Book 2 economics, again! Beating the dead horse...

[Black Globe Generator]

Originally posted by Sigg Oddra:
Hence the need for a Factor career

Agreed, but IMTU factors represent something a little less...adventurous...than they do in yours!

Originally posted by Sigg Oddra:
By the way, over at the SJGs site Qoltar has reminded me of the term Shipping Agent...

I still like "Company Man" for the factor-special agent you designed - I could see the more bureaucratic factor of MTU going by "Shipping Agent."

 

[Fritz_Brown]

A few items:

1) Time=Money. Even in a place with severely long travel times and communication speed = travel speed.

2) I don't know about multi-ton anything, but FedEx and UPS will ship more than "small packages". We're talking palletized stacks of computer equipment, here. And, no, it won't go via air.

3) FedEx, UPS, and DHL (and USPS, too!) also take distance into account by setting up "zones". If you ship within a zone, that's one price. If you ship to an adjacent zone, that's a bit more. Etc.... Now, this doesn't apply to those one pound boxes that go via air - just the forklift stuff.

4) I like that idea about "high-priority charters"!

 

[aramis]

Fritz:

Those zones are about staffing time more than anything else; they're set up by hoow many FedEx/UPS hubs is the routing going through...

Robject:

Boy, do I feel VINDICATED!!!! Marc's info is pretty much how I've seen it for a long time... and about 180 degrees out from GTFT.

 

[daryen]

Originally posted by robject:
Much to my surprise, Marc responded. ...

</font><blockquote>quote:</font><hr />Everyone understands Cr1000 per ton per jump. Beowulfs carry the J-1 Trade. Maravas carry the J-2 trade. Tukera carries the J-3 and J-4 trade. But Tukera generally doesn't call on the outlying worlds, so a customer needs to use a Beowulf to get to the main routes. Or maybe there is no economic profit to be made if the shipping costs are too much.

</font>[/QUOTE]Just one more point for Marc.

If freight is shipped with a flat Cr1000 per jump, the Maravas will not be carrying the J-2 trade. They can't because they are either 1) out of business or 2) too busy with speculation trying to make their payments.

Again, Cr1000 per jump prevents the J2 freight traffic Marc is talking about. It won't happen.

 

[Ranger]

Originally posted by daryen:
</font><blockquote>quote:</font><hr />Originally posted by robject:
Much to my surprise, Marc responded. ...

</font><blockquote>quote:</font><hr />Everyone understands Cr1000 per ton per jump. Beowulfs carry the J-1 Trade. Maravas carry the J-2 trade. Tukera carries the J-3 and J-4 trade. But Tukera generally doesn't call on the outlying worlds, so a customer needs to use a Beowulf to get to the main routes. Or maybe there is no economic profit to be made if the shipping costs are too much.

</font>[/QUOTE]Just one more point for Marc.

If freight is shipped with a flat Cr1000 per jump, the Maravas will not be carrying the J-2 trade. They can't because they are either 1) out of business or 2) too busy with speculation trying to make their payments.

Again, Cr1000 per jump prevents the J2 freight traffic Marc is talking about. It won't happen. </font>[/QUOTE]Just because they are speculating does not mean they are not also hauling the cargo on the J2 lines. It just means they are not running a regular schedual. In fact, they would probably be waiting to pick up high value high tech loads off of the brokers at the Tukerat hub. The trick is to make enough on the speculating to pay for the trip back where there is probably nothing but cargo to take back to the hub.

Edited to add...

Lets also remember what the role of the Free Traders are in the CT economic system. They are the gap fillers who pick up the slack in the system and provide services to markets that arn't large enough to justify a regular line. If a J2 rout is large, then it will have regular MC line service. If buisness is booming, then there will be more cargo than the schedualed trafic can handle, in which case, Free Traders will starting working the line because there is lots of left over cargo to haul. They may even get a contract from the MC line to haul the frustrated cargo. Where demand is low, the Free traders are only there on a hit or miss basis, hoping to unload a valuable lot they picked up at the main hub, or figuring they can fill their hold because few ships travel that way.

Now, as pointed out, the MegaCorps don't want this environment to be a breading ground for competition, so the game is rigged that most fledgling lines will go bust except in the absolute best of times, but in those best of times, you will get a lot of fledgling lines starting up to take advantage of the opportunity.

 

[daryen]

Originally posted by Ranger:
Just because they are speculating does not mean they are not also hauling the cargo on the J2 lines. It just means they are not running a regular schedual. In fact, they would probably be waiting to pick up high value high tech loads off of the brokers at the Tukerat hub. The trick is to make enough on the speculating to pay for the trip back where there is probably nothing but cargo to take back to the hub.

Uh, no. If you are running speculative cargo out, you are running speculative cargo back. If you don't, you aren't a good enough speculator to survive. Also, if there isn't any speculative cargo to take back, you made a really bad run and should never return to that world.

Under pay-per-jump, the *only* freight a J2 ship will ever carry is the odd dton lot used to fill out the hold.

 

[daryen]

Originally posted by Aramis:
Boy, do I feel VINDICATED!!!! Marc's info is pretty much how I've seen it for a long time... and about 180 degrees out from GTFT.

How are you vindicated? You even disagree with what Marc said. Marc seems to be under the impression that an A2 is somehow going to make money carrying freight. You don't even claim that.

You have already admitted multiple times that the only way an A2 can make money is with pure speculative cargo using very highly skilled traders and brokers. In effect, you don't even believe A2s will be carrying freight.

 

[rancke]

Originally posted by Sigg Oddra:
</font><blockquote>quote:</font><hr />The easiest way to game the system for an A2 is simply for the captain to state to any freight handler that cargos to be delivered two parsecs away will only be delivered in J1 increments (requiring the payment for two jumps). The end result is a pay-per-parsec model, regardless of the rules. This will happen; it is just too easy to do.

And what happens when the freight handler says "no thanks - I'll wait for the next megacorp ship with spare capacity to ship my cargo in one jump"?
Or how about an A2, bought and paid for through speculative trade, offers to ship the lot in one jump 2 for the flat fee?</font>[/QUOTE]You're making an IMO unwarranted assumption here, namely that there will be megacorporation ships that will charge the same for a two-parsec jump as for a one-parsec jump.

Mind you, I'm not saying that it couldn't happen. Underbidding the little guy to drive him out of business is a time-honored mercantile ploy. But the situation will last only so long as there is a little guy to underbid. The moment he is driven out of business, the fee will be increased to everything the market will bear. So for this condition to be Imperium-wide and long-lasting is simply not plausible. No, I'll put it even more strongly: It's simply not possible.

There is no per-parsec fee in the OTU because the megacorps like it that way

That doesn't explain anything, because there's no good reason for the megacorporations to charge too low fees except in very limited and specific circumstances.

Don't forget that the megacorporations compete against each other. True, you could postulate a situation where the megacorporations formed a cartel and drove all competitors out of business, but it wouldn't result in a universe where jump-2 and jump-3 free traders jumped around charging flat fees. It would result in a universe where there were no jump-2 and jump-3 free traders at all (And where the megacorporations charged a lot more than their basic expenses for freight except when they had to lower the fees temporarily to drive some small fry out of business).

If the business practices of the megacorporations allow free traders to ship freight at all, it will allow them to charge enough to cover their true expenses.


Hans

 

[robject]

Well guys, can you state your case succinctly for Marc, then? 'Cause he wants to know.

I know this has been done before. Maybe you can refer me to the link.

Hmm, feel free to challenge the "full hold" bit as well, if you like.

From Marc:

Has anyone gamed out what someone would make at Cr1,000 per parsec?

What are the standard operating expenses for a Marava and a Beowulf? Assuming one week in jump and one week in port.

Assuming a full cargo hold on each, what does each make in profit in a year (don't forget downtime at the end of the year for overhaul).

Assuming optimum use of each ship (ie Marava J2 and Beowulf J1).

Option 1. Cr1,000 per jump.
Option 2. Cr1,000 per parsec.

 

[daryen]

robject,

I will run the numbers and let you know later today.

 

[aramis]

I've had no problem as a GM with players making plenty on Maravas... at least the HG variant thereof. (I've not used a genuine Bk2 design since I got HG... but I do keep the Bk2 prices.)

The trick is to follow the speculation, not a fixed route.

Daryen: yes, I've claimed you make MORE if you genuinely tramp in a J2 than a J1; you've got three times the markets, and thus your odds of a beneficial sale point cropping up for whatever you happen to find available on spec more then double; since more than half the lots have a base value of over KCr10, that puts a 1 point split at KCr1, same as haulage; one can usually find a good 4-8 point DM split, which generally means a 4-6 point sale split, on the AVT.

By claiming that the routes are large, flowing with bulk haulers, GTFT puts a MODERN approach to trade into the GTU. I've always assumed that trade was several orders of magnitude lower (like 5 or 6) and that worlds are not dependent upon constant trade flows. MWM posits a non-established non-stable market for traders; this is part of my argument and has been for years. THe part that gets Chris and Hans either ranting at me in obvious angry fury or tuning me out completely in despair at my "oddities of beliefs" about the OTU and my delusions of small trade flows.

If you pull into a colony, and all they have for sale is rum, either you deadhead, or you buy rum. You might do better to buy the rum and go where you're likely to sell rum than stay on course and deadhead...

 

[rancke]

Originally posted by Aramis:
I've had no problem as a GM with players making plenty on Maravas... at least the HG variant thereof. (I've not used a genuine Bk2 design since I got HG... but I do keep the Bk2 prices.)

As to that, as a player I've abused the trade system to a fare thee well myself (Get enough money to have a substantial cushion so that you don't have to sell if you don't like the price offered. Jump around and buy stuff at 30-50% when it's offered, then sell it at 150-300%. It took my group three game sessions to parlay a few million credits into three billion credits). Don't bother to try to convince me that the trade system reflects any kind of plausible reality. It's fun, and a good referee may even be able to keep players from abusing it if he doesn't follow the rules slavishly (We got our start because our GM allowed us to buy 61 multi-million credit computers for 30% with a loan we took out in our (paid-up) ship, and then allowed us to sell every one of them for 300% each on a world with a pop level of 4), but it's not realistic and to use it as a basis for building the background is... not a good idea.

By claiming that the routes are large, flowing with bulk haulers, GTFT puts a MODERN approach to trade into the GTU.

I've never looked at it like that, but I don't see what's so wrong about that. These are, after all, modern societies.

THe part that gets Chris and Hans either ranting at me in obvious angry fury or tuning me out completely in despair at my "oddities of beliefs" about the OTU and my delusions of small trade flows.

I've never detected any "obvious angry fury" in anything Chris has posted in reply to you, and if there is any angry fury to be found in any of my posts, I didn't put it there.

If you pull into a colony, and all they have for sale is rum, either you deadhead, or you buy rum. You might do better to buy the rum and go where you're likely to sell rum than stay on course and deadhead...

True, but besides the point unless you travel exclusively to low-population worlds. Any world with a sizable population will have lots of different stuff for sale (unless some corporation happens to have a complete monopoly of all trade, in which case there won't even be rum for sale and presumably a canny trader would never go there in the first place).


Hans

 

[robject]

It looks as though the fundamentals being discussed here boil down to how busy interstellar trade is likely to be in the Imperium.

Wil, Hans, Mike, tell me if I've got the essence of it here:

"The Frontier" Interstellar freight shipped is relatively insignificant (in most places) compared to world production. This tends to support an ad hoc, inefficient interstellar trade system in most cases.

"The Core" Interstellar freight shipped is significant (in most places) compared to world production. This tends to support a robust, efficient interstellar trade system in most cases.

Originally posted by daryen:
robject,

I will run the numbers and let you know later today.

Thank you, Mike.

 

[Fritz_Brown]

Originally posted by thrash:
Surface Deployment and Distribution Command liner rates for general container cargo, 2d Quarter FY06:

East Coast to East Coast: $19.43
East Coast to Northern Europe: $79.87
East Coast to British Isles: $86.72
East Coast to Eastern Mediterranean: $171.73
East Coast to Japan: $537.54

Freight rates are proportional to distance.

Parcel post rates are a false analogy, having completely different economies of scale and distance than general cargo. The conditions that would permit general cargo pricing to reflect parcel post rates don't exist in Traveller.

Ummm, NO. The problem with your surface freight numbers is that they will (mostly) move at the same speed. They are all moving at J-1 essentially. If I had a faster boat (significantly faster - say, twice as fast), I could charge more because your product would get to its intended market sooner. (This is assuming there's a need for your product to get their faster.) Clipper ships became a popular (and profitable) method of transportation because they were faster than regular cargo ships.

Originally posted by rancke:
Don't bother to try to convince me that the trade system reflects any kind of plausible reality. It's fun, and a good referee may even be able to keep players from abusing it if he doesn't follow the rules slavishly /SNIP/, but it's not realistic and to use it as a basis for building the background is... not a good idea.

Well, yeah. Let's definitely keep that in mind.

 

[rancke]

Originally posted by Fritz88:
Ummm, NO. The problem with your surface freight numbers is that they will (mostly) move at the same speed. They are all moving at J-1 essentially. If I had a faster boat (significantly faster - say, twice as fast), I could charge more because your product would get to its intended market sooner. (This is assuming there's a need for your product to get their faster.) Clipper ships became a popular (and profitable) method of transportation because they were faster than regular cargo ships.

In addition to there being a need to get the product to the market sooner, you also either have to have a monopoly or to be competitive. You couldn't charge twice as much if you had competition that underbid you. The problem with the classic costs is that it costs more than Cr1000 per dT to carry something by jump-3, so there's no reason why anyone would carry anything by jump-3 if all they're allowed to charge is Cr1000.

And if a jump-3 ship can make ends meet by speculative trade, it won't want to carry freight, because the freight would take up space that could have been used to make money by speculative trade.

And if there's only enough specucative trade to fill a jump-3 ship partly up and leaving it no choice but to carry freight in the remaining cargo space, that ship will be outcompeted by a smaller ship that will be able to bid more for the speculative trade items because it doesn't have to cover the losses made on the freight.


Hans

Hans

 

[robject]

Originally posted by rancke:
In addition to there being a need to get the product to the market sooner, you also either have to have a monopoly or to be competitive. You couldn't charge twice as much if you had competition that underbid you. The problem with the classic costs is that it costs more than Cr1000 per dT to carry something by jump-3, so there's no reason why anyone would carry anything by jump-3 if all they're allowed to charge is Cr1000.

Marc's view on this is a bit bizarre for me, and its main purpose is probably simplicity, but it seems to rely on an inefficient market.

It's bizarre that a Type A ship can get Cr3000 per ton to ship cargo 3 parsecs, but that's how Marc's system works. If the player's Type A is the only ship in town, then customers will essentially pay per-parsec rates.

On the other hand, if a Type A2 shows up, the customer will choose the A2. Apparently, the A2 is more then willing to take its rate.

Thus, Marc's rules seem to approximate a seller's market EDIT:, but with certain price fixes.End Edit

The jump-3 craft is a telling point. At J3 there is no tramp trade; or rather, the longer legs a ship has, the more it has to rely on high passengers and things like subsidies and mail contracts. In other words, the bigger you get, the more you have to act like a bigger company.

 

[robject]

I and a friend once gamed out what a fledgling line could make on a lucrative route.

His player-character bought a 600-ton liner and hired NPCs to run it between Rhylanor and Porozlo. It made enough money in a year to let him buy a second liner, then a third, all on that one route, and still have enough left over to cruise the Marches in his Far Trader.

With 3 liners in operation, we projected he could pay them off in a few years each.

 

[daryen]

Originally posted by Aramis:
I've had no problem as a GM with players making plenty on Maravas... at least the HG variant thereof. (I've not used a genuine Bk2 design since I got HG... but I do keep the Bk2 prices.)

The trick is to follow the speculation, not a fixed route.

I am not arguing that you can't make money speculating in any ship you chose. Heck, there is no reason you can't make money in a HG2 scout using speculation.

That is totally ancillary to my point.

My point is that, for the whole implied economic system of the OTU to have a chance, for the players to ever have a chance to borrow money for a starship, you have to be able to make money on freight.

Now, you might have to assume full loads, with all high passengers, and use very rose colored glasses, but you have to be able to show the lending institution that you have some level of reasonable chance to be successful.

And a Marava carrying freight won't even cover half of its expenses plus payment. No lending institution will make that loan.

 

[robject]

And Marc responds again.

Some of this may sound familiar.

Also taking into account the needs of game rule simplicity. I don't want the GM to do lots of calculations whenever a Beowulf gets to port. There are enough as it is.

In a trade-significant economy, I think the MegaCorps have everything tied up with long term contracts and relationships. We little guys are not going to compete with Fedex, or Naasirka.

Besides, if I were Naasirka transporting goods for my luxury goods subsidiary, I would charge cost plus 10% and tie it up with a long term contract.

In a frontier economy, I think the Traders' Guild and local worlds get together to establish standard rates. To encourage trade, facilitate planning, and to prevent (or discourage) gouging. That is currently Cr1,000 per ton per jump. Enough to make money, but requires work. Requires speculation on cargos to make ends meet. Luck, hard-working guys ultimately get rich. Lazy, unlucky guys don't.

Rich guys have good ships and ultimately negotiated those cost + 10% contracts and graduate out of free trading.

So the real key is our term Free Trader. A ship/merchant who carries goods in "international" trade. Like the sutler's wagon following an army, or a merchant's wagon selling to the indians or the settlers.

That implies that the money to be made by a Free Trader is in speculation rather than freight hauling.

 

[daryen]

Originally posted by robject:
I and a friend once gamed out what a fledgling line could make on a lucrative route.

His player-character bought a 600-ton liner and hired NPCs to run it between Rhylanor and Porozlo. It made enough money in a year to let him buy a second liner, then a third, all on that one route, and still have enough left over to cruise the Marches in his Far Trader.

With 3 liners in operation, we projected he could pay them off in a few years each.

But buying a J3 ship that will exclusively run a J1 route is stu - err - inefficient. He would make much more money if he would buy custom J1 liners. They are far cheaper and will be able to hold way more passengers and cargo, to the tune of 140 dton. That would allow it to double the number of staterooms, and still add 20 dton more cargo.

Then he can buy a standard liner and use it to cruise the Marches in style instead of slumming around in a piddly Marava.

BTW, I think it is interesting to note that when discussing the financial situation of the liner in Adv13, it explicitly states that it will, even under the best circumstances, lose money when doing J3 legs. It has to restrict itself to J2 or less to have a chance to make money.