MGT Only: 1st edition Commercial Efficiency Ratio

[TheDark]

One of the articles at Freelance Traveller that I greatly appreciate is Ken Pick's Commercial Efficiency Analysis of Selected Starfreighters, which does exactly what it says in the title. It looks at how much a ship can earn relative to its cost to determine which ships are viable in normal trade.

However, there are some shortcomings when applying the system, both in general and specific to differences in the Mongoose edition:
1. The system assumes a flat rate of 1000 Cr per dTon per Jump number. Mongoose's 1000 Cr per dTon for J1 and 200 Cr per dTon for each additional J number will alter this.
2. The system assumes that flat rate for all rate-earning space (Cargo, Low Berths, and Staterooms not occupied by Crew). Passenger rates for the Staterooms are much higher than that in most cases.

I've put together the attached spreadsheet to calculate CERs for MgT1e vessels based on the tables on pages 160 and 161 of the core rulebook. The two assumptions are that all cargo space is used for Freight and all passenger space is filled. The cells highlighted yellow are what should be filled out by the user; a Type A Free Trader's information is in the sheet as an example, assuming 8 Staterooms used for Crew. The next two cells (B7 and B8) give the average number of Credits earned by a single run, with B7 assuming all Staterooms are filled on Medium Passage and B8 assuming High Passage. B10 and B11 give the CER for Medium and High passage respectively. For anyone who wants to see the intermediate steps and lookup tables, they're in white text in cells F2:G6 and J1:N7 (there's nothing to hide in there, it's just hidden to look prettier).

I would expect Ken's analysis to hold true here - a CER of less than 3 needs a subsidy to survive, CERs of 3 to 5 need speculative trade, and CERs above 5 can survive just on Freight (and Passenger) runs if they can run full on both.

 

[Spinward Flow]

Interesting system for cross-comparisons. I stumbled across it this past year and then forgot about it, so thanks for bringing it back to everyone's attention.

Doing a bit of napkin math using my own (CT) designs that I've posted in The Fleet forum, I wound up with this matrix when running on internal only cargo:

Ships	Gross Tonnage	Net Tonnage	Purchase Price (in volume)	CER
2J 2G TL=11 Rift X-Courier	194	85	74.1984	2.29
2J 5G TL=11 Spinward X-Courier	194	45	121.5184	0.37
3J 2G TL=13 Rift Courier	198	65	89.0704	2.18
2J 6G TL=13 Spinward Flex Courier	194	45	109.8752	0.40

This kind of result broadly matches my own expectations that the 5G and 6G versions are "wildly dependent" upon speculative cargo profits when operating under bank loan financing just to break even ... but which are also perfectly capable of turning profits when operating under subsidies (as demonstrated in the Race To Profitability under subsidy by the Spinward Flex Courier on the D'Ganzio to Ficant to D'Ganzio run against a "stock" unarmed Type A2 Far Trader). To facilitate the cross-comparison, here is how the (CT) Type A2 Far Trader used in the Race to Profitability would compute under the terms of this analysis:

Ship	Gross Tonnage	Net Tonnage	Purchase Price (in volume)	CER
J2 1G TL=9 (LBB S7) Type A2 Far Trader	200	91	59.56	3.05

Given this kind of cursory/first order simplistic analysis, one would think that a J2 1G Far Trader ought to be "wildly more profitable" to own and operate than a J2 6G Spinward Flex Courier (subsidy yes or no) ... and yet the results of that specific Race To Profitability involving 19 jumps and a 32-33 week round trip found that the two starships were relatively evenly matched (except against pirate attacks) in terms of profit potential when operating on internal cargo only rules while under subsidy for the duration of the race.

My point being that this analysis method is VERY simplistic and may not manage to capture everything of importance when it comes to decisions on how (and with what) to expand interstellar merchant line operations. It is, however, a useful tool for judging whether a starship class is "viable" under bank financing (not all are) ... but a "paid off" or subsidized mode of operations is a VERY different matter.

---

Just for giggles, I figured I would take the above 4 starship designs of mine and recalculate them with external cargo loading, just to see what would happen. This is the results I got:

Ships	Gross Tonnage	Net Tonnage	Purchase Price (in volume)	CER
2J 2G TL=11 Rift X-Courier	194+97 external	85+97 (J1)	74.1984	2.45
2J 5G TL=11 Spinward X-Courier	194+97 external	45+97 (J1)	121.5184	1.16
3J 2G TL=13 Rift Courier	198+66 external	65+66 (J2)	89.0704	2.94
3J 2G TL=13 Rift Courier	198+198 external	65+198 (J1)	89.0704	2.95
2J 6G TL=13 Spinward Flex Courier	194+97 external	45+97 (J1)	109.8752	1.29

I find this to be a very interesting result, all things considered. For one thing, it provides a usable "quick and dirty" bottom line analysis of what you can (probably) expect in the way of returns on investment in the event that absolutely NOTHING goes wrong (ever) ... such as a pirate attack or other form of hazard/mishap that could create setbacks to profits. It also shows the "flex" benefits of external cargo towing capacity when your ship has "more drive power than you might need" at all times.

However, as I've already demonstrated in the Race to Profitability ... "discounting" the opportunity costs of a pirate attack (which had an aggregated chance of 87% of at least 1 pirate attack along that specific route!) is an excellent way to overestimate your own profit potential as a "merchant prince" owner/captain that can have potentially ruinous consequences for your business model.

---

So, overall ... a useful analysis tool, however it is somewhat necessarily "limited" by the ... coarseness ... of the information being loaded into it for computational purposes. Definitely a "quick and dirty" way to cross-compare starship types and classes while skipping over a mountain of details that can make "all the difference" when making choices for new (or used) acquisitions. Good for a quick first look to get a sense of what you're dealing with, but any REAL decision making ought to involve a more thorough analysis of alternatives than this method either can or is meant to provide.

Which is just another way of saying ... don't skimp on doing your own research before deciding what to buy.
Caveat emptor ... and all that.

 

[TheDark]

Working on this also made me realize J1 ships should focus on low passage and cargo space for volume efficiency reasons.

Low passage is worth Cr.2000 per dTon (2 half-ton passages at 1000 each). Cargo space for freight is worth Cr.1000 per ton. High Passage is worth a varying amount, but with a Steward-1 works out to Cr.1000 per ton (6000 per 4-ton stateroom, plus 1 ton for luggage, plus 1 ton for 1/4 share of steward's room). Since the steward also has to be paid, it ultimately has a little less value than freight. Middle Passage is Cr.750 per ton minus steward's share (0.4 tons assuming Steward-1) and pay.

Low berths are also more economical - the 4 dTons of stateroom to support 1 passenger at Cr.500,000 of investment can support 8 low berths at only Cr.400,000. Obviously the passenger availability tables should be consulted for appropriate volumes of low berths, but staterooms should be the last investment on a J1 ship, after installing as many low berths and cargo space as the ship could reasonably fill on its planned route.

 

[Spinward Flow]

Working on this also made me realize J1 ships should focus on low passage and cargo space for volume efficiency reasons.

The same thinking led me directly to the x-mail delivery option since that service is worth Cr 5000 per ton (up to 5 tons). So x-mail definitely "pulls more revenue" for the tonnage than any other option (besides successful speculation cargo). Best of all, a Mail Vault costs MCr 0 to install since it is basically "cargo space that can't be used for cargo" since it is space devoted to hauling x-mail around. The only downside to x-mail is that you're limited to only 5 tons of it.

Low passage is worth Cr.2000 per dTon (2 half-ton passages at 1000 each).

More like Cr 1800 per ton after including life support expenses.
You will also be required to have a medic onboard (low passengers are still passengers...) meaning a stateroom for the medic (1 per 120 passengers is required) as well as life support (Cr 2000 per 2 weeks) and crew salary for the medic (skill-1 is only Cr 1000 per 2 weeks, but skill-2 is Cr 1100 per 2 weeks and gives a +1 DM to low passenger survival checks). If you also have middle/high passenger capacity, the medic role isn't an extra crew role dedicated exclusively to the low passengers.

Point being that you need a minimum of 4 low passengers (Cr 3600 revenue) to defray the life support costs (Cr 400 for the low berths, Cr 2000 for the medic's stateroom per 2 weeks) and the medic's crew salary (Cr 1000+ per 2 weeks). With skill-2 you'll only have a net profit of ...
3600-400-2000-1100 = 100
... Cr 100 with only 4 low passengers, however every low passenger added from 5-120 is an extra Cr 1800 per 2 low passengers/1 ton of displacement after paying for life support costs. That's a yield of Cr 16.67 per ton out of 6 tons, however the economies of scale increase rapidly with additional low passengers beyond merely having 4.

High Passage is worth a varying amount, but with a Steward-1 works out to Cr.1000 per ton (6000 per 4-ton stateroom, plus 1 ton for luggage, plus 1 ton for 1/4 share of steward's room). Since the steward also has to be paid, it ultimately has a little less value than freight.

I disagree with this formulation.
High passengers receive a single stateroom (4 tons, MCr 0.5) and require the services of 1 steward per 8 high passengers (round fractions up) and 1 medic per 120 passengers (as outlined above). High passengers are given a 1 ton luggage allowance, but I've always viewed that as being something that occupies stateroom space, rather than cargo hold allowance.

So the optimal configuration for high passengers is in multiples of 8 due to steward support requirements. This means that 9 staterooms are required to have 8 high passengers plus 1 steward. That is 36 tons of displacement, has a life support cost of Cr 18,000 (if all staterooms are occupied) and an associated crew salary of Cr 1500 per 2 weeks for skill-1 (Cr 1650 for skill-2) while generating Cr 80,000 in revenue. Adding 1 medic to that mix increases the number of staterooms needed to 10, bringing life support cost to Cr 20,000 and crew salaries to Cr 2500 per 2 weeks for skill-1.

Thus for a "mere" 8 high passengers, net profit from 8 high passengers supported by 1 steward and 1 medic of skill-1 each is Cr 57,500 which amounts to Cr 1437.5 per ton out of 40 tons dedicated to high passenger services.
If downgraded to 8 middle passengers, while still having 1 steward and 1 medic of skill-1 each on payroll, the net profit is Cr 41,500 which amounts to Cr 1037.5 per ton out of 40 tons ... so still ahead of cargo pricing, but not by much. If you drop the steward entirely (so 8 middle passengers plus 1 medic) you have a net profit of Cr 45,000 which amounts to Cr 1250 per ton out of 36 tons.

By way of comparison, the same 40 tons dedicated to low passengers (72 low berths, 1 stateroom for a medic with skill-2) generates Cr 72,000 revenue fully loaded (equivalent to 4 high+4 middle passengers) while costing Cr 7200 for low berth life support and Cr 2000 for stateroom life support plus Cr 1100 for medic with skill-2 per 2 weeks. So the net profit is Cr 61,700 which amounts to Cr 1542.5 per ton out of 40 tons (so Cr 105 per ton ahead of exclusively high passengers per ton). In fact, you need a minimum of 18 low passengers generating a net profit of Cr 13,100 supported by a medic with skill-2 (for +1 DM on resuscitation rolls) in order to realize a yield of Cr 1007.69 per ton out of 13 tons in order to surpass cargo shipping rates.

The above profit margins can "get better" with economies of scale (more passengers per medic, up to 120 passengers per medic) but they aren't going to exceed Cr 2000 per ton even under optimal conditions (if pricing is parsec agnostic, rather than multiplied by parsecs traveled).

Working on this also made me realize J1 ships should focus on low passage and cargo space for volume efficiency reasons.

On this point I can definitely agree with you ... however there are some caveats to even this simplistic interpretation.

My personal priority preferences for "revenue tonnage" onboard a ship would be like so:

1. X-mail (Cr 5000 per ton, limit 5 tons)
2. Cargo (Cr 1000 per ton)
3. Low Passengers (Cr 1000+ per ton @ 18+ low passengers, more is better for economies of scale)
4. High Passengers (Cr 1437.5 per ton @ 8 high passengers)
5. Middle Passengers (Cr 1250 per ton @ 8 middle passengers with no steward)

The reason why I place "raw" cargo above passenger services is because cargo space can be used for speculative cargo, wherein it is possible to achieve wildly high profit margins per ton, potentially well in excess of Cr 2000 per ton. Also, by eliminating passenger services entirely you remove the life support and crew salary expenses associated with passenger services (along with the hijacking risks, but also losing potential patron contacts).

This is part of the reason why I figure that "passenger conversion" of cargo holds to passenger services as an aftermarket modification (or the installation of prefab modules into the cargo bay) is a superior option when it comes to the design of starships in the naval architecture firm office. By preserving the "option" for passenger services, without "mandating" passenger services as an integral part of a starship's design (that can't be easily modified later) you essentially get the best of both worlds while preserving the capability for passenger services if a merchant line is inclined to pursue such services.

 

[whartung]

crew salary for the medic (skill-1 is only Cr 1000 per 2 weeks, but skill-2 is Cr 1100 per 2 weeks and gives a +1 DM to low passenger survival checks).

Yea, but they pay in advance and 200Cr is 200Cr, so, you know, there's that.

 

[daryen]

High passengers are given a 1 ton luggage allowance, but I've always viewed that as being something that occupies stateroom space, rather than cargo hold allowance.

I want to challenge this. The 1 dton luggage allowance for high passengers has to come from the cargo hold. Or at least not from the stateroom.

A high passenger is already entitled to the whole four dton stateroom. If the luggage allowance was from that, it would not need to be noted; it would just be part of the crap they can store in the stateroom. But since it is noted, that means (or at the least very heavily implies) that the one dton luggage allowance is in addition to the stateroom, not part of the stateroom. So, yes, each high passenger eats into the cargo capacity of the ship transporting them.

 

[Spinward Flow]

Thus for a "mere" 8 high passengers, net profit from 8 high passengers supported by 1 steward and 1 medic of skill-1 each is Cr 57,500 which amounts to Cr 1437.5 per ton out of 40 tons dedicated to high passenger services.

If you bump the tonnage up from 10 staterooms (8 high passengers, 2 crew) to being 10 staterooms plus 8 tons of cargo hold space ... you wind up with Cr 57,500 of profit which amounts to Cr 1197.92 per ton out of 48 tons.

At that point, the revenue advantage against middle passengers begins to vanish such that it becomes questionable as to why you would want to engage in high passenger service at all.

 

[Grav_Moped]

If you bump the tonnage up from 10 staterooms (8 high passengers, 2 crew) to being 10 staterooms plus 8 tons of cargo hold space ... you wind up with Cr 57,500 of profit which amounts to Cr 1197.92 per ton out of 48 tons.

At that point, the revenue advantage against middle passengers begins to vanish such that it becomes questionable as to why you would want to engage in high passenger service at all.

I think the 1Td luggage allotment for high passengers was intended for use by player characters as passengers, rather than as an additional requirement against player characters as starship operators. That is, it's the answer to players asking, "how extra luggage can I carry as a high passenger instead of as a mid passenger?" rather than a description of what starship operators have to set aside for their high passengers.

 

[Fovean]

MgT 1e Core Rules, pg 160:

High Stateroom, one displacement ton of cargo space, steward
Middle Stateroom, 100 kg of cargo, steward
Low Low Berth, 10 kg baggage allowance

Hard to argue the High pax “luggage allowance” doesn’t end up in the cargo hold…

 

[Spinward Flow]

In CT, no steward is required for middle passengers.

 

[willtron3030]

I have to keep reminding myself that freight hauling costs and passenger fees are all fixed by Imperial fiat.

 

[Condottiere]

And probably subsidized, if actual cost exceeds the ticket price.

 

[Spinward Flow]

The most relevant takeaway that I get from this analysis is that you really want to have your starship costs (life support, crew salaries, berthing fees, etc.) per jump below Cr 1000 per revenue ton. For simplicity of modeling, count 5 tons of mail vault for x-mail as if it were 25 tons of cargo space (that is always filled).

If you can manage that, you'll be profitable with a full shipping manifest.
Needless to say, bank loan financing (I still call it usury) makes that kind of performance extremely difficult to achieve. Still, kind of hard to believe that a 2.213% interest rate over 40 years (so 1.02213⁴⁰) equals 2.4x the 100% purchase price when fully paid.

 

[willtron3030]

And probably subsidized, if actual cost exceeds the ticket price.

So, how would an independent ship owner get their mitts on some of those sweet, sweet subsidies?

 

[Fovean]

So, how would an independent ship owner get their mitts on some of those sweet, sweet subsidies?

Noble or Naval contacts or prior history? Perhaps a TAS membership could lead to an opportunity? Or maybe prior service with a large merchant line and a contact or ally there?

 

[Spinward Flow]

So, how would an independent ship owner get their mitts on some of those sweet, sweet subsidies?

Short answer ... that's where the campaign begins.

Slightly longer answer ... in a subsidy situation, the commercial enterprise applying for the subsidy needs to be able to make the down payment on the vessel to be subsidized. So in practice, you need to put up your own money to get started on a subsidy ... or if you can't do that simply offer to take over an already existing subsidy (freeing up the other entity to pursue other prospects/obligations).

As demonstrated in my own Race to Profitability test case, it is perfectly possible to amass enough wealth after a ~10 years of operations along a suitable subsidized route via speculative cargo to want to get "bought out" from a subsidy by another party so as to purchase your own starship (with cash, payoff in full on delivery) so as to escape the 50% subsidy rake on gross receipts as well as the costs of bank financing/interest payments. With a fully paid off starship, you can start raking in some SERIOUS cash flow to make up for the purchase price of the ship itself.

If you already have a starship (and it's not 40 years old already), you would be wanting to talk to planetary government agencies to inquire about subsidy options. You are much more likely to receive a subsidy contract from worlds that have higher populations (so skew towards Industrial) types which have larger budgets to "waste" on subsidies of interstellar trade. Oh and you'll also need a business plan to make your case. After that, it's shuffling paperwork and getting approvals ... so ... again, that's where a campaign can begin.

 

[Condottiere]

This is where player character contributions comes in.

Campaign contributions.

 

[TheDark]

I disagree with this formulation.
High passengers receive a single stateroom (4 tons, MCr 0.5) and require the services of 1 steward per 8 high passengers (round fractions up) and 1 medic per 120 passengers (as outlined above). High passengers are given a 1 ton luggage allowance, but I've always viewed that as being something that occupies stateroom space, rather than cargo hold allowance.

So the optimal configuration for high passengers is in multiples of 8 due to steward support requirements. This means that 9 staterooms are required to have 8 high passengers plus 1 steward. That is 36 tons of displacement, has a life support cost of Cr 18,000 (if all staterooms are occupied) and an associated crew salary of Cr 1500 per 2 weeks for skill-1 (Cr 1650 for skill-2) while generating Cr 80,000 in revenue. Adding 1 medic to that mix increases the number of staterooms needed to 10, bringing life support cost to Cr 20,000 and crew salaries to Cr 2500 per 2 weeks for skill-1.

I think either we are looking at different versions of the core rules or supplements are being added (or I am completely oblivious to large sections of text), because much of this does not seem to match the MgT1e core from 2008. Supporting 8 high passengers requires Steward-3 (cf. pg. 160, Steward Requirements). I also don't see where a medic is required in the core rules; 1 per 120 passengers is the average, but 0 is the minimum and nothing in the Passage section on page 142 or the Passengers section on page 160 says it's required. Somewhat humorously, there's also no increase in pay for having a skill above 1 according to Costs and Maintenance on page 137 of the core rulebook, so the Steward-3 costs the same as a Steward-0 despite being 4 times as capable. For 2 weeks (half a month), a steward would cost Cr 1000 and a medic Cr 2000, for a total of Cr 3000.

 

[Spinward Flow]

I think either we are looking at different versions of the core rules or supplements are being added (or I am completely oblivious to large sections of text), because much of this does not seem to match the MgT1e core from 2008.

I was referencing LBB2.81 the whole time.
That's why the numbers are different (different Traveller versions).