below can truck rates can be con- 

 tinued if costs were minimized by a 

 reduced number of calls at individual 

 farms and by improved types of tank 

 trucks with higher pay loads, and if 

 monopolistic action by truckers is not 

 practiced. To eliminate reductions in 

 transportation rates would be to elim- 

 inate one of the incentives for pro- 

 ducers to invest in a farm bulk milk 

 tank. 



Because tank trucks had only re- 

 cently been introduced into the New 

 England farm assembly of milk, the 

 problem of breakdowns and replace- 

 ments had not yet generally been 

 faced when this study was made. The 

 provision of substitute trucks in case 

 of breakdown will be an additional 

 cost. The price of replacements by 

 new types and models will eventually 

 influence the rate structure. 



4. Ways to Reduce 

 Assembly Costs 



To reduce assembly costs per cwt. 

 necessitates the greatest possible use 

 of capacity with as low a mileage as 

 possible to be travelled. One such 

 way is by every-other-day pick-up. 



(a) E very-other-pay Pickup 



The can truck calls at the farm 

 each day to pick up milk. The cost 

 of this service is paid by the pro- 

 ducer at an agreed rate per cwt. of 

 milk. Milk in cans immersed in a 

 water cooler will not maintain its 

 quality for any great length of time 

 and most sanitation laws require that 

 it be delivered and processed every 

 day. When milk is stored in a bulk 

 tank, however, the prompt reduction 

 of the temperature enables the milk 

 to be kept safely for several days. 

 Therefore, it is not necessary for the 

 dealer to pick up the milk every day. 

 The length of time the milk can be 

 kept in the farm tank depends on the 

 size of the tank and the milk pro- 

 duction of the farmer as well as the 



health regulations in the particular 

 State. 



For the tank trucker, there are 

 some tasks performed on each trip to 

 a given farm which take the same 

 amount of time regardless of the 

 volume of milk he picks up at that 

 farm. Driving from the highway to 

 the milk room and back; agitating 

 the milk in the farm tank before tak- 

 ing a sample for butterfat testing at 

 the plant; taking the sample; connect- 

 ing the tank-truck hose to the farm 

 tank and later disconnecting it; 

 flushing out the emptied farm tank 

 with water — these are sources of 

 overhead costs in terms of the truck- 

 er's own time and in terms of an ex- 

 pensive vehicle which sits idle for that 

 period of time. These tasks are per- 

 formed twice as frequently under 

 every-day pick-up as they are with 

 pick-up every-other-day. The re- 

 duction in calls to each farm by a 

 trucker reduces the trucker's total 

 transportation cost per cwt. of milk, 

 below what it would be in tank 

 trucking on a daily pick-up basis. 

 Any savings in costs brought about 

 by every-other-day or 3-times-per- 

 week pick-up can be passed on to the 

 producer in the form of a reduced 

 rate. This reduction in rates is at 

 least partly contingent upon the 

 trucker's increasing the total num- 

 ber of producers he calls on in order 

 fully to utilize the tank truck. For 

 a tank-trucker to use daily pick-up, 

 as sometimes happens, is to miss an 

 opportunity for a cost advantage in- 

 herent in bulk assembly. 



It is likely that, with every-other- 

 day pick-up, a greater number of pro- 

 ducers can be served by one truck. 

 This would spread the fixed costs of 

 the truck. 



(b) Reduced Mileage for Same 

 Amount of Milk 



The cost per cwt. of milk hauled 

 can be reduced if the distance which 

 the milk is hauled can be reduced. 



37 



