Learner Drivers Licence 1.00 Page 29

31 Particulars of Vehicles Extract 1.00 Particulars of Vehicles - Photocopy of File Entries 5.00 Physical Conversion Renewal of Learner Drivers License Fee For 3 Months 1.00 Renewal of New Drivers Licence (2yrs) 4.00 Upgrading of Driver's Licence 6.00 Trade Plate Licence Fee Trade Plate Licence Form D Trade Plate Log Book - Form E 1.50 Vehicle Registration Form A 0.20 Vehicle Registration Form C 0.20 Vehicle Road Worthiness Certificate (VRC) 0.50 B. New license fee Conversion of Foreign Drivers License (Provisional Driving Licence)-GOG 6.00 Drivers Licence Bklet (CoverNote-Provisional Driving Licence)-GOG 6.00 Drivers Licence Booklet (Cover Note-Provisional Driving Licence)- GOG 6.00 C. Road Worthiness / Road User Fee Agricultural Equipment (Mechanically Propelled) 3.00 Articulated s 24 Tons But Less than 32 tons Articulated s Up To 32 Tons And Above Commercial Buses And Coaches 3.50 Commercial Motor Vehicle Above 2000cc 3.00 Commercial Motor Vehicle Up To 2000cc 2.00 Fee For Replacement Of Certificate Or Sticker 0.80 Motor Cycle 0.80 Private Buses And Coaches 4.00 Private Motor Vehicle Up To 2000cc 2.00 Page 30

32 Private, Motor Vehicle Above 2000cc 3.00 Rigid Cargo s Above 16 tons & Up To 22 Tons 3.50 Rigid Cargo s Above 22 tons 4.80 Rigid Cargo s Above 24 tons 6.00 Rigid Cargo s Up To 16 Tons 3.00 Vehicle Layoff Form A Vehicle Layoff Form A4 - (VRC) 0.50 Vehicle Road Worthiness Certificate (VRC) Penalty 4.00 D. Vehicle Registration Agricultural Equipment (Mechanically Propelled) Articulated Equipment (Mechanically Propelled) Articulated s Tons Articulated s Above 32 Tons Articulated s Up To 24 Tons Articulated-Tipper s Buses And Coaches Combine Harvesters Construction Equipment Delinquency Fee (Re-registration) Mining Equipment (Mechanically Propelled) Motor Cycles 5.00 Motor Vehicles Above 2000cc Motor Vehicles Up To 2000cc Particular Identification Mark Rigid Cargo s Above 22 Tons Rigid Cargo s From Tons Rigid Cargo s Up To 16 Tons Special Number Page 31

33 Annexe 2 : Basic Input Data of the Road cost and price analysis model Page 32

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