Damned subtle wordings....

[mike wightman]

If they have full holds they make a lot of money. Pretty easy how the price fixing comes about, the big boys could actually charge less than Cr1000 per ton of cargo per jump and really turn the screw on those poor free/far traders.

Jump 3 would have to be the 4kt hull and jump 4 the 3kt, wonder if they can break even or make a profit with freight only?

Now if the hold is full with a megacorp's propriety 'speculative' cargo rather than freight, a broker 4 at both ends, how much profit doest that make the megacorp?

 

[rancke]

If they have full holds they make a lot of money. Pretty easy how the price fixing comes about, the big boys could actually charge less than Cr1000 per ton of cargo per jump and really turn the screw on those poor free/far traders.

But how does the Imperium enforce it? Free Traders are already operating on the fringes of the law. How does the Imperium prevent Joe Free-trader from charging Cr1000 per ton of freight officially and then kick back Cr400 per ton?

And no one has been able to explain how the Imperium forces Tukera and Al Moray to operate jump-4 liners that bleed money with every jump at the fixed rates.


Hans

 

[aramis]

But how does the Imperium enforce it? Free Traders are already operating on the fringes of the law. How does the Imperium prevent Joe Free-trader from charging Cr1000 per ton of freight officially and then kick back Cr400 per ton?

And no one has been able to explain how the Imperium forces Tukera and Al Moray to operate jump-4 liners that bleed money with every jump at the fixed rates.


Hans

Price fixing usually goes the other direction, Hans. As in, "You may not charge more than X."

And that's readily handled... by use of passage coupons, and redemption being at the far end. Likewise, you interview every passenger about having to spend money aboard. Find one of those who do report it, and the SPA downloads the video surveilance from the anti-hijack, and checks it. If they find reason to validate the complaint, they impound the ship and sieze the crew... holding in isolation, using the best imperial truth scanners available to that SPA location, they interrogate the crew, extract 100x the value, and annotate the transponder... and no imperial starport of class A, B, or C lets you make use of the passenger boards for a year.

Sure, you CAN take people for more than coupon rates... but they have reasons they are willing to pay more for the same service.

Actually, the truth is, the book rates work fine for large book 2 ships at J2.
J3 is another matter entirely.

 

[rancke]

But how does the Imperium enforce it? Free Traders are already operating on the fringes of the law. How does the Imperium prevent Joe Free-trader from charging Cr1000 per ton of freight officially and then kick back Cr400 per ton?

And no one has been able to explain how the Imperium forces Tukera and Al Moray to operate jump-4 liners that bleed money with every jump at the fixed rates.

Price fixing usually goes the other direction, Hans. As in, "You may not charge more than X."

But if you don't enforce the price the other way, the megacorporations do not benefit from being able to charge Cr1000 per ton for jump-1 freight, hence removing any reason why the Imperium would impose such a regulation in the first place[*].

[*] Mind you, the rules really ought to work outside the Imperium too. Having to rely on Imperial regulations to explain something as basic as trade rules is a big fat flaw in its own right.​

As for the price fix in the other direction, that's what my second paragraph addresses.

And that's readily handled... by use of passage coupons, and redemption being at the far end. Likewise, you interview every passenger about having to spend money aboard. Find one of those who do report it, and the SPA downloads the video surveilance from the anti-hijack, and checks it. If they find reason to validate the complaint, they impound the ship and sieze the crew... holding in isolation, using the best imperial truth scanners available to that SPA location, they interrogate the crew, extract 100x the value, and annotate the transponder... and no imperial starport of class A, B, or C lets you make use of the passenger boards for a year.

And while you're employing this huge control apparatus, how about preventing all other forms of law-breaking while you're at it? Of course, that prevents 90% of all Traveller adventures other than The Trading Game. But hey, as long as you preserve one really bad rule, that's a small price to pay, right?

You really can't have the Imperium enforce a price fix without changing it to a tight, repressive, all-powerful government that I, for one, fail to see in any of the canonical setting material.

Not that it would address the existence of jump-4 freighters and liners if you could.

Sure, you CAN take people for more than coupon rates... but they have reasons they are willing to pay more for the same service.

Like the reason why they would chose a free trader instead of a regular liner in the first place, perhaps?

Actually, the truth is, the book rates work fine for large book 2 ships at J2.

IIRC they work for J2 HG ships too. The canonical rates are too high for J1, about right for J2, and too low for J3+.

The only bend these need is allowing a factor on their route to book their passengers in advance... J3, and making a profit on freight at KCr1/Ton... (but unrealistically high numbers of HP and absolutely full freight)

I take it you're ignoring the equally canonical one jump per 14 days rule? Why is it OK to change that but not OK to change the per-jump payment rule?


Hans

 

[aramis]

I take it you're ignoring the equally canonical one jump per 14 days rule? Why is it OK to change that but not OK to change the per-jump payment rule?


Hans

Nope. It's Not "Equally Canonical" - because we have, in Bk7, explicit ways around it and explanation for it, and it uses the word "usually" - given the margins, J3 isn't "usual".
"Commercial starships usually make two jumps per month." TTB, p.49
"Usually" allows for exceptions.
even at 3J4/mo, I can't get J4 down to KCr1/Td.

However, I can make a profit on a J4 Subsidy on 2J4 with a 3000Td pure cargo design.

 

[McPerth]

I could almost agree with that, except I don't think it would actually work that way, and there are plenty of important systems that are too unreachable. Take Jewell, for example. The only way it can be reached by a J2 ship from Regina is through a very circuitous route through extra-Imperial systems - 8 jumps at best with 6 out of the Imperium. But with J3, 4 jumps, all inside the Imperium.

Those important planets would be served by larger lineers, most of them from a megacorp.

Already on other threads, the main trade lines are seen as main train stations, from where a fleet of tramp freighters (which will represent the fleets of trucks) distribute them on their zone of influence.

So benefiting J1 ships will encourage stops in otherwise ignored planets without directly subsiding this trade (and so, cheaper for the goverment/Imperium).

EDIT: how to implemet this by the referee, should the players decide to cut down prices, is up to him

Who will make a port of call a small (from the trading point of view) world between 2 large ones, at J1 of both, with a J2 ship that allows you to skip it? But if your ship is J1, you're likely to stop at it and try some commerce, even if to cut the loss of this extra stop you must make.

But how does the Imperium enforce it? Free Traders are already operating on the fringes of the law. How does the Imperium prevent Joe Free-trader from charging Cr1000 per ton of freight officially and then kick back Cr400 per ton?

And no one has been able to explain how the Imperium forces Tukera and Al Moray to operate jump-4 liners that bleed money with every jump at the fixed rates.

Hans

I guess the time for your annual maintenance time is also the time for the government to review your lists and check them (as they must be done on an A or B starport, Imperial presence will be higher than most ports of call for most free traders). If governmental/imperial taxes (already featured/assumed in normal costs and prices) are based on those 1000 Cr/ton for freight, and your list says you carried 400 tons, you'll have to pay for 400000 Cr earned; if you only charged Cr 400/ton and your true earning was 160000, they you have a greater loss.

Of course there will be people who skips (breaks) the laws, as in any law, but this way I point is a simple and probably effective way to difficult them to keep breaking it.

 

[aramis]

In Re Enforcing minimum prices: seldom an issue when a maximum is set.

When competition is managed with a maximum allowed price, the vast majority will operate at that price and rake the profits, because if they don't, then suddenly they start getting all kinds of bad press as lies start circulating around them. (This has happened recently in some taxi cab lines.)

Also, a normal healthy markup is between 30% and 100%, depending upon industry - the air-freight operators I know run a 100% over costs markup.

Since a J3 isn't going to make at rate, the Gov't can subsidize the routes it wants J3 on and get prices down to around KCr1 simply by using large subsidized freighters. The return on investment is about nil, but I can get a large 300Td J4 hauler on subsidy returning a quarter million per trip.... It'll take 1400 years to show the bank a profit...

Same basic design, but J3 instead:

Design
3000.0 0330.0 Streamlined Hull StdClassDiscount
0150.0 0015.0 Bridge
0002.0 0018.0 Computer Model/2bis
0125.0 0240.0 JD Z=J3
0029.0 0060.0 MD q=M1
0073.0 0096.0 PP z=P3
0568.0 0071.0 Staterooms x142
1123.0 0000.0 Cargo
3000.0 0747.0 Totals

Financed Data
03112500.0 Monthly Payment
00062250.0 Maintenance set-aside
00915000.0 Fuel
00103300.0 Salaries CO XO 1P 1N 7E 14S 1M 3A 1O
00572000.0 Life Support
04765050.0 Total Liabilities:

00001011.0 Cargo Tonnage less Baggage, Mail
02022000.0 Cargo Income less baggage
01120000.0 High Passage income
03,142,000.0 Total Income

01,623,050.0 Loss
00001802.7 Op Cost per cargo ton per jump
00000600.9 Op Cost per cargo ton per Parsec

Subsidy Data
00000000.0 Monthly Payment
00062250.0 Maintenance set-aside
00915000.0 Fuel
00103300.0 Salaries CO XO 1P 1N 7E 14S 1M 3A 1O
00572000.0 Life Support
01652550.0 Total Liabilities:

00001011.0 Cargo Tonnage less Baggage, Mail
02022000.0 Cargo Income less baggage
01120000.0 High Passage income
03,142,000.0 Total Income

00744,725.0 Subsidy Payment:
00744,725.0 Profit
00000263.4 Op Cost per cargo ton per jump
00000087.8 Op Cost per cargo ton per Parsec

1,003.1 Years to repay principal:

This mixed design relies upon full HP. Not likely, but it'll still make money... not for the subsidizer, unless it speculates, but it can operate at a viable rate.

Oh, and the number 2 cost for ships is fuel... install a non-book-2 fuel purifier, and cut fuel costs by 80%...

 

[rancke]

Nope. It's Not "Equally Canonical" - because we have, in Bk7, explicit ways around it and explanation for it, and it uses the word "usually" - given the margins, J3 isn't "usual".

Circular reasoning. Since J3 can't make a profit if it behaves in what is described as the usual manner, you conclude that can't be usual. But since J3 and J4 is portrayed as usual, that argument falls flat. Al Morai is specifically said to do two jumps per month, however nonsensical that is.

"Commercial starships usually make two jumps per month." TTB, p.49
"Usually" allows for exceptions.

But exceptions do not establish usual practice.

even at 3J4/mo, I can't get J4 down to KCr1/Td.

That alone suffices to prove that per-jump pricing is nonsense. (Except as a game artifact for running PC-crewed free traders, for which I'm sure it works just fine).

However, I can make a profit on a J4 Subsidy on 2J4 with a 3000Td pure cargo design.

But the J4 ships that we have canonical descriptions of all carry passengers. Can you make a profit with a Tukera Longliner? Or a Tukera type AT freighter? Or a Oberlindes type CT Cargo Carrier?

You seem to have overlooked the rest of my arguments:

* If you don't enforce the price fix for jump-1 traffic, the megacorporations do not benefit from being able to charge inflated prices for jump-1 freight and passengers, hence removing any reason why the Imperium would impose such a regulation in the first place.

* The rules really ought to work outside the Imperium too. Having to rely on Imperial regulations to explain something as basic as trade rules is a big fat flaw in its own right.

* You can't have the Imperium enforce a price fix without changing it to a tight, repressive, all-powerful government that I, for one, fail to see in any of the canonical setting material.


Hans

 

[rancke]

So benefiting J1 ships will encourage stops in otherwise ignored planets without directly subsiding this trade (and so, cheaper for the goverment/Imperium).

You don't actually benefit J1 ships by forcing them to charge twice as much to carry something two parsecs in two jumps as you force J2 ships to charge for carrying it the same two parsecs in one jump.

And why would the Imperium want to benefit J1 ships? J1 ships already have a niche they dominate: carrying goods and passengers back and forth on 1-parsec routes.

EDIT: how to implemet this by the referee, should the players decide to cut down prices, is up to him.

If a set of game rules create a problem, I think it ought to provide guidance for solving that problem too. Whenever I hear "Well, the referee is free to step in", I know there's a bad rule being defended.

Who will make a port of call a small (from the trading point of view) world between 2 large ones, at J1 of both, with a J2 ship that allows you to skip it?

No one, because all the trade from the small world will be carried on J1 ships.

But if your ship is J1, you're likely to stop at it and try some commerce, even if to cut the loss of this extra stop you must make.

Yes, if you're a tramp merchant who just happens to have bought a load of speculative goods that you believe you can sell at a profit on a world two parsecs away, you'll probably see if you can pick up something to increase your profits on that world in between. But what does that have to do with a price fix? And why would the Imperium care if you visit Smallworld or not? And if it did care, wouldn't you be more likely to find passengers and freight if you were allowed to charge Cr600 per ton and Cr6000 per passenger?

I guess the time for your annual maintenance time is also the time for the government to review your lists and check them (as they must be done on an A or B starport, Imperial presence will be higher than most ports of call for most free traders). If governmental/imperial taxes (already featured/assumed in normal costs and prices) are based on those 1000 Cr/ton for freight, and your list says you carried 400 tons, you'll have to pay for 400000 Cr earned; if you only charged Cr 400/ton and your true earning was 160000, they you have a greater loss.

Assuming that the Imperium does tax individuals, which does not seem to be the case. (That is to say, there's no evidence whatsoever that it is the case and I for one do not think it would fit the Imperium as portrayed to establish that it did. But this is edging into opinion territory.)


Hans

 

[rancke]

In Re Enforcing minimum prices: seldom an issue when a maximum is set.

Which part are you addressing here? The J1 merchant undercutting his competition so that he gets to jump with full cargo hold while the one that charges the full price is forced to jump with half-empty hold or the J4 merchant who goes bankrupt because he's not allowed to charge enough to make a profit?

When competition is managed with a maximum allowed price, the vast majority will operate at that price and rake the profits, because if they don't, then suddenly they start getting all kinds of bad press as lies start circulating around them. (This has happened recently in some taxi cab lines.)

And if there is no profit to rake in, no one will operate at all. Hence no Tukera Longliners and AT freighters. But we know for a fact that Tukera Longliners and AT freighters exist and operate. So either Tukera is cheerfully pouring money into an empty hole or competition is not really being managed at the canonical rate.

Also, a normal healthy markup is between 30% and 100%, depending upon industry - the air-freight operators I know run a 100% over costs markup.

I'm not quite sure just what you're getting at here. My calculations assume that the ships are run at a 6.25% return on initial investment (ignoring the differences between bank loans and owner investments for ease of calculations).

Oh, and the number 2 cost for ships is fuel... install a non-book-2 fuel purifier, and cut fuel costs by 80%...

Oh, I always assume that (Actually, I assume that regular shipping lines take steps to ensure the availibily of purified fuel at low rates, thus obviating the need for an onboard fuel purifier to cut down on cargo capacity). But IIRC this number 2 cost is pretty minute compared to the number 1 cost.


Hans

 

[McPerth]

You don't actually benefit J1 ships by forcing them to charge twice as much to carry something two parsecs in two jumps as you force J2 ships to charge for carrying it the same two parsecs in one jump.

And why would the Imperium want to benefit J1 ships? J1 ships already have a niche they dominate: carrying goods and passengers back and forth on 1-parsec routes.

No one, because all the trade from the small world will be carried on J1 ships.

Ok, I'll rephrase my question: who will buy a J1 ship if not because it can give more return to inversion than a J2? And this is only true if prices are per jump, instead of per parsec.

J1 ships are handicapped enough, and the only way to keep them running (and so, not to abandon those small systems) is to give them some advantage. The fixed prices, that allow them to run at more benefit per investment may well be it.

If a set of game rules create a problem, I think it ought to provide guidance for solving that problem too. Whenever I hear "Well, the referee is free to step in", I know there's a bad rule being defended.

(...)

Assuming that the Imperium does tax individuals, which does not seem to be the case. (That is to say, there's no evidence whatsoever that it is the case and I for one do not think it would fit the Imperium as portrayed to establish that it did. But this is edging into opinion territory.)

Then you'll think all RPGs rules are bad, because the quote "Well, the referee is free to step in" is in on the introduction of any RPG I've seen till now... (in fact, I think is one of the basis of RPGs) .

Now seriously, to change any aspect of the economical rules set in Traveller (or any other game, for what's worth) is seriously altering its balance. As you say, there's no evidence about Imperium taxing individuals (at least directly, it taxes them through planetary governments), but I think is logical to think the Imperium somewhat taxes ships and trade (see that I don't talk about taxing people, but the ship as if it was a company, though maybe I was no clear enough on that). I couldn't find a single place in the rules where those taxes are explicited, so, either space travel is tax-free (and I have a hard time to believe that) or the costs are assumed featured in the operating costs. As this is not explicity featured in the game and I assume it's featured in the costs, if you alter the costs it could be alteres, but I'm not sure how.

Yes, if you're a tramp merchant who just happens to have bought a load of speculative goods that you believe you can sell at a profit on a world two parsecs away, you'll probably see if you can pick up something to increase your profits on that world in between. But what does that have to do with a price fix? And why would the Imperium care if you visit Smallworld or not? And if it did care, wouldn't you be more likely to find passengers and freight if you were allowed to charge Cr600 per ton and Cr6000 per passenger?

About why should the Imperium care about this small planet, why do governments care about small villages? perhaps because they are also citizens? perhaps because they want to keep them integrated (as much as this word can be applied to the Imperium)?

About what has it to do with fixed prices, the only answer I can give you is what I said above: nothing directly, but fixed prices is what keeps J1 shps being used, bought and sold. So, IMHO, probably this same J1 ship that keeps this small planet on touch with the Imperium will not even exist without fixed prices, as it would be an obsolete artifact with no advantages.

 

[rancke]

Ok, I'll rephrase my question: who will buy a J1 ship if not because it can give more return to inversion than a J2? And this is only true if prices are per jump, instead of per parsec.

You buy a jump-1 ship to service a 1-parsec route. Across one parsec J1 ships out-compete J2 ships. This is true no matter how prices are calculated, because J2 ships are more expensive than J1 ships and have less carrying capacity.

J1 ships are handicapped enough, and the only way to keep them running (and so, not to abandon those small systems) is to give them some advantage. The fixed prices, that allow them to run at more benefit per investment may well be it.

Fixed prices do not increase J1 ships' reasons for visiting small worlds. If anything, it decreases them because shippers won't be able to make a profit on as many goods when the cost of shipping is Cr1000 as they can when the cost is Cr600. So the result is fewer freight loads and fewer ships visiting.

Properly designed subsidies would work, assuming anyone had the money and the desire to pay them.

Then you'll think all RPGs rules are bad, because the quote "Well, the referee is free to step in" is in on the introduction of any RPG I've seen till now... (in fact, I think is one of the basis of RPGs) .

No, I think any rule that doesn't require the referee to step in and modify it is a perfectly spiffing rule.

Now seriously, to change any aspect of the economical rules set in Traveller (or any other game, for what's worth) is seriously altering its balance.

I'm not sure that would actually apply for any merchant campaign that I would ever run, but I'm not actually proposing to alter the rules of The Traveller Trading Game. I don't think it would be much of a problem, but I could be wrong there.

What I object to is using the rules for running a PC-crewed free trader to determine significant setting details concerning regular shipping lines.

About why should the Imperium care about this small planet, why do governments care about small villages? perhaps because they are also citizens? perhaps because they want to keep them integrated (as much as this word can be applied to the Imperium)?

If the Imperium cared, and if it actually was a problem, it could simply give out a few subsidies instead of mustering a huge bureaucracy to impose a massively trade-distorting, not to mention trade-inhibiting, regulation.

About what has it to do with fixed prices, the only answer I can give you is what I said above: nothing directly, but fixed prices is what keeps J1 shps being used, bought and sold.

And all I can do is point out that this is not true. Fixed prices would not keep J1 ships in business.


Hans

 

[Carlobrand]

...If the Imperium cared, and if it actually was a problem, it could simply give out a few subsidies instead of mustering a huge bureaucracy to impose a massively trade-distorting, not to mention trade-inhibiting, regulation...

Y'know, after much debate, and after initially arguing that the trade rules made no sense, I'm becoming convinced of the opposite - and it's based on that comment about Tukera making its money in speculative trading. I'm not entirely sure it's the bureaucracy pushing these price conventions.

Consider: Tukera has a sweet deal on a particular long jump route between two planets. They buy X here, sell it there and buy Y, return to sell Y and buy more X here - in the process making a chunk of money. They enjoy certain advantages that make their ships less costly and their routes more cost-effective - no need to borrow from banks, they likely own their own warehouses, and so forth. They do not want competition on that long route. How do they make things harder for the competition?

How did Wal-mart drive the mom-and-pop stores out of the market? They used their advantages to deliver prices below what the mom-and-pops could offer. So Tukera says, "Hey, we'll give you the same rates for Jump-2 or Jump-3 or Jump-4 that you usually get for Jump-1". Now the route's a lot harder, competitors are running closer to the edge even if they do their own speculation because they don't have the cost-reducing advantages the mega has. Tukera Wal-Mart's the competition, the competition ends up concentrated in the routes Tukera has little interest in, mostly the jump-1/jump-2's. Where the Jump-1/jump-2 routes are attractive, Tukera competes head-to-head using bigger ships that offer more amenities for travellers, leaves the competition struggling to fill staterooms, ends up dominating in highly developed sectors.

That doesn't mean you're going to get everyone slavishly wedded to this price structure. For example, there'll be specialty routes with just enough trade for one or two small entrepreneurs who can set their own prices - but of course higher prices reduce profit margins for manufacturers. Fewer types of goods will be worth shipping - until someone arrives on the scene with the right advantages to undercut those prices and profit from the increase demand, or until the markets develop the right combination of speculative trade goods to attract the attention of someone able to profitably undercut those prices (or able to do so unprofitably for long enough to drive the smaller competitors under). Might be a bit tricky calculating who's doing what, though, since it's so dependent on specific world details. Probably best for just a general idea of how things work, and then iron out the details as circumstances demand.

On the other hand, that could also mean Tukera's free to cut prices below the norms if they're eager to dominate a particularly attractive trade route.

 

[mike wightman]

Bingo.

Somewhere up thread I posted that it all finally made sense to me when I looked at it from the perspective of the business shipping the trade goods to a market rather than the ship operator trying to make ends meet.

As Aramis has so kindly shown, large bulk freighters are insanely profitable on the jump 1 and jump 2 routes just carrying freight.

Megacorporations are in the business of shipping their own goods to a market that maximises profit for themselves - so they want to fix the freight rates so as to make it difficult for competitors to start up. They can also subsidise the jump 3 and 4 routes themselves - although if they find a profitable enough commodity to be traded between two worlds at a distance of jump 4 form each other they can easily make that turn a profit too.

 

[rancke]

Consider: Tukera has a sweet deal on a particular long jump route between two planets. They buy X here, sell it there and buy Y, return to sell Y and buy more X here - in the process making a chunk of money.

And that's very nice for them. So why do they reduce their profits by carrying passengers and freight at a loss instead of using all their cargo capacity to carry speculative cargo?

And if there isn't enough speculative freight to fill their holds, why not carry freight and passengers at a rate that actually makes a profit?

They enjoy certain advantages that make their ships less costly and their routes more cost-effective - no need to borrow from banks, they likely own their own warehouses, and so forth. They do not want competition on that long route. How do they make things harder for the competition?

By making it difficult for the competition to engage in speculative trade, of course. Just how fixing passenger and freight prices helps there is a bit of a mystery, isn't it?

How did Wal-mart drive the mom-and-pop stores out of the market? They used their advantages to deliver prices below what the mom-and-pops could offer. So Tukera says, "Hey, we'll give you the same rates for Jump-2 or Jump-3 or Jump-4 that you usually get for Jump-1".

Tukera would be able to offer the same prices without having the prices fixed.

Now the route's a lot harder, competitors are running closer to the edge even if they do their own speculation because they don't have the cost-reducing advantages the mega has.

Unless the others are a sector-wide corporation or a subsector-wide corporation or an interface line. In fact, the only competition they'd be able to force out would be the free traders that isn't any real competition anyway.

Tukera Wal-Mart's the competition, the competition ends up concentrated in the routes Tukera has little interest in, mostly the jump-1/jump-2's. Where the Jump-1/jump-2 routes are attractive, Tukera competes head-to-head using bigger ships that offer more amenities for travellers, leaves the competition struggling to fill staterooms, ends up dominating in highly developed sectors.

But the fixed prices don't hamper the J2 competition.

The rest of your post seems to assume that the prices AREN'T fixed the way canon says they are.


Hans

 

[rancke]

As Aramis has so kindly shown, large bulk freighters are insanely profitable on the jump 1 and jump 2 routes just carrying freight.

Provided they can actually prevent the competition form underbidding them. Which requires someone to enforce the fix. And, incidentally, hampers trade between worlds because fewer goods can be carried at a profit.

I'm ignoring the rest of your post because I just refuted most of it in the previous post.


Hans

 

[Carlobrand]

And that's very nice for them. So why do they reduce their profits by carrying passengers and freight at a loss instead of using all their cargo capacity to carry speculative cargo?

Well goodness, I don't know - why did Wal-mart do it? They certainly could have pulled in a lot more profit selling things at the prevailing rates rather than undercutting others - which has made THEIR rates the prevaling rates.

And if there isn't enough speculative freight to fill their holds, why not carry freight and passengers at a rate that actually makes a profit?

I dunno, maybe 'cause it gives the competition an opening to survive? And therefore to compete for the speculative freight you want? You don't think big businesses do things to make things tough on competitors?

By making it difficult for the competition to engage in speculative trade, of course. Just how fixing passenger and freight prices helps there is a bit of a mystery, isn't it?

"Fixed"? "Fixed" as in Tukera sets rates that kill their competition and leaves them to dominate the choice routes? I dind't think that was complicated. "Fixed" as in some authority declares a requirement? I didn't think I was making that argument. I was pretty sure my argument was that those "fixed" rates could as easily be the result of ruthless business decisions by big players as the result of government fiat.

Tukera would be able to offer the same prices without having the prices fixed.

Again, which "fixed"?

Unless the others are a sector-wide corporation or a subsector-wide corporation or an interface line. In fact, the only competition they'd be able to force out would be the free traders that isn't any real competition anyway.

That's nonsense. A jump-1 free trader's no competition on a jump-3 or jump-4 line. I think you know there's likely to be a range of companies between the 1-ship free trader and the bigger subsector-wides. THOSE could compete, if they could attract the loans and set rates that made the routes profitable. And, that's what a mega like Tukera would seek to prevent. If you're big enough that your capital reserves allow you to buy thousand-ton ships outright and develop the other infrastructure needed to keep your costs low, Tukera's no threat - you're insulated by your size. If you're not - well, then you don't compete, or at least not for long.

Wal-mart can Wal-mart the mom-and-pops and the smaller competition. That game doesn't work as well when the competitor is above a certain size. Tukera can set its rates to "immunize" the jump-3 or jump-4 trade against businesses below a certain critical size, thereby assuring more business for itself, but that's not likely to impact Oberlindes.

But the fixed prices don't hamper the J2 competition.

Not really. The prices have some impact: they run a bit closer to the edge, takes less in the way of bad luck here and there to thin that field. However, it's still possible to make money at jump-2 given a halfway decent route, so there's likely to be fresh competition moving in to replace anyone who gets weeded out. Might take other tricks, if you're trying to dominate a given route: negotiate an exclusive contract with some customer while enjoying the sights at a high-end strip-club, for example. That seemed to be the popular trick in Houston among the oil men.

 

[Gray Pennell]

I think you can simply say the charge is per time not per distance. A jump whether 1 or 6 still takes the week. Its cheaper to buy one jump 6 than 6 jump one tickets if your the passager. But it totally sucks for the captain/owner because a single jump 6 cost 6 times more than a jump 1. How you fix that is up to you.

 

[rancke]

Well goodness, I don't know - why did Wal-mart do it? They certainly could have pulled in a lot more profit selling things at the prevailing rates rather than undercutting others - which has made THEIR rates the prevaling rates.

You're assuming that Wal-mart and Tukera are in similar positions on their respective markets for no other reason that I can see than that you assume they are. This is actually not the case as far as I can see. If you could find a real world transport firm that had operated for several centuries without actually driving out the competition (there are 12 other megacorporatkions and countless sector-wide, subsector-wide, and interface lines), you might have an analog that had some similarity to Tukera. As it is, you don't. So please try to answer my questions instead of assuming that there must be an answer if only you knew it.

I dunno, maybe 'cause it gives the competition an opening to survive? And therefore to compete for the speculative freight you want? You don't think big businesses do things to make things tough on competitors?

If they can, yes. But evidently they haven't been able to do so, since we know for a fact that there are 12 other megacorporations and countless lesser companies around.

"Fixed"? "Fixed" as in Tukera sets rates that kill their competition and leaves them to dominate the choice routes? I dind't think that was complicated. "Fixed" as in some authority declares a requirement? I didn't think I was making that argument. I was pretty sure my argument was that those "fixed" rates could as easily be the result of ruthless business decisions by big players as the result of government fiat.

Then they wouldn't be a flat rate per jump but per-parsec rates that undercut the rates that were profitable. And they wouldn't apply to free traders the way the rules claim they do.

That's nonsense. A jump-1 free trader's no competition on a jump-3 or jump-4 line. I think you know there's likely to be a range of companies between the 1-ship free trader and the bigger subsector-wides. THOSE could compete, if they could attract the loans and set rates that made the routes profitable. And, that's what a mega like Tukera would seek to prevent.

The problem with that is that ships are a lot more mobile than mom-and-pop stores. Tukera can certainly drive under a small competitor on a specific route by running at a loss along the same route. But at some point (presumably when said competitor has gone bankrupt) Tukera is going to have to increase their rates again and make some money. That is, after all, Tukera's purpose. And when they do, another competitor can move in and set up along the same route. Possibly one of the better capitalized lines.

Also, the per jump pricing wouldn't apply on any of the routes that Tukera had managed to secure, since at some point the shareholders are going to want to see a bit of profit rolling into the coffers. So even if the explanation worked, it wouldn't work.

Tukera can set its rates to "immunize" the jump-3 or jump-4 trade against businesses below a certain critical size, thereby assuring more business for itself, but that's not likely to impact Oberlindes.

So what is the point again?


Hans

 

[aramis]

Hans: You're right... Tukera vs upstarts is more akin to "BP after purchasing Boeing, plus United, Southwestern, and Alaska airlines, plus Alaska Seafood, Weyrhauser, and the Usibelli Coal mine" vs guys in Cessna 150's, rather than Walmart vs mom-n-pop stores.

By using subsidy routes and requiring the subsidy carriers to carry at whatever rate, they can simply short term undercut any upstart who cuts into their massively vertically integrated system of profit.

And, in a Bk2 driven universe, the guy in the 400Td J2 can't compete at Cr700/Td; he needs at least Cr900/Td to make it, more if he's armed. Moreover, the Tukera Subsidized guy probably has to, as part of his contract, use ONLY passage coupons, and not charge fees above that for food, non-intoxicant routine beverages, and basic entertainment. The Big 5000Td Tukera J2's can, if need be, chop down to Cr500 for a while, just to drive everyone else out of that market except the subbies. Not because the ship can operate at a profit that low, but because the losses can be made up elsewhere in the Tukera Network.

In the Bk5 universe, the J2 guy can't compete at all with the 20KTd haulers Tukera can afford to pay cash on. He can make it on spec, but hauling other people's property is only a way to fill holds you can't find stuff to purchase with potential gain. Thoe tukeras can haul J2 at