14 N. H. Experiment Station [Bulletin 325 



plication of cost fifruros. Tlicso liave been adapted from the Motor 

 Truck Kcd Book, 198(5. Disrcjiarding the cost of labor to run the tnu-k 

 aiul assuming that all overhead expenses of the tnu-k are ehargeable to 

 milk iuiuling, estimates of the difference in costs between the original 

 collection system and the various stages of reorganization may be ob- 

 tained. Such estimates, as they include no labor costs and impute all 

 lixed costs to milk hauling (while the truck may be used for other pur- 

 poses during that part of the day after milk is delivered) are not to be 

 interpreted in any way as standards — but are of value to indicate the 

 difference between operating costs before and after reorganization. 

 When on top of these savings, it is taken into account that savings in 

 labor costs are made, the magnitude of the total savings is increased still 

 further. 



For a complete picture of milk transportation, it is necessary not only 

 to consider commercial routes, but also to take into account the as- 

 sembly of milk where no definite charge is made, as in self-hauling. Be- 

 cause of the diilfieulty, if not impossibility, of placing precise monetary 

 valuations on sucli liauling, certain arbitrary assumptions have had to 

 be made. Accordingly it has been assumed that "self-haulers" would 

 not have purchased trucks or cars primarily for tlu; purj)ose of hauling 

 milk and that the use of the vehicle for such use is primarily a "by- 

 product" use. Accordingly, no overhead charges are allocated to "self- 

 haulers" and on these routes, only the variable costs for trucks of one- 

 half ton capacity are charged. Such a procedure certainly does not 

 })lace an inflated cost on milk "self-hauled" and should, if anything, 

 underestimate the reduction in costs possible by reorganization. 



In this first stage of reorganization, it should be kept in mind that no 

 substantial change is involved in "self-hauled" milk. Tiu' only modi- 

 fications ai'c that some producers may be expected to haul their milk 

 somewhat farther in order to have it picked up by a commercial route. 

 No change is made for producers delivering direct to dealers' plants. 



J'Lxpressed as a percentage of the original charge levied (including 

 estimate foi- self-haulers) the potential savings through the vai'ious stages 

 of rt'Oi'ganization are shown in Table 111. Savings fi-om putting into 

 operation the first plan of reorganization would vary from 84.7 per cent 

 in Nashua to 5 per cent in Laconia, averaging 11.5 per cent for the area. 

 l)ifT'e)-ing oj)|)oi-tunities for reduction of cost arise dej^ending upon the 

 I'elative importance of self-hauling (which is not alfected in tiie first 

 stage of reorganization), and \ipon the reduction possible in route num- 

 bers an<l distance traveled. In Nashua, these laltei- are of great impor- 

 tance; inimbei- of i-outes could be reduced from l(i to G and distance 

 traveled fi'om 844.2 miles to 18S.}) mih's. Px'cause self-haulers are of 

 small rehUive impoi'lance, the major gains through reorganization aj)pear 

 in Nashua with the first stage to a nnich greater extent than in any of 

 1 he ot her t hfi'e iiiai'kets. 



It cannot be too much cinpliasized that this comjiai-ison of operating 

 costs liefoi'e and after- i-eorganizat ion indicates only the savings jxtssihle 

 thi-ougii increa.sed efficiency of the collection ]iro(-ess and does not in- 



