How to address the problem of the numbers

[salochin999]

Was there a set of trade route maps on the wiki? I have, alas, mislaid the link.

The pages for sectors (some at least) have a trade pdf which I assume comes from GURPS.

http://wiki.travellerrpg.com/Spinward_Marches_Sector

http://wiki.travellerrpg.com/images/2/2a/Spinward_Marches_Sector.pdf

The GURPS model does what you'd expect: assign a numeric trade value to a system, calculate a bilateral trade level between two systems and then subtract for distance.

The problem with it - if you want it to be consistent with Aramis' data - is that the distance cost isn't linear. There's a table of parsecs and a value to subtract.

0-1 parsecs, 0
2 parsecs, -0.5
3-5 parsecs, -1
6-9 pc, -1.5
etc

whereas Aramis' data implies -x per parsec (with an added penalty if the journey requires a J-2 or J-3).

Subsidized J2 or J3 routes don't make the operating costs less than a J1. They just bring the operating costs closer to a J1's and low enough for an operator to (just about) make an operating profit.

So if you wanted to use both Aramis' data and the part of GURPS that gives trade tonnage then all you need to do is make GURPS' distance modifier -x per parsec instead of using the table.

If x was high then you'd get clusters with lots of short distance trade and some long distance trade between the major hubs. If x was low then you'd get something part way between that and the GURPS trade map.

(A calculated rather than simply guessed value of x would depend on knowing what the average value of a ton of cargo in the OTU was.)

 

[Carlobrand]

...So if you wanted to use both Aramis' data and the part of GURPS that gives trade tonnage then all you need to do is make GURPS' distance modifier -x per parsec instead of using the table. ...

It's a bit more complicated than that. Remember that GURPS and CT have different price structures for trade. The cost to ship a ton of cargo one parsec in GURPS, assuming the sender is a company doing reasonable advance planning, is about 5% of the value of the cargo. (Cargo in GURPS has an average value of G$10,000.) The cost to ship a ton of cargo one parsec in CT is 20% of the value of the cargo.

In consequence, the only cargo that's worth shipping in CT is cargo that can take a 20% hike in its price (the added cost of the shipping) and still be sold profitably. In GURPS, cargo needs only remain profitable after a 5% hike in price. Ergo, more cargo ships in GURPS than in CT - assuming all other factors are equal.

I've been solving the equation by comparing shipping tonnage at points where the shipping costs are the same percentage of the value of cargo, which presumably means the same cargo can ship and be profitable, therefore the items and the tonnage should be the same if all other factors are equal. The point at which the shipping costs in GURPS, as a percentage of value, are about the same as in the CT universe for a CT ship going one parsec is when the GURPS ship is going 4 to 5 parsecs. In fact, after calculating for several ranges, I find its a good rule of thumb to simply subtract 1 from the BTN number to get what the trade would be in a CT setting - assuming all other factors are equal.

...(A calculated rather than simply guessed value of x would depend on knowing what the average value of a ton of cargo in the OTU was.)

Per Book 7, Merchant Prince, the "base market value" (what it sells for at the receiving end) of a ton of cargo is Cr5000. (Page 37)

Through the various posts, we basically have two different models:

Assuming all other factors are equal, which includes using the GURPS tables as they appear in GURPS, we end up with a CT universe with pretty much 1/10 the trade that is seen in the GURPS universe. I estimated 1600-1700 free traders, as many 4-600 dTonners, about 3100 large freighters of from 2000 dTons to maybe 10,000 dTons, and a bit less than a hundred megafreighters - but the megas are either TL15 or we're using 4 5000 dTonners for each "mega," depending on your preference. (That actually works since 3 of the 4 major trade routes where we might expect TL15 megafreighters are for TL15 worlds.) Total tonnage of ships around 10 to 20 million dTons.

If we assume the fleet is proportional to the shipping - i.e. the member worlds are paying for the fleet out of the taxes they gain from secure interstellar trade - then the fleet cannot easily match the description in MegaTraveller's Rebellion Sourcebook. Instead, it looks very much like the fleet described in CT's The Spinward Marches Campaign and the Fifth Frontier War game: 7 fleets instead of 12, each fleet consisting of about one dreadnought squadron and two cruiser squadrons, plus destroyers, escorts, scouts, and auxiliaries.

We do not have to assume the fleet is proportional to shipping. We can afford a Rebellion Sourcebook fleet if we don't make that assumption. In fact, after running a rough calculation based on Striker's numbers for calculating taxes going to the Imperial Navy, we could conceivable double or triple the size of that fleet. The tax burden of the Rebellion Sourcebook Imperial Navy is really quite light.

(Since Striker is a wargame and not canonized as a description of tax policy, we are under no obligation to accept Striker's taxation rates as written. On the other hand, if you want a huge fleet in your TU, there's your basis. The Striker tax rate is in fact rather modest.)

The other model is we make GURPS and CT shipping tonnage rates the same, so both universes have the same number of merchant ships plying the spaceways. This can be accomplished by giving a +1 boost to the GURPS population modifier table. The GURPS pop mod table starts at 0 - reasonably. Under that model, a little group of 50 people on one world shipping to a little group of 50 people on another world, with no other modifiers, engages in interstellar trade worth about 10% of their annual GWP. Curiously, as pop increases, trade as a percentage of GWP decreases; it only increases when it's your neighbor who's getting the higher pop or tech level. Anyway, bumping it up one would bump CT trade up to GURPS levels: it means, in the case of the two little colonies, we're now saying trade between them is equal to about 50% of their GWP: goods are coming in and going out with a value of about half the place's GWP. And again percentage decreases as the local pop increases.

Basically we'd be saying those 50 people aren't generally settlers turning their backs on the rest of the universe and trying to be self-sufficient - they're aggressively pushing out product and bringing in goods. We're saying that even though shipping cost more in CT, there's a more aggressive effort to engage in it which countered the restrictive effects of increased cost, a greater and perhaps more deliberate effort to identify and produce products suitable for interstellar trade. The smaller pop worlds are there because the bigger pop worlds put them there, encouraging colonization and settlement to gain offworld resources and to create markets for their goods.

This produces a CT universe that looks like the GURPS universe: about 16,000-17,000 free traders, as many 4-600 dTonners, about 31,000 large freighters of from 2000 dTons to maybe 10,000 dTons, and a bit less than a thousand megafreighters (again, either TL15 or equivalent tonnage in 5000 dTonners), with total tonnage of ships around 100 to 200 million dTons. Tax base from this level of shipping should pay for a Rebellion Sourcebook Imperial Navy without the worlds tapping their domestic revenues.

 

[rancke]

I wouldn't either but Aramis' figures show the J3 has double the cpp of a J1 so the operating cost would be 200% more expensive rather than 20%.

I thought that contradicted something I remembered Wil saying, so I went back and checked his figures:

Which gives us the following:

System	J1	J2	J3	J4	J5	J6
Bk2-81:	1.0	0.7	0.6	0.8	1.2	1.7
Bk2-77:	1.0	0.7	0.6	0.7	0.4	1.2
HG-TL15:	1	0.84	0.9	1.09	1.51	2.73
MGT:	1.00	1.00	1.20	1.60	2.70	13.70
GT Core	1	0.8	0.82	0.93	1.16	1.72
Bk2-77	1	1.32	1.89	2.77	2.22	7.29
Bk2-81	1	1.34	1.95	3.01	5.77	10.02
HG	1	1.69	2.7	4.36	7.57	16.38
MGT	1.00	2.00	3.50	6.30	13.60	82.40
GT Core	1	1.59	2.46	3.72	5.81	10.32

[tc=7]Minimums per parsec[/tc] [tc=7][/tc] [tc=7]Per Jump N[/tc]

It's close enough to be valid for Bk2-'81 universes as well... but not for Bk5 ones, and thus not T20, either. It's a bit short for Bk2-77 universes....

You are taking the per jump cost of J3 as the per parsec cost. What the figures show is that (under Book 2) J2 is 30% cheaper than J1 and J3 is 40% cheaper (more if there are any gaps that forces J1 traffic to detour). To jump three parsecs costs a J3 ship 1.9 times what it costs a J1 ship to jump one parsec. And as it costs a J1 ship 3 times that to jump three parsecs, the J3 ship is about 37% cheaper (slight difference between Bk2-77 and Bk2-81) across three parsecs than the J1 ship (also three times faster).

(The 20% more cost that I was remembering was for MgT).

That means that a single jump-1 back to a hub and transshipment to a J3 ship there MAY be economical. But usually a direct J2/J3 route will be cheaper.


Hans

 

[rancke]

A table that would be really useful is one that shows that given a profit margin of 6.25% (that's what you need to service your ship loan), you need a minimum base value of such-and-such to travel so-and-so many parsecs.


Hans

 

[aramis]

A table that would be really useful is one that shows that given a profit margin of 6.25% (that's what you need to service your ship loan), you need a minimum base value of such-and-such to travel so-and-so many parsecs.


Hans

Actually, you need more than that, as you have to pad for less than full loading, even on scheduled runs with factors in port. expect no more than 90% loading average, so 12% markup.

And then the expected ROI. 2.20^(1/480)= 1.0016439693391601, or 0.164% per month; lost in the rounding on load.




All my Bk2 and Bk5 figures include the loan cost of standard Traveller 40 year loans.

 

[rancke]

Actually, you need more than that, as you have to pad for less than full loading, even on scheduled runs with factors in port. expect no more than 90% loading average, so 12% markup.

Fair enough. That (90% loading average) is actually what I assumed when I did my own figuring.

And then the expected ROI. 2.20^(1/480)= 1.0016439693391601, or 0.164% per month; lost in the rounding on load.

ROI? Rate of inflation?

Anyway, why not round up to 12.5%? Nice easy number to work with.

All my Bk2 and Bk5 figures include the loan cost of standard Traveller 40 year loans.

I use 6.25% both for the bank loan and for the owner's investment (the 20% paid up front). I know the two figures strictly speaking shouldn't be the same, but it's much easier that way and it's close enough for government work.


Hans

 

[aramis]

Fair enough. That (90% loading average) is actually what I assumed when I did my own figuring.


ROI? Rate of inflation?

Anyway, why not round up to 12.5%? Nice easy number to work with.


I use 6.25% both for the bank loan and for the owner's investment (the 20% paid up front). I know the two figures strictly speaking shouldn't be the same, but it's much easier that way and it's close enough for government work.


Hans

ROI=Return on Investment. Standard accounting term.

The standard loans only work out to 1.5% APR... so, one should expect the same out of it again. the 3I apparently has incredibly low inflation, and should likewise have a similarly low expectation of profits for investments.

Government backed loans are often below market rates; usually about half, and expected ROI is usually less than the market loan rate... but for items with a 40-50 year service life, one expects to make back the ROI plus pay interest on the mortgage...

The actual vacancy is 11.11111% markup.

The book rate is far higher than that.

When I work out the basics, my suggested "basal" price is based upon the minimum +2σ, the mean +1σ, or the median +1σ, whichever is less; that works to put the price around KCr1 under Bk2-81

Here's a list of the stuff I have enough data points to do a basal rate per Jn upon:

System	J1	J2	J3	J4	J5	J6
Bk2-81	923.7	1,132.3	1,073.8	1,159.7	5,513.3	7,178.2
Bk2-77	923.7	1,579.4	5,209.3	4,113.9	12,028.9	17,545.6
HG-80 TL-9ABC	1,081	2,254	5,095
HG-80 TL-DE	965	1,907	3,928	11,798	13,323
HG-80 TL-F	852	1,583	2,738	7,512	7,247	40,564
MGT	557.49	1,144.30	2,293.28	4,601.63	29,865.15	44,858.83

Note that I chose the central +1σ as being a relatively large, commercially viable fleet, but these numbers also are based upon pure cargo budget boxes. Adding for a 8% markup brings Bk2 and TL13 HG to parity with book rate, but I've not done so. The basal rate was primarily to establish cost multipliers for Jn over the single parsec rate.

 

[salochin999]

That means that a single jump-1 back to a hub and transshipment to a J3 ship there MAY be economical. But usually a direct J2/J3 route will be cheaper.


Hans

From the table the cost ratios by jump N are (roughly)

1 : 1.4 : 1.8

(and in HG are (roughly) 1 : 1.8 : 2.7)

So *if* the carriers could charge more than 1000cr per ton per jump then a J2 or J3 could be cheaper per parsec.

But if they *can't* charge more (because the Book 2 rules say it's fixed at 1000cr per jump) then those routes wouldn't exist because J2 and J3 ships can't make a profit from freight at the canon price without a subsidy.

#

Like I keep saying, I'm operating on the canon version of the rules to see where it goes. This is probably where some of the confusion is coming from.

#

Obviously a 1000cr per parsec freight price (rather than per jump) makes more sense on the face of it so if you wanted to keep the canon price - even as an exercise - then a logical explanation would have to be dreamed up to explain why the canon price goes so explicitly against supply and demand. My first thought is a law and a law requires an incentive on the part of the people making the law.

Working backwards the effect of such a law would be to force J3 trade into Imperium subsidized merchant ships along Imperium specified routes.

I can think of a bunch of reasons they might want to do that especially in a frontier region.

#

Again, I'm not saying this makes the most sense. I'm saying this could be used to make sense of the rules as written.

#

Anyway either way you do it - canon price or charging per parsec - you can create a distance modifier that can be plugged into a GURPS-like model.

1) strictly canon version: distance modifier
-x per J1 jump
-x per J2 jump (if subsidized) (-1.4x if not subsidized)
-x per J3 jump) (if subsidized) (-1.8x if not subsidized)

(however only where someone thinks a route is worth subsidizing) (edit: actually the unsubsidized cost could perhaps be used to decide if the route was worth subsidizing or not i.e. if the unsubsidized distance cost brought the BTN below 0 you could take that as the route not being worth subsidizing)

2) charging per parsec: distance modifier
J1 ship: -x per J1 jump
J2 ship: -0.7x per J2 jump (or -1.4x for a single parsec)
J3 ship: -0.6x per J3 jump (or -1.8x over a single parsec and -1.2x over two parsecs)

(so ignoring trans shipment costs the lowest cost would be using a J3 where a three parsec jump was possible, if not then a J2 where a two parsec jump was possible, if not then a J1.)

 

[rancke]

From the table the cost ratios by jump N are (roughly)

1 : 1.4 : 1.8

(and in HG are (roughly) 1 : 1.8 : 2.7)

So *if* the carriers could charge more than 1000cr per ton per jump then a J2 or J3 could be cheaper per parsec.

You were talking about the cost to the ship to carry goods, not what they were allowed to charge. And if it actually did cost twice as much to ship goods by J3 than by J1, it would make sense to ship by J1 instead of by J3. But it is, in fact, cheaper to ship by J3. That the ship isn't allowed to charge what it costs doesn't affect that.

But if they *can't* charge more (because the Book 2 rules say it's fixed at 1000cr per jump) then those routes wouldn't exist because J2 and J3 ships can't make a profit from freight at the canon price without a subsidy.

There's a very easy workaround (which I've already mentioned once): A holding company, a subsidiary import/export company at each end of the route, and a subsidiary shipping company. The shipping line carries the goods at the mandated cost. As a result, the import/export companies gets the 30% saving in transportation costs, thus increasing the profit paid to the holding company. The holding company company in turn covers the shipping line's losses.

Like I keep saying, I'm operating on the canon version of the rules to see where it goes. This is probably where some of the confusion is coming from.

Well, the canon version has two possible interpretations: Either the fixed shipping costs are an actual setting feature or it's a game artifact. Without any further information there's no telling which one is the right one.

Only, we do have further information. We have canonical instances of NPCs trying to get the PCs to give them a discount and offering to pay them a premium. This contradicts one interpretation of the rules but not the other. So the interpretation that is contradicted by other canon must be the wrong one.

However, that is a side issue, because even when going by the first interpretation, regular companies can circumvent the regulation. Free traders can't, which may even be a semi-plausible explanation for the regulation, but that won't affect the regular trade. So if you want to use the wrong interpretation, I'll go along (in this thread).


Hans

 

[salochin999]

then all you need to do is make GURPS' distance modifier -x per parsec instead of using the table. ...

It's a bit more complicated than that. Remember that GURPS and CT have different price structures for trade. The cost to ship a ton of cargo one parsec in GURPS, assuming the sender is a company doing reasonable advance planning, is about 5% of the value of the cargo. (Cargo in GURPS has an average value of G$10,000.) The cost to ship a ton of cargo one parsec in CT is 20% of the value of the cargo.

Yes, hence the -x, figuring out the x is the next thing.

Per Book 7, Merchant Prince, the "base market value" (what it sells for at the receiving end) of a ton of cargo is Cr5000. (Page 37)

Ah good, 5000cr is the number I've been using - as it was mentioned on one of these threads - but I didn't know where it came from.

This is why - given the CT cargo charges - it seemed to me the cluster trade model made the most sense. Average cargo isn't going to be transported far so most trade (by volume) will be short distance.

#

Through the various posts, we basically have two different models:

Assuming all other factors are equal, which includes using the GURPS tables as they appear in GURPS, we end up with a CT universe with pretty much 1/10 the trade that is seen in the GURPS universe.

Yes, I think that is more or less dictated by the distance modifiers except I think there the possibility of a distinction between trade by volume and trade by value i.e. it might be 1/10 by volume but not necessarily by value.

The distance modifiers (imo) dictate that average value goods only go short distances which would make the *volume* of average value trade concentrated in the clusters. However if by definition long distance trade will only involve high value commodities then the trade "value" may still be high so it seems to me if you're using GURPS then even if you reduce the merchant fleet tonnage by x% you don't necessarily need to reduce the trade value by x%.

Example:
If a system produced 100k tons of 5k value cargo, and 5K tons of 100k value then after a few parsecs the average value cargo would drop off so a drop of 90%+ in volume but only 50% in value.

I estimated 1600-1700 free traders, as many 4-600 dTonners, about 3100 large freighters of from 2000 dTons to maybe 10,000 dTons, and a bit less than a hundred megafreighters - but the megas are either TL15 or we're using 4 5000 dTonners for each "mega," depending on your preference. (That actually works since 3 of the 4 major trade routes where we might expect TL15 megafreighters are for TL15 worlds.) Total tonnage of ships around 10 to 20 million dTons.

That sounds good to me especially if - using the fixed cargo price rule -the bulk of the bigger ships are concentrated in the clusters and subsidized trade routes so you have some systems with a lot of ships and some with very few.

Was your calculation based on a 1000cr fixed price or a 1000cr per parsec?

If we assume the fleet is proportional to the shipping - i.e. the member worlds are paying for the fleet out of the taxes they gain from secure interstellar trade - then the fleet cannot easily match the description in MegaTraveller's Rebellion Sourcebook. Instead, it looks very much like the fleet described in CT's The Spinward Marches Campaign and the Fifth Frontier War game: 7 fleets instead of 12, each fleet consisting of about one dreadnought squadron and two cruiser squadrons, plus destroyers, escorts, scouts, and auxiliaries.

Saving for reference.

We do not have to assume the fleet is proportional to shipping. We can afford a Rebellion Sourcebook fleet if we don't make that assumption. In fact, after running a rough calculation based on Striker's numbers for calculating taxes going to the Imperial Navy, we could conceivable double or triple the size of that fleet. The tax burden of the Rebellion Sourcebook Imperial Navy is really quite light.

Yes, I was thinking if the clusters raised x tax and handed a proportion to the Imperium then the clusters could each build a fleet for their own sub-sector with enough over for the Imperium to build more for the frontier, reserves, reinforcement etc - which given Spinward is the frontier might make sense of the numbers.

(Since Striker is a wargame and not canonized as a description of tax policy, we are under no obligation to accept Striker's taxation rates as written. On the other hand, if you want a huge fleet in your TU, there's your basis. The Striker tax rate is in fact rather modest.)

Yes

The other model is we make GURPS and CT shipping tonnage rates the same, so both universes have the same number of merchant ships plying the spaceways.

Yes, if the distance costs are higher and you want GURPS level trade then you need to make the base trade potential higher to compensate.

I prefer the first as it leaves plenty of backwater space for Free Traders and Firefly but still has the Coruscants in the clusters and it fits the Traveller stuff I've read in the past but that's a long way from all of it. (edit: I mean I haven't read all of it so there may be contradictions.)

 

[salochin999]

You were talking about the cost to the ship to carry goods, not what they were allowed to charge.

Quite possible. There's the operator's costs and the shipper's costs and it is easy to get them jumbled up.

And if it actually did cost twice as much to ship goods by J3 than by J1, it would make sense to ship by J1 instead of by J3. But it is, in fact, cheaper to ship by J3. That the ship isn't allowed to charge what it costs doesn't affect that.

True but I do keep saying what my premise is - CT including the bits that don't make sense to see what comes out of it.

(Also J3 is only cheaper when it can make a full three parsec jump. A J1 over one parsec is cheaper.)

There's a very easy workaround

I'm sure there's hundreds. One of the reasons I like the idea of a legally mandated fixed price is it creates lots of opportunities for criminality.

Well, the canon version has two possible interpretations: Either the fixed shipping costs are an actual setting feature or it's a game artifact. Without any further information there's no telling which one is the right one.

Correct. I think it's an artifact which can be turned into a setting feature.

So if you want to use the wrong interpretation, I'll go along (in this thread).

The main point is the same either way. A GURPS style distance modifier - at least the ratios of one - can be worked out using the CT cost ratios (whether it's the ratios using 1000cr per jump or 1000cr per parsec or operating cost + %age per parsec.)

 

[rancke]

These ideas are a little inchoate due to being very recent. Please bear with me.

It occurs to me that base value is only one factor in determining how far a luxury trade item can travel. I don't know quite what to call the other, Profit Potential or Resale Value perhaps. It's how much you can expect to sell the goods for, and for luxury items I think it can be a lot more than the +300% the Merchant Game allows for.

I googled cigar prices and came across a humidor containing 48 cigars that cost $3,750. Call it Cr1000. Assuming 2 cm added to all dimensions for packaging, you can get 625 of them in a dT (635, actually, but I rounded down a bit). That's a base value of Cr625,000. You can get quite a ways with that just on a 300% markup. The 300 parsecs (?) from Terra to Regina would only add Cr300,000 (or half that in actual transportation costs), or less than 50% (or 25%).

The big unknown factor is the number of middlemen and how much each middleman adds to the cost. ISTR reading somewhere that each link in the chain can double the cost of something. If this is true then two middlemen is enough to quadruple the cost of these humidors, which would result in our +300% markup.

This sounds rather a lot. Perhaps I'm misremembering? Anyway, I think it is necessary to come up with a figure for how far a shipment (of luxury goods) is likely to travel between middlemen and how much each middleman adds to the cost. If, for example, 50 parsecs was the limit, we'd have five middlemen between Terra and Regina.

Anyway, what I was going to say, why assume that a 300% markup is the maximum possible? Why wouldn't a millionaire (or at least a ten-millionaire) on Regina be willing to pay Cr10,000 or Cr20,000 for a genuine, certified Terran humidor comtaining Terran cigars? And Regina has a lot of millionaires.


Hans

 

[salochin999]

These ideas are a little inchoate due to being very recent. Please bear with me.

It occurs to me that base value is only one factor in determining how far a luxury trade item can travel. I don't know quite what to call the other, Profit Potential or Resale Value perhaps. It's how much you can expect to sell the goods for, and for luxury items I think it can be a lot more than the +300% the Merchant Game allows for.

I googled cigar prices and came across a humidor containing 48 cigars that cost $3,750. Call it Cr1000. Assuming 2 cm added to all dimensions for packaging, you can get 625 of them in a dT (635, actually, but I rounded down a bit). That's a base value of Cr625,000. You can get quite a ways with that just on a 300% markup. The 300 parsecs (?) from Terra to Regina would only add Cr300,000 (or half that in actual transportation costs), or less than 50% (or 25%).

The big unknown factor is the number of middlemen and how much each middleman adds to the cost. ISTR reading somewhere that each link in the chain can double the cost of something. If this is true then two middlemen is enough to quadruple the cost of these humidors, which would result in our +300% markup.

This sounds rather a lot. Perhaps I'm misremembering? Anyway, I think it is necessary to come up with a figure for how far a shipment (of luxury goods) is likely to travel between middlemen and how much each middleman adds to the cost. If, for example, 50 parsecs was the limit, we'd have five middlemen between Terra and Regina.

Anyway, what I was going to say, why assume that a 300% markup is the maximum possible? Why wouldn't a millionaire (or at least a ten-millionaire) on Regina be willing to pay Cr10,000 or Cr20,000 for a genuine, certified Terran humidor comtaining Terran cigars? And Regina has a lot of millionaires.


Hans

I think the price for commodities like Terran cigars would be the opposite of the regular model i.e. increase with distance (as a proxy for rarity) rather than decrease e.g. +x% per parsec or something.

(or +x% per parsec but only at rich or hi population worlds)

 

[rancke]

I think the price for commodities like Terran cigars would be the opposite of the regular model i.e. increase with distance (as a proxy for rarity) rather than decrease e.g. +x% per parsec or something.

(or +x% per parsec but only at rich or hi population worlds)

But long-distance trade will be almost exclusively of this kind. Anything that can be gotten from somewhere closer will be gotten from somewhere closer, so goods from far away are practically per definition luxury goods. Luxury goods that can't be gotten from anywhere closer.

So beyond a certain, fairly limited, range the regular model doesn't apply.

Another factor that doesn't fit into the regular model is whether you have a monopoly or virtual monopoly. If multiple companies carry quillnips to Efate, you're limited to the regular model: purchase price plus transportation costs plus a modest profit. But if you're the only one carrying quillnips to Rhylanor, you can charge purchase price plus transportation plus any profit the market will bear. And if rivals start carrying quillnips to Rhylanor too, it may be worth while to carry yours to Mora. (Or the others may bypass Rhylanor and go straight to Mora).

Of course, that would depend on whether the people on Mora like quillnips, another factor that the regular model doesn't take into account.


Hans

 

[tjoneslo]

After following this debate for several days I think I've come to the conclusion there really are two kinds (maybe three depending) of trade running through the Imperium.

Type one is the demand trade, or what salochin999 is calling hub-hinterland trade (I think). It tends to be short distance (one, maybe two jumps, maximum of J6). This would be the modern trade system we all use today. Merchant on planet A sends a message to supplier on planet B, ordering a supply of widgets. Supplier packs the order in a crate, crate is put on a merchant ship and sent to planet B for the merchant. This is very low risk to everyone involved, prices are known and agreed upon in advance. It would be easy to see, under this system, that a corporation operating on both worlds may have the pull to set the shipping costs between them at a level no independent contractor could cover costs, let alone make a profit. And the corporation subsidize their shipping costs through markup on the shipped items.

I do recall Loren Wiseman once remarking that the designers at GDW had run the numbers on the trade system as written in Book 3, and considered the outcome that you couldn't cover your costs a feature. The lack of funding would force the players to consider alternatives (i.e. adventures).

Type two would be speculative trade. This is what salochin999 is calling hub-hub trade (sort of). This is modeled after the East India tea/china trade. And it carries a higher risk associated with it. Here the shipper on planet B packs a crate with widgets and sells it to a ship captain. The captain knows there is a market for widgets on planet A, and is speculating that he can get a price which will cover his purchase and shipping. Note under this system it is difficult to enforce a fixed shipping cost.

For the Terra-Regina cigar trade, it is unlikely the initial shipment was 1 DTon of humidors. It was more likely 5 to 10 dtons. At each of the middlemen stops along the way, the merchant opens one dton of humidors, sells them locally at a nice markup. The remainder he sells as a speculative trade lot to the next middleman down the line.

I think its possible to argue the markup on the Terran cigars on Regina could be anywhere from simple shipping costs to some significant multiple. IIRC using Book 7 and a Broker-2, the average sale price comes out being 120%. And now you need to calculate how many brokers it goes through to compound the 120% price increases.

And the Type three trade is speculative cargo trade. This is where the ship captain buys a lot of cargo, usually something high value and bought at a steep discount, with no idea where it would be sold. It sits in the cargo hold until they manage to find a broker (sucker) to sell the cargo at the +300% markup. This kind of trade really can't be modeled, but does need to be considered. I think the rule for this would be that a trade on a world can not involve more than fraction (e.g. 0.1%) of the world GDP, there simply isn't the free cash available. It is possible for a referee to violate this rule, with the understanding the player know this is an adventure hook.

 

[Aramais]

These ideas are a little inchoate due to being very recent. Please bear with me.

It occurs to me that base value is only one factor in determining how far a luxury trade item can travel. I don't know quite what to call the other, Profit Potential or Resale Value perhaps. It's how much you can expect to sell the goods for, and for luxury items I think it can be a lot more than the +300% the Merchant Game allows for.

I googled cigar prices and came across a humidor containing 48 cigars that cost $3,750. Call it Cr1000. Assuming 2 cm added to all dimensions for packaging, you can get 625 of them in a dT (635, actually, but I rounded down a bit). That's a base value of Cr625,000. You can get quite a ways with that just on a 300% markup. The 300 parsecs (?) from Terra to Regina would only add Cr300,000 (or half that in actual transportation costs), or less than 50% (or 25%).

The big unknown factor is the number of middlemen and how much each middleman adds to the cost. ISTR reading somewhere that each link in the chain can double the cost of something. If this is true then two middlemen is enough to quadruple the cost of these humidors, which would result in our +300% markup.

This sounds rather a lot. Perhaps I'm misremembering? Anyway, I think it is necessary to come up with a figure for how far a shipment (of luxury goods) is likely to travel between middlemen and how much each middleman adds to the cost. If, for example, 50 parsecs was the limit, we'd have five middlemen between Terra and Regina.

Anyway, what I was going to say, why assume that a 300% markup is the maximum possible? Why wouldn't a millionaire (or at least a ten-millionaire) on Regina be willing to pay Cr10,000 or Cr20,000 for a genuine, certified Terran humidor comtaining Terran cigars? And Regina has a lot of millionaires.


Hans

YES! This is what I have been trying to point out, more or less!

LUXURY goods.

As I see it, my hypothetical shipment of cigars starts as, say, 100 1-ton cargo containers, or 100 3-ton containers if you want to stick to T5...no, I am not slavish to the rules set.

In any event, the whole 100 containers go out to point A, get broken down to two ships with 50 containers each, and so on, and so on.

Eventually, JUST ONE cargo container gets to Regina.

One humidor full goes for 1/625th of the cost of shipping...plus a profit margin.

I didn't do the math, so I won't agree that Hans is spot on at Cr 10-20,000 by the time we get to Regina....but that's not a bad price to consider.

Sure the ones grown in that greenhouse on Regina are MUCH less expensive, CR 50, and even the ones smuggled off that Red Zone agro world are only CR 500 for the same amount...but dammit, these came ALL THE WAY from Sol! Of COURSE we buy them to impress Norris.

Hans, excellent work...sincerely.

Greg Lee

 

[salochin999]

But long-distance trade will be almost exclusively of this kind. Anything that can be gotten from somewhere closer will be gotten from somewhere closer, so goods from far away are practically per definition luxury goods. Luxury goods that can't be gotten from anywhere closer.

So beyond a certain, fairly limited, range the regular model doesn't apply.

The regular model (potential profit margin - shipping costs) applies at all ranges.

The cut off point in this particular case is low because the shipping costs are so high in proportion to the value of the goods.

Using some Book 2 commodity prices as an example at 1000cr a jump Gems (base value 1MCr) can be profitably transported a very long way while Tools (base value 10K) can't be but if the base value of tools was higher or the shipping cost lower then they could be shipped further.


So the regular model is: some function of base value *minus* some function of distance i.e.

profitable trading range = f(base value) - f(distance)

The "Terran cigar" model is *plus* distance

profitable trading range = f(base value) + f(distance)

The key difference is the minus/plus.

 

[Aramais]

The regular model (potential profit margin - shipping costs) applies at all ranges.

The cut off point in this particular case is low because the shipping costs are so high in proportion to the value of the goods.

Using some Book 2 commodity prices as an example at 1000cr a jump Gems (base value 1MCr) can be profitably transported a very long way while Tools (base value 10K) can't be but if the base value of tools was higher or the shipping cost lower then they could be shipped further.


So the regular model is: some function of base value *minus* some function of distance i.e.

profitable trading range = f(base value) - f(distance)

The "Terran cigar" model is *plus* distance

profitable trading range = f(base value) + f(distance)

The key difference is the minus/plus.

In addition, addressing a point that keeps coming up, and has been beaten almost to death, IMHO the contract rates for moving freight should not be seen as a mandate from the Imperium itself. It's not law. It's a fair estimate and was (as someone pointed out) SPECIFICALLY set up to encourage traders to take some risks by keeping them at the edges. I would look at them as approximations, and possibly monopolistic behavior by the various shipping concerns.

I would also consider them to be aimed at small independents -- "We need them, but one of these days we won't, because we'll eventually get enough ships in to handle the all the trade. So let's keep them hungry until we can afford to put a regular run in their place." This is exactly why larger concerns CAN survive -- they have economics of scale on their side. The freight rate for a Type A2 is not necessarily the rate for Sharurshid, or better still a company that owns its own ships.

The object of this IS INDEED to crunch the players into taking risky charters and dishonest work...which should always help pay the bills. I suppose that means I consider it game artifact.

Non-standard trade comes under the heading "risky charters and dishonest work."

 

[salochin999]

After following this debate for several days I think I've come to the conclusion there really are two kinds (maybe three depending) of trade running through the Imperium.

Type one is the demand trade, or what salochin999 is calling hub-hinterland trade (I think). It tends to be short distance (one, maybe two jumps, maximum of J6). This would be the modern trade system we all use today. Merchant on planet A sends a message to supplier on planet B, ordering a supply of widgets. Supplier packs the order in a crate, crate is put on a merchant ship and sent to planet B for the merchant. This is very low risk to everyone involved, prices are known and agreed upon in advance. It would be easy to see, under this system, that a corporation operating on both worlds may have the pull to set the shipping costs between them at a level no independent contractor could cover costs, let alone make a profit. And the corporation subsidize their shipping costs through markup on the shipped items.

Type two would be speculative trade. This is what salochin999 is calling hub-hub trade (sort of). This is modeled after the East India tea/china trade. And it carries a higher risk associated with it. Here the shipper on planet B packs a crate with widgets and sells it to a ship captain. The captain knows there is a market for widgets on planet A, and is speculating that he can get a price which will cover his purchase and shipping. Note under this system it is difficult to enforce a fixed shipping cost.

I think the distinction is mostly related to the thing you mention: risk.

In the short distance demand trade (hub-hinterland) the person ordering the goods only has to guess what the demand will be in for example two months time - the time it will take to send the order and get the goods back.

In the longer distance version the person ordering the goods might have to guess what the demand will be in two years time.

So the longer the communication time the more risk of guessing wrong.

Say a buyer has had a demand in previous years for between 8-12 tons of computer parts do they order 8, 10 or 12 tons for the next? if they were only two months away from a supplier they could order four tons at a time and see how it works out but if they were two years away there would be more risk of guessing wrong so they might play safe and just order 8 tons.

So I think another way of describing demand trade is safe trade and a safe version of long distance demand trade might mean always ordering the low end of the demand range.

So another way of putting it might be if a buyer has a demand range of 8-12 tons a year then
- if the supplier is a short time away the buyer orders 8-12 tons
- if the supplier is a long time away the buyer orders 8 tons just to be safe

and what this might do is create two markets: a safe 8 ton market and a speculative 4 ton market.

Type two would be speculative trade. This is what salochin999 is calling hub-hub trade (sort of).

So I agree type two is speculative but I think the difference between hub-hinterland and hub-hub is the *proportion* of safe to speculative.

So something like:
hub-hinterland: 95% safe demand trade, 5% speculative
hub-hub: 80% safe demand trade, 20% speculative

(A general formula might be that the proportions change by 10% per three months of time distance or something like that.)

And the Type three trade is speculative cargo trade. This is where the ship captain buys a lot of cargo, usually something high value and bought at a steep discount, with no idea where it would be sold.

I'm thinking there would be two kinds of speculative.

The first kind would be the speculative long distance trade to *major* worlds with a high value cargo like you describe. The trader can't know what the demand will be for the cargo when they arrive but if they pick major worlds it is more likely that there will be a demand when they get there and if they only take high value goods then at least that will minimize the transport costs as a proportion.

Items like Terran cigars might be a special case of this if some demand on a major world is always likely and the value increases with distance to cover the costs.

The second kind of speculative fits the tramp Free Trader model. If you have a collection of systems with a very low *safe* portion of trade, for example 8 systems with a demand for 0-2 tons of computer parts each a year and a total range of 4-16 tons then the total safe demand might be too low to fill the hold of a regular ship and too variable to pay the bills of a regular ship.

Perfect for tramp steamers.

This kind of trade really can't be modeled, but does need to be considered. I think the rule for this would be that a trade on a world can not involve more than fraction (e.g. 0.1%) of the world GDP, there simply isn't the free cash available.

Yes, that's the big flaw in it currently. I think the idea of a Free Trader buying 20 tons of computer parts in one place and then selling them to other systems at 1-2 tons a time makes sense but not selling all 20 tons at 300% at a backwater planet.

#

Conclusion

So I'd re-arrange your categories a bit into safe vs speculative and short distance vs long distance so you get four combinations

Type 1) safe short distance (demand driven)
average and high value goods
small and large cargo sizes

Type 2) speculative short distance (tramp model)
average and high value goods
only small cargo sizes*

Type 3) safe long distance (demand driven)
only high value goods**
small cargo sizes**

Type 4) speculative long distance (spice trade)
only high value goods**
small cargo size**
only major worlds***

(*due to low volume of demand)
(**due to transport costs)
(***due to risk)

The categories of space could then be defined by the proportions of each category of trade e.g.

1) boonies trade
20% Type 1, 80% Type 2

2) hub-hinterland trade
90% Type 1, 10% Type 2

3) hub-hub trade
80% Type 3, 20% Type 4


TL;DR

yeah i know

 

[salochin999]

In addition, addressing a point that keeps coming up, and has been beaten almost to death, IMHO the contract rates for moving freight should not be seen as a mandate from the Imperium itself.

If you want to create a clear picture of how trade works then that is probably the first decision you need to make.

If the shipping costs were changed the Book 2 Free Traders and subsidized merchants would still make sense - for people like me who want the Book 2 ships to work in the OTU - because although type Ms and Rs would now be easily profitable if full they'd still be needed in areas of space where the volume of trade is too low to keep them full.

The ratio of distance cost modifiers using variable cargo pricing would be something close to:
J1 -x per jump
J2 -1.4x per jump
J3 -1.8x per jump
so with a GURPS-like system you could calculate the drop in trade by distance the same way.

If you used the current GURPS BTN numbers but replace the distance modifier with one calculated this way with say x = 0.5 then the GURPS trade would compress to a mostly hub-hinterland and hub-hub pattern.

#

edit

nb those three numbers might not be the best possible fit btw but they're in the ball park.