An Alternate Approach to Carrying Cargo

[Chaos]

Hi,

based on what was said in the thread "Some interesting figures" about the operating costs and break-even points of various starships, I´ve been thinking about what could be done to make starships other than the Free Trader and Far Trader viable as merchant ships.

First off, while speculative trade is certainly an idea, it is too unreliable as a source of income, except in situation where you have two worlds with vastly different price modifiers for some kinds of goods in close proximity to one another (and can reliably acquire these goods) - at least this is true for the T20 trade rules. Also, many goods only have a relatively low price, meaning that even a large percentage difference in buying and selling prices result only in relatively small profits.

It occured to me, then, that maybe transporting other people´s goods can be made more profitable. Currently, there is a flat fee for transportation, regardless of the type of cargo (except for hazardous and security cargoes). However, according to the laws of supply and demand, you are more likely to find someone willing to transport your goods if you are willing to pay a higher price. And if the total value of your goods (and thus the profit your expect to make by getting them to their destination) is higher, you will be willing to pay a higher absolute price to get them there.
So, instead of a flat Cr1,000 fee, you could charge an "X% of listed price" fee for transports - say, 5% for a jump-1, 8% for a jump-2, 11% for a jump-3, or something like that. This would not cut into margins too badly - speculative trade would be viable even if you do not have a starship at your disposal - but at the same time would make transporting higher-value goods a more attractive proposal for free traders.
A side effect of this would be that low-value bulk goods, such as grain, would command a very low transportation fee, and would thus be relegated to being transported by subsidized ships maintained mostly for exactly this kind of transport.

 

[pendragonman]

An interesting idea, especially for those in a trade-heavy game. I like the idea of relegating bulk cargoes to subsidized merchants.

 

[BetterThanLife]

A Far Trader is not viable as a Commercial ship with a mortgage at carriage rates. The Free Trader and the Fat Trader are.

If you are carrying it as volume, why should it matter if you are carrying lead or gold? Why should it even be your business, as long as it isn't anything illegal or dangerous, as to what the actual contents of the crate are? Truckers charge by the mile, regardless of the actual cargo, as long as special measures are not required.

BTW there is a simple solution, which I (and I believe others) have used for years. Charge per parsec instead of a flat per jump. The margin percentage for carriage rates pretty much even out, at least up to Jump-3.

 

[aramis]

Chaos:

Speculation, like insurance, isn't that risky if done by the prepared and done with care. Having a broker 2+ and trader 4+makes Bk2 t&c quite the profit hound, but it's not terribly smooth a flow... Broker 3 & Trader 3 under Bk5/MT/T4 produces an average flow of about KCr2/Td (which is enough for the far trader).

T20 pushes the envelope a little further than CT Bk2.

Like insurance, it's the law of large numbers at work.

Having had players make the payments using all three speculative trade systems, it can be done. It's just not easy.

And ALL the canonical designs make money* on standard rates if there is no monthly payment.
(* more correctly, can make their replacement cost in 40 years.)

 

[BetterThanLife]

Chaos:

Speculation, like insurance, isn't that risky if done by the prepared and done with care. Having a broker 2+ and trader 4+makes Bk2 t&c quite the profit hound, but it's not terribly smooth a flow... Broker 3 & Trader 3 under Bk5/MT/T4 produces an average flow of about KCr2/Td (which is enough for the far trader).

Unlike Insurance Speculation does not rely on the law of large numbers. So Spec trade is risky. Insurance isn't the same thing. After all Probability requires a large sample, (Which is what the law of large numbers is based on.) while speculation is one throw of the dice after another. Sure over the course of 40 years jumping every other week and making that roll every week, it will even out and you will make money. However, the probability of making a bad bet is the same each time you have to make it.

T20 pushes the envelope a little further than CT Bk2.

Having had players make the payments using all three speculative trade systems, it can be done. It's just not easy.

And ALL the canonical designs make money* on standard rates if there is no monthly payment.
(* more correctly, can make their replacement cost in 40 years.)

It can be done, but the question is can it be done every time? Can you make the roll, when you just paid for three months of mortgage and are still a payment behind, because you were off chasing Twilight's Peak, and replacing the Laser turret that just got shot up?

 

[aramis]

They don't go chasing twilight's peak unless they've paid up ahead... because IMTU, the SDG transponders start screaming "I'm stolen" at one month past due. And then the navy starts getting interested. Banks leveraging their risk.

And, BTL, statistically, the law of large numbers applies at anything more than several hundred trials . At least according to my stats classes and their professors. Spec Trade, under Bk2, is a 'mere' 960 trials (1 per 2 weeks) with a number of them being extremely profitable (Up to MCr80/Td). Under Bk7, it's more like 3600 trials (4/week is probably a low figure, given Bk7's numbers of cargos), with profitability up to KCr16. Under T20, we have about 2700 trials, and extreme density.

The question is merely "after the down, is the owner sufficiently capitalized to survive to the first big score?" (Counting a competent broker and trader as part of capitalization, since both could be robots...)

 

[atpollard]

I once had a merchant PC who started a trade company on the side (using book 2 rules). I hired agents on 3 worlds within jump-1 of each other to buy any cargo with a net negative modifier (to purchase price) and ship it to one of the other agents on a world with the highest total positive modifier to the sale price. It made a profit.

As the network of agents slowly expanded to more distant worlds, the 1000 credit per parsec cost (I assumed that shipping the cargo 3 parsecs would require 3 separate jumps) proved to be an affordable price for doing business. I would have gladly filled the hold of a jump 3 ship to transport my cargo 3 parsecs in 1 week for 3000 credits per dTon since I was already paying that much and had to wait 3-6 weeks for a chance to convert my goods back into credits to pay for the next speculative cargo. A jump 3 ship would have at least tripled MY annual profits over a jump-1 transport.

I only mention this story to point out that 1000 credits per parsec is economically beneficial for the company shipping the cargo (as well as the ship transporting it) if it encourages faster shipment of valuable cargoes.

If shipping were a percentage of the value of the goods, I would probably choose to operate a company transport for the high value items instead of paying 50,000 credits per dTon (MCr 1 x 5 percent). The percentage rate would still favor jump-1 ships over high jump ships.

 

[BetterThanLife]

They don't go chasing twilight's peak unless they've paid up ahead... because IMTU, the SDG transponders start screaming "I'm stolen" at one month past due. And then the navy starts getting interested. Banks leveraging their risk

Actually if you read it, they had enough to pay more than three months but had to also replace a turret and other damage to the ship, during the adventure. Now the party is behind and it all comes down to one roll of the dice. (Which may or may not be in a favorable location for the cash currently on hand.) Further it takes more capital than a payment or two to engage in speculation and make payments. (Unless you get really lucky.) Without some extremely good fortune on mustering out, a party is unlikely to have a couple of months mortgage in petty cash to even start the cycle.

And, BTL, statistically, the law of large numbers applies at anything more than several hundred trials . At least according to my stats classes and their professors. Spec Trade, under Bk2, is a 'mere' 960 trials (1 per 2 weeks) with a number of them being extremely profitable (Up to MCr80/Td). Under Bk7, it's more like 3600 trials (4/week is probably a low figure, given Bk7's numbers of cargos), with profitability up to KCr16. Under T20, we have about 2700 trials, and extreme density.

The question is merely "after the down, is the owner sufficiently capitalized to survive to the first big score?" (Counting a competent broker and trader as part of capitalization, since both could be robots...)

Except that the law of large numbers does not apply to individual rolls. Like I pointed out, sure over the course of the mortgage it may average out, but for it to actually apply you would have to be financing more than 1000 ships at the same time. Works for the bank, not for the player with his one lowly ship. Regardless of how many times the dice have been rolled, regardless of how many times the dice are going to be rolled, the law of large numbers does not apply to the next roll.

For example if you are playing Craps (The probability is simpler to calculate but illustrates the point.) the odds of making a pass (rolling 7 or 11) are 8 chances in 36 (6 chances in 36 plus 2 chances in 36). The odds of rolling a 2, 3 or 12 (Crapping out) are 4 in 36 (1 chance in 36 plus 2 chances in 36, plus 1 chance in 36). Over the course of 6 hours across 12 craps tables, there are 3600 rolls, the following numbers will be rolled approximately the following number of times. There will be 600x7, 200x11, 100x2, 200x3 and 100x12, as well of course the other numbers.

Now if the last 5 rolls at your table were a 7, what are the odds that the next roll will be a 7? (If you answer is something other than 1 chance in 6 then the dice are loaded.) (The odds against rolling 6 7's in a row (1 chance in 46656) is a different matter and no longer applies after the dice have already been rolled 5 times.)

 

[aramis]

Given that, under Bk7, it's only about KCr300 to FILL the holds, a party of 6 merchant/navy types is likely to ahve that much and then some. Bk7 is extremely forgiving.

Under T20, due to multiple lots, the odds are good that you can find a low cost (under KCr10 base value) that you can make at least KCr 2 on. But, under T20, you can also up the value per Cargo ton, with security and hazardous cargos.

As to Twilight's peak: I've never run it as a standalone nor as a first adventure; so I have never run it with the starting conditions; further those conditions are not normative in my experiences running traveller over the last 24 years. My players quickly try to find trader skill and broker skill, and will gleefully carry a couple MCr in cash. The only way I get them into those situations is by GM fiat... and that goes over like a lead balloon.

 

[BetterThanLife]

Given that, under Bk7, it's only about KCr300 to FILL the holds, a party of 6 merchant/navy types is likely to ahve that much and then some. Bk7 is extremely forgiving.

Under T20, due to multiple lots, the odds are good that you can find a low cost (under KCr10 base value) that you can make at least KCr 2 on. But, under T20, you can also up the value per Cargo ton, with security and hazardous cargos.

As to Twilight's peak: I've never run it as a standalone nor as a first adventure; so I have never run it with the starting conditions; further those conditions are not normative in my experiences running traveller over the last 24 years. My players quickly try to find trader skill and broker skill, and will gleefully carry a couple MCr in cash. The only way I get them into those situations is by GM fiat... and that goes over like a lead balloon.

You don't have to run it at the start, nor do you have to run it at all. But an adventure that takes the characters away from normal merchant roll playing, and into role playing and costs them both time and money will put them in a world of hurt in a hurry. BTW with a party of 4-6, what does the rest of the party do while the Merchant is making his rolls on the spec table and deciding the next destination based on charts and tables. I am asking because I have never managed to maintain the interest of the non-merchant characters since the Merchant does all the work and everyone else just sits around drinking beer, getting into fights in the local starport bar and generally the same stuff, day in day out? Especially if they aren't harrowing off on some quest occasionally. When they agree to do something things can run longer than expected. Obstacles crop up.

Look at the example of Han Solo in the first Star Wars movie, (the one from 30 years ago, not the latest three.) He has a nice charter that unexpectedly takes him out of circulation well past the deadline to pay his debt or lose more than just the ship. These things don't crop up in YTU? Nothing tales longer than expected? The player's ships don't get damaged by a corsair or a commerce raider? Goods aren't confiscated upon arrival because of a crooked customs officer, or actually importing the wrong cargo to the planet? (One person's pharmaceuticals is another's illegal addictive substance.)

That kind of stuff never happens? (Even on the random tables?) One encounter with a Corsair or Commerce Raider will wipe out more than 6 months of mortgage payments if it only inflicts minor damage with a couple of hits, forget about major damage, losing the cargo or potentially the ship.

BTW I have been playing and refereeing Traveller off and on since 1979, granted there are some decent sized gaps in there without a game and some time away from the hobby altogether. (For example I never even heard of T4 until after buying T20.) So throwing out 24 years, doesn't impress me. Now if you have run a single continuous Traveller campaign for that long, that would impress me.

 

[Commander Drax]

Have a look at this and let me know what you think

http://the-children-of-earth.org/traveller/index.php?option=com_content&task=view&id=15&Itemid=29

 

[BetterThanLife]

Have a look at this and let me know what you think

http://the-children-of-earth.org/traveller/index.php?option=com_content&task=view&id=15&Itemid=29

At first glance it looks interesting, but it looks like you will still be a bit short. How does the standard crew of 4 Far Trader stack up under this model? (The liner is fragged because this doesn't appear to affect Passage just freight price.)

Under a straight per parsec pricing, the Free Trader and the Fat Trader are still a little ahead but the Far Trader and Liner are fairly close percentage wise.

Also assume that the ships will be traveling at 80% of capacity and 75% of jump capacity. (In otherwords a Far Trader will travel around 3 parsecs per month and a Liner will average 4.5 parsecs per month.) While you might want to travel your full jump each trip, it will not always be practical.

 

[aramis]

The author fails to accound for the extra costs in needed crew for passengers.

Passenger requires 4.5Td, plus 2250Cr in LS plus Cr183 in salary (ct) for the first 8, the second 8 adds another Cr19 each, then the rest of the 8's go back to the first rate (due to crew schedules, where the most experienced purser gets Cr3300/mo rather than Cr3000/mo.

So a passenger costs at least 4500+2250+183=6933 and brings in 10,000...
(The 4500 is in lost cargo tonnage). The costs per ton are 2433, leaving 7567/4.5 = 1681.5556 per ton profit. Almost enough for a passenger ship to make money at J2, until scale efficiencies hit, on non spec. Plus, if one reads carefully, you also lose a ton of cargo to the baggage allowance (Than's some baggage!) dropping the per-ton to 1375.8182. (It drops further still if the passengers aren't in groups of 8.) And the practical limit is about 16 passengers given the tables.

 

[BetterThanLife]

The author fails to accound for the extra costs in needed crew for passengers.

Passenger requires 4.5Td, plus 2250Cr in LS plus Cr183 in salary (ct) for the first 8, the second 8 adds another Cr19 each, then the rest of the 8's go back to the first rate (due to crew schedules, where the most experienced purser gets Cr3300/mo rather than Cr3000/mo.

So a passenger costs at least 4500+2250+183=6933 and brings in 10,000...
(The 4500 is in lost cargo tonnage). The costs per ton are 2433, leaving 7567/4.5 = 1681.5556 per ton profit. Almost enough for a passenger ship to make money at J2, until scale efficiencies hit, on non spec. Plus, if one reads carefully, you also lose a ton of cargo to the baggage allowance (Than's some baggage!) dropping the per-ton to 1375.8182. (It drops further still if the passengers aren't in groups of 8.) And the practical limit is about 16 passengers given the tables.

Now I don't count the cost of Stewards when it comes to passengers. After all if you are going to carry passengers you have to carry the steward whether you have the passengers or not. So I add the steward as a crewman under fixed expenses like the rest of the crew and his space isn't cargo space. Though I can see why you might count him that way. As for the ton of baggage allowance for a Passenger, when you consider what they are paying for the trip, it is likely a business trip, or someone very rich. In either case they are likely to have lots of luggage and/or sample cases. After all at the rate of Cr1=$3 in buying power you are looking at more than an average annual salary per round trip one system away.

 

[aramis]

Counting the steward is an important part when figuring the economic feasability. It puts the passengers at only a slight advantage above freight, and that before accounting for the increased risks of live thinking cargo.

 

[BetterThanLife]

Counting the steward is an important part when figuring the economic feasability. It puts the passengers at only a slight advantage above freight, and that before accounting for the increased risks of live thinking cargo.

They barely make enough difference before accounting for the steward as part of the crew. After all they come in at a net of Cr1600 per ton before you account for anything else. You have to carry the Steward whether you carry the passengers or not. In either case the space required by the Steward isn't available for cargo and the expense of his Life support and salary still has to be covered.

 

[aramis]

In looking at the overall of a specific design, they are a fixed cost. Oh, and you only need a steward if carrying passengers under Bk2/T20. MT and Bk5 both have requirements for stewards for larger crews, etc.

In looking at the designing of a ship, no, they are NOT a fixed cost; the comparison between Cr1300/ton versus 1000 a ton is a serious consideration... but one that is much harder to fill.

 

[BetterThanLife]

In looking at the overall of a specific design, they are a fixed cost. Oh, and you only need a steward if carrying passengers under Bk2/T20. MT and Bk5 both have requirements for stewards for larger crews, etc.

In looking at the designing of a ship, no, they are NOT a fixed cost; the comparison between Cr1300/ton versus 1000 a ton is a serious consideration... but one that is much harder to fill.

True, but in either event, the numbers work the same the average J-2+ ship can't make it on carriage rates, even using this article.

 

[atpollard]

In a universe where only Jump-1 ships can earn a profit, a passenger wanting to travel 2 parsecs will need to travel in 2 jumps, pay for 2 tickets, and spend 2 weeks (plus a probable 1 week layover) getting there. I see no reason why he would be unwilling to pay "per parsec" for a 1 week Jump-2 trip to the same destination. It costs the exact same price and saves him 1 or 2 weeks of travel time.

 

[aramis]

THere are those who are in it for the journey, not the destination. Not many, but given the price point of passage, it should be most of the passengers...