Starship Economics Broken As Well...

[tbeard1999]

I decided to tackle something besides the T/E and initiative mechanics, so I reviewed starship economics in MGT. I'm sure that y'all will be as shocked as I was when you hear that they are badly broken as well.

<sigh>

1. No assumed interest rate and loan term is given for starship loans. If we assume 40 years (per CT), then the "minimum payment" rule seems broken. MGT states that the minimum monthly payment is 0.02% of original loan amount per month. This works out to an interest rate of <1% for a 40 year loan. This seems staggeringly low; given the amount of risk inherent in starship operations, I'd imagine that the minimum interest rate should be 5%. That would work out to a minimum monthly payment (40 year loan) of 0.48% per month.

2. Also, the ship shares system seems overly fussy. With millions of loan payment calculators available online, is it really such an ordeal to define reasonable starship financing guidelines? Do we really need this system? Wouldn't it be better to simply lay out the costs and financing terms? Shouldn't that data be included even if the starship shares system is kept?

I bring this up is because the value placed on old ships would have a profound effect on the interest rate charged by banks. The higher the depreciation rate, the higher the interest rate charged. In other words, the more resale value, the lower the interest rate.

And unfortunately, the starship shares rules make it hard to determine resale value. The Old Starships rule is especially illogical. Essentially, a ship declines by about Mcr2.0 per decade of wear (average of 2 shares per decade). This system results in larger ships having a far longer useful life than smaller ships. An absurd notion, since the systems comprising such ships are the same. A more rational system would reduce the value of starships proportionately.

Taken at face value, the Old Starships rule means that a MCr39.0 free trader would lose half its value in 100 years (10 decades x MCr 2.0), while a MCr108 fat trader would lose half its value in about 250 years. Both numbers seem absurdly high to me, and I don't think that the designer intended for fat traders to have 2.5 times the useful life of Free Traders. A MCr1000 bulk trader would lose half its value in 2500 years!

3. The system for generating passengers and cargo is badly broken (unless of course, we want all ships to be running multi-million credit losses annually). In the MGT universe, I want to be in the starship repo business. With the current economic system, there will be plenty of defaults.

On an unmodified passenger roll, a ship will average 7 low passengers, 3.5 middle passengers and 0.5 high passage passengers. On an unmodified cargo roll, a ship will average 56 tons of cargo.

I ran a spreadsheet on the humble Fat Trader and discovered that these numbers will result in it losing about Cr246,612 per month. Assuming a +3 modifier to the roll (pretty much an "extremely good case" scenario), the Fat Trader loses Cr128,612 per month.

The system for rolling for cargos and passenger--an unfortunate legacy from Classic Traveller--is fundamentally flawed. The problem with it is that it generates a fixed amount of cargo/passengers. This makes ships with small cargo capacities able to easily fill their holds with cargo/passengers and makes it impossible for ships with large cargo capacities to do so.

A more logical system would generate cargo and passengers on a percentage basis.

So once again, I find myself asking the question "what is the designer smoking and can I get some?" Note that he completely changed the CT starship economics. But the result is a system every bit as defective as CT's system, if not moreso. You know, someone should tell him that you should only change something if you can improve it. At least the CT system is broken in a familiar way.

Cripes!

And despite the fact that I think that these issues should have been resolved by the designer, here are some suggestions:

1. Ditch the starship shares. They are a needless gloss on a pretty straightforward calculation.

2. Ditch the illogical cargo and passenger generation system since it is unresponsive to ship size and will make it too easy for small ships to carry a full hold and impossible for larger ones to do so.

3. Base travel/cargo shipment prices on the costs of shipping, rather than some arbitrary amount like "cr5,000 per parsec."

Of course, it would have been better if this had been resolved earlier. A week before publication doesn't give a whole lotta time.

 

[robject]

Thanks for posting a summary. Now I can chatter mindlessly without having to read the playtest

Sounds like the interest calculation is flat "wrong".

I still like the ship shares system. But, I'll have to think about it more.

Now, the Old Starships rule definitely needs to be tweaked. Ok, replaced. Ships just don't last more than a century...

Sounds like the passenger & freight rules need relaxing, too, eh? 2D low passengers on the average, 1D middle, 1/2 high, eh? Well, perhaps a fix would be to bump that up a bit closer to CT numbers on the average.

(And I'd not use a Fat Trader as an example; those things are subsidized for a reason. But even so, the numbers seem low.)

The system for rolling for cargos and passenger--an unfortunate legacy from Classic Traveller--is fundamentally flawed. The problem with it is that it generates a fixed amount of cargo/passengers. This makes ships with small cargo capacities able to easily fill their holds with cargo/passengers and makes it impossible for ships with large cargo capacities to do so.

A more logical system would generate cargo and passengers on a percentage basis.

Ah. Well, I think there are implicit assumptions built into CT, one of which is that independently operated ships are at least one of:

(1) small
(2) niche
(3) subsidized

Percentage basis is, IMO, more flawed than the current model, at least given the underlying assumption about interstellar travel being rather uncommon, and interstellar travel by people of independent means who choose tramp traders rather than corporate liners being even more quirky (read: plot hook) and even more uncommon.

Under CT, small ships could fill their cargo hold, and staterooms, too. The Fat Trader had to find a more specialized route to make money. Above that merchant ships had to be "subsidized", which is a code word for "they're getting their money some other way", and by then you've got one foot in a corporate/government entanglement. By the time you've hit 1,000 - 2,000 - 3,000+ ton liners and freighters, you're in corporate territory, and they make money in Byzantine ways: corporate accounts, travel slots paid for by megacorps, government-reserved seating, it's taxpayer dollars, baby!

Actually, I wish we had rules for that!

3. Base travel/cargo shipment prices on the costs of shipping, rather than some arbitrary amount like "cr5,000 per parsec."

I don't mind a flat rate for freight, and even for passengers (I still prefer per-jump pricing). What I do mind is a flat base price for speculative trade -- I want what Aramis wants, a base price dependent on distinct cargo types.

Hmmm, that gives me an idea.

Of course, it would have been better if this had been resolved earlier. A week before publication doesn't give a whole lotta time.

Yeah, I'd like to have more time to think about it.

 

[aramis]

Sorry, Ty, but a more logical system would not be based at all upon the ship, but solely upon the tradeflows of the two systems and all their trade partners. But such a system also requires knowing how much competition is present, and a host of other details. Details that are beyond the pale for an RPG.

So instead we tie available passengers to a first order major variable for the above: population of the world.

That is a viable simplification. It was used in CT Bk2 & 5, MT, TNE, T4, T20, and GT (but not GTFT).

Freight as well was handled the same way (with minor variations) in CT, MT, TNE, T4, and GT; T20 uses a significant variation, and GTFT uses a different basis.

Speculative goods under CT Bk2 & T20 are not limited by population; that's an error on their part; both are limited by the ship. Note that T20 allows for several lots, and purchase of one or all of them, while CT can be construed to mean either one lot per ship or one per crewman blowing the week on finding spec goods...
Under MT, TNE, and T4, they are limited by population, again, a first order approximation.
GTFT uses (again) a basis of their trade model.

A far better solution, also a first order approximation, but a better one, is to use a formula like Sqrt(Pop*TL) as a production index, and using that as a basis for generating lost size values.

 

[far-trader]

Gotta agree with aramis on this pretty much. All I'd add is that TL does factor a bit into the trade models in (most of?) the rules mentioned, in a fashion similar to his suggested for a production index.

Still I don't see it as a good thing (the TL tie in favoring). Sure high TL may produce more goods, but low TL will provide more raw material. Seems like the two would balance by lots (though not by volume - raw material is always going to be larger and not by value except perhaps by lot size - goods will have more value than materials for the same volume)...

...but I'm getting off topic I guess

Anyway, what's needed is a trade system that's simple but means you find raw materials of large volume and low cost on source worlds, and manufactured goods of small volume and high cost on production worlds.

 

[aramis]

TL in the extant systems does NOT work the way my suggestion does.

TL is a power multiplier. A low TL resource world can only produce a few hundred KG/week/worker. A high TL resource world can produce lierally tons per week per worker, simply due to the tools available. It matters little whether that work is raw resources, fruit, or HP7000's... aside from the exact scale of the lots.

Now the other issue is that, realisitcally, the bigger the population the lower the percentage who will want/need to get off world... since the larger the population, the more services the population can support internally. At TL 7+, nowhere on world is more than a week's travel away...and that travel will probably cost far less than a starship passage.

 

[tbeard1999]

Sorry, Ty, but a more logical system would not be based at all upon the ship, but solely upon the tradeflows of the two systems and all their trade partners. But such a system also requires knowing how much competition is present, and a host of other details. Details that are beyond the pale for an RPG.

At the end of the day, minimum shipping prices will be largely determined by the costs of actually moving the product. No matter what these other variables are, no ship operator can operate at a loss for very long. And in an RPG context, the most important consideration is that the economic system yields reasonable results -- i.e., it's possible to operate a ship at a reasonably profitable level, but not too easy to get rich.

EDIT to clarify:

Now, three main factors will tend to increase prices temporarily: increased demand, decreased transport supply, and/or increased risk. If demand increases, prices will go up, then come back down as more operators step in to get a piece of the action and fulfill the demand. If the supply of available transport is decreased, prices will go up, which will encourage more operators to step in, thereby lowering prices. Increased risk will generally keep prices up until the risk is decreased.

Now, three main factors will tend to decrease prices temporarily: decreased demand, increased transport supply, and/or decreased risk. If demand decreases, prices will go down, then go back up as operators leave an unprofitable business (or are bankrupted). If the supply of available transport is increases, prices will go down, then go back up as operators leave an unprofitable business. Decreased risk will generally keep prices down, but can never drive the costs lower than the cost of providing the transport.

So at the end of the day, in a market economy, average shipping prices should wind up somewhere around the point at which typical operators can make a reasonable return on investment. This would certainly be the case in a well established entity like the Third Imperium. Given the low interest assumption in Traveller (5.55% to finance a starship), I'd submit that a return of 8-10% would be "reasonable" for a serious operator. A small potatoes operator might well be satisfied to cover all expenses and earn what his salary would be if he worked for someone else. (Of course, there will always be short term fluctuations and seasonal fluctuations as well; I'm talking average prices).

And if there is no market economy, a black market will invariably spring up where market prices (plus a risk premium) will be charged. If the government artificially limits shipping prices, then availability will fluctuate. If the government mandated rate is less than the market price, shipping will be scarce (and probably regularly available only on the black market at market prices+risk premium). If the government mandated rate is higher than the market price, there will be a glut of shipping (and the black market will provide it at lower market prices).

In any case, it is clear that the designers of MGT have no idea what they're doing. They've taken a broken economic system and made a bunch of ill-conceived and pointless changes to it. The result is a fussier system that is just as broken as the original. The tragedy is that a workable economic model could be created with only a few hours work.

Where did Mongoose find these guys?

 

[tbeard1999]

Thanks for posting a summary. Now I can chatter mindlessly without having to read the playtest

Sounds like the interest calculation is flat "wrong".

I still like the ship shares system. But, I'll have to think about it more.

In reality there is no need for a shares "system", at least in the starship financing rules.

Shares are an ownership concept, not a financing concept. And the designer's amateurish attempt to shoehorn them into the financing system adds nothing but murkiness.

It's the same problem, really. The designer is so concerned with being "clever" and "innovative" that he's produced a lousy game.

I have no objection to proposing shares as a way for parties to divide ownership of a starship. But it's silly to force that concept into starship financing -- something that's no more complex than financing a car in the Real World. Of course, if the designer hasn't bothered to learn anything about how financing works, I guess this incompetent and hamfisted system is the best he could come up with.

Now, the Old Starships rule definitely needs to be tweaked. Ok, replaced. Ships just don't last more than a century...

There's not enough substance there to tweak or replace. It's an ill-concieved hodgepodge of house rules that make little or no sense.

Sounds like the passenger & freight rules need relaxing, too, eh? 2D low passengers on the average, 1D middle, 1/2 high, eh? Well, perhaps a fix would be to bump that up a bit closer to CT numbers on the average.

The problem with this rule will always be that it is insensitive to starship capacity. So small ships will easily fill their holds and larger ships will never be able to fill their holds. The result is that larger ships will never be profitable (especially as carrying capacity is roughly proportional to cost, {assuming the same drive ratings} at least in ranges I've reviewed so far).

Percentage basis is, IMO, more flawed than the current model, at least given the underlying assumption about interstellar travel being rather uncommon, and interstellar travel by people of independent means who choose tramp traders rather than corporate liners being even more quirky (read: plot hook) and even more uncommon.

Travel in Traveller is no more expensive than transatlantic travel in the 19th century. By that time, shipping prices were commoditized and the main variables were speed and luxury. So percentages should work fine as a mechanism to simply determine how well an RPG ship captain does. It will yield far better results than an absolute method in my opinion.

My suggestion would be a roll for each class (cargo and passengers). Say, (2d6+3) x 10%. So on an average day, ships will be at full capacity. If the roll is higher than 100%, adjust the prices that can be charged accordingly. No fuss.

A better system in my opinion is what I do in my campaigns. I assume 100% carriage rates, but roll for the current market price per ticket or cargo ton. That system might work thusly:

Cargo: (2d6+3)*10%*cr1000 per ton
Middle Passengers (75% of staterooms, round up): (2d6+3)*10%*Middle Passage Price
High Passengers (25% of staterooms, round up): (2d6+3)*10%*High Passage Price

The alternative would be to generate (a) the total amount of cargo and passengers at a starport; (b) the total amount of shipping available including the PC's ship; and (c) determine how much of the available action the PC ship gets. This seems like a lot of trouble, and won't really generate a more useful number than the method above.

I'd add that distinguishing between high and middle passages is hardly worth the effort. There's only a cr1000 difference in ticket price (high passage gets an extra ton, worth cr1000 on its own, which reduces the real difference in prices).

Edited to change rolls from 3d6 to (2d6+3).

 

[sablewyvern]

In reality there is no need for a shares "system", at least in the starship financing rules.

Shares are an ownership concept, not a financing concept. And the designer's amateurish attempt to shoehorn them into the financing system adds nothing but murkiness.

It's the same problem, really. The designer is so concerned with being "clever" and "innovative" that he's produced a lousy game.

I'd be a little more generous and say it's an attempt to simultaneously simplify and remove randomness from the TNE Ship DM concept, which is, IMO, an excellent foundation for determining a starting ship if you wish to offer an alternative to GM Fiat or simple group consensus (both of which remain valid options, whether you have a ship share system or not).

Unforunately, at this stage, the actual implementation seems awry, and the rest of your assessment appears fair enough.

 

[tbeard1999]

I'd be a little more generous and say it's an attempt to simultaneously simplify and remove randomness from the TNE Ship DM concept, which is, IMO, an excellent foundation for determining a starting ship if you wish to offer an alternative to GM Fiat or simple group consensus (both of which remain valid options, whether you have a ship share system or not).

Unforunately, at this stage, the actual implementation seems awry, and the rest of your assessment appears fair enough.

Given the numerous flaws in other aspects of the game, my generousity is exhausted. At this point--one week of playtesting left--there is no excuse for such sloppy and ill-considered mechanics. The designers are either (a) incompetent; or (b) completely lacking in professional pride and therefore willing to offer an obvious kludge for sale. Neither alternative impresses me much.

In any case, all of this wasted motion regarding shares, is, uh, wasted.

A far clearer solution is this:

1. Replace "shares" with Mcr1.0 of "equity" in a ship. This is a more accurate term in any case.

2. Equity can be "spent" for the starship downpayment, to reduce the loan balance, or (maybe) pay for starship improvements, but can't otherwise be converted to cash.

3. Unless otherwise agreed by the players, owners share profits and loss prorata by equity.

4. Use any of the one million online loan calculators to determine starship loan rates. Or, use the CT formula, which assumes a 40 year loan and 5.55% interest. Or tell me what your loan term and interest assumption is and I'll give you a rule of thumb.

 

[tbeard1999]

Travel in Traveller is no more expensive than transatlantic travel in the 19th century. By that time, shipping prices were commoditized and the main variables were speed and luxury. So percentages should work fine as a mechanism to simply determine how well an RPG ship captain does. It will yield far better results than an absolute method in my opinion.

My basis for this claim is some research I did a long time ago. Middle passage from Liverpool to New York in 1887 averaged about $80 one way. At that time, the average skilled worker made about $500 per year. So, the middle ticket cost about 16% of the annual pay of a skilled worker. Steerage would have cost about $30 one way, or about 6% of the annual pay of a skilled worker.

In CT, the average skilled starship crewman makes about Cr3k-4k per month or about Cr42K per year. So, a Cr8K middle ticket costs about 19% of his annual wages and a Cr1K low passage costs 2.3% of his annual pay.

 

[rancke]

In CT, the average skilled starship crewman makes about Cr3k-4k per month or about Cr42K per year. So, a Cr8K middle ticket costs about 19% of his annual wages and a Cr1K low passage costs 2.3% of his annual pay.

As an aside, by realistic costs, CrImp8,000 is too dear for a jump-1 trip, about right for a jump-2 trip, and too little for a jump-3 trip.

(The exact "right" cost for a ticket depends on which starship construction rules you use).


Hans

 

[tbeard1999]

As an aside, by realistic costs, CrImp8,000 is too dear for a jump-1 trip, about right for a jump-2 trip, and too little for a jump-3 trip.

(The exact "right" cost for a ticket depends on which starship construction rules you use).

Agreed, though it also depends very much on the ships themselves. No high-jump starship can compete with a low jump starship on low jump routes. The reason is that the high jump starship has significantly higher opportunity costs -- it has to allocate much more tonnage (and money) to drives. Most dramatically, it has to allocate significant tonnage to fuel storage.

So economic efficiency demands that jump-1 routes be serviced by jump-1 ships; jump-2 routes by jump-2 ships, etc.

This analysis was apparently not done by the designer of MGT...

 

[rancke]

Agreed, though it also depends very much on the ships themselves. No high-jump starship can compete with a low jump starship on low jump routes. The reason is that the high jump starship has significantly higher opportunity costs -- it has to allocate much more tonnage (and money) to drives. Most dramatically, it has to allocate significant tonnage to fuel storage.

Yes, I've taken that into account in my calculations. One of the factors that makes a considerable difference is whether or not a ship has to spend 1% per jump number of its tonnage on tankage for power plant fuel (as the CT rules requires) or not (as plausible power plant fuel consumption would allow).

So economic efficiency demands that jump-1 routes be serviced by jump-1 ships; jump-2 routes by jump-2 ships, etc.

Etc. for jump-3, but not for jump-4. Two jump-2 trips are slightly cheaper than one jump-4 (when you adjust for jump-4 ships having smaller cargo bays). Two jump-3 is a lot cheaper than one jump-6.

For 4-parsec trips the difference in cost is so low that I'd expect a lot of passengers to be willing to pay for a jump-4 trip rather than two jump-2 trips.

This analysis was apparently not done by the designer of MGT...

Well, to be fair, it wasn't done by any of the designers of the previous Traveller incarnations, except for the authors of Far Trader.

But if MGT still have free traders bought (and financed) from new, then sent out to tramp the starlanes, then it is perpetuating a big mistake from earlier incarnations. IMO free traders are 40+ year old obsolescent ships, bought at used starship prices (25% or less of new price). Consequently they have much lower loan payments and can survive on marginal cargoes, half-filled staterooms, and week-long layovers during which the crew can be out having adventures.


Hans

 

[robject]

Travel in Traveller is no more expensive than transatlantic travel in the 19th century. By that time, shipping prices were commoditized and the main variables were speed and luxury. So percentages should work fine as a mechanism to simply determine how well an RPG ship captain does. It will yield far better results than an absolute method in my opinion.

Well, the trade rules support small ships and subsidies; i.e. the setting.

Now, that doesn't mean travel in Traveller isn't cheap... on large liners. That's why most everyone who travels uses them instead of my grungy old Far Trader. I'm picking up the scraps, here.

 

[robject]

Travel in Traveller is no more expensive than transatlantic travel in the 19th century. By that time, shipping prices were commoditized and the main variables were speed and luxury. So percentages should work fine as a mechanism to simply determine how well an RPG ship captain does. It will yield far better results than an absolute method in my opinion.

Well, the trade rules support small ships and subsidies; i.e. the setting.

 

[robject]

1. Replace "shares" with Mcr1.0 of "equity" in a ship. This is a more accurate term in any case.

2. Equity can be "spent" for the starship downpayment, to reduce the loan balance, or (maybe) pay for starship improvements, but can't otherwise be converted to cash.

3. Unless otherwise agreed by the players, owners share profits and loss prorata by equity.

4. Use any of the one million online loan calculators to determine starship loan rates. Or, use the CT formula, which assumes a 40 year loan and 5.55% interest. Or tell me what your loan term and interest assumption is and I'll give you a rule of thumb.

This all seems reasonable. Perhaps Gareth means 'equity' when he uses the term 'shares'?

 

[tbeard1999]

This all seems reasonable. Perhaps Gareth means 'equity' when he uses the term 'shares'?

<shrug>

Then one wonders why he wouldn't use the term equity. And of course, why he wouldn't write rules that treat it appropriately.

In any case, the shares system is, IMHO, a needless and pointless gloss on something that frankly isn't that complex. If you've ever financed a car (or know someone who has), then you can understand the basics of financing starships. No gloss, "clever" mechanics, or more comforting euphemisms are necessary.

 

[tbeard1999]

Well, the trade rules support small ships and subsidies; i.e. the setting.

Now, that doesn't mean travel in Traveller isn't cheap... on large liners. That's why most everyone who travels uses them instead of my grungy old Far Trader. I'm picking up the scraps, here.

While it's true that subsidies can exist, subsidies cannot exist everywhere (or most everywhere) within the free market economy generally assumed by Traveller. In any case, it is still necessary to determine real market prices, if only to properly calibrate the black market and the reasonableness of subsidies.

Prices are a fundamental component of the economic system. If any RPG economic system is going to be logical, it must determine prices logically. MGT does not do that.

And while it's true that previous CT versions didn't do that, that is no excuse. I expect an RPG designed in 2008 to be better than an RPG designed in 1977. And in the case of MGT, the designer did introduce a number of changes. The problem is that they did nothing to fix the defects in the system.

A familiar story, it seems.

 

[tbeard1999]

So economic efficiency demands that jump-1 routes be serviced by jump-1 ships; jump-2 routes by jump-2 ships, etc.

Etc. for jump-3, but not for jump-4. Two jump-2 trips are slightly cheaper than one jump-4 (when you adjust for jump-4 ships having smaller cargo bays). Two jump-3 is a lot cheaper than one jump-6.

I should have been clearer. What I meant is that (for instance) a Jump-4 ship cannot economically compete with a Jump-1 ship, on a single Jump-1, all else being equal. The reason is that the Jump-4 ship cannot carry anywhere near as much paying cargo (which includes passengers) because 40% of its displacement is spent on fuel, vs. 10% on the Jump-1 ship. In addition, the Jump-4 ship has bigger and more expensive drives.

So I think that the pricing for Jump-1, 2, 3 (and maybe 4) routes should assume a ship designed for that Jump number.

Not sure what your point is in comparing 2 Jump-2s to a single Jump-4. The two trips are not comparable for the simple reason that the single Jump-4 takes half the time. The same is true when comparing a single Jump-6 with 2 Jump-3's.

For 4-parsec trips the difference in cost is so low that I'd expect a lot of passengers to be willing to pay for a jump-4 trip rather than two jump-2 trips.

Me too. And the fact that starship costs are largely fixed means that it's possible that the total cost of making a Jump-4 is less than the total cost of making 2 jump-2's.

Well, to be fair, it wasn't done by any of the designers of the previous Traveller incarnations, except for the authors of Far Trader.

Not much of a defense, IMHO. I expect MGT to be better than a 30 year old ruleset. If it isn't, why bother?

But if MGT still have free traders bought (and financed) from new, then sent out to tramp the starlanes, then it is perpetuating a big mistake from earlier incarnations.

Yep. And I can forgive MWM for missing this point in 1977 (before spreadsheets), especially considering the many things he did right. I'm not so charitable to Mongoose (or anyone else).

IMO free traders are 40+ year old obsolescent ships, bought at used starship prices (25% or less of new price). Consequently they have much lower loan payments and can survive on marginal cargoes, half-filled staterooms, and week-long layovers during which the crew can be out having adventures.

I agree with your estimation.

The fact that banks will finance starships at very low interest rates for 40 years strongly argues that even a 40 year old ship will retain significant resale value. In the Real World, banks will require a 20+% equity cushion if making a long term, low interest collateralized loan. Reverse engineering this requirement gives us a pretty good idea of how fast starships depreciate:

1%/Yr in years 1-10
1.5%/yr in years 11-20
2.5%/yr in years 21-40

(Numbers rounded for ease of calculation). So a Mcr100 ship will be worth MCr90.0 at the end of year 10; MCr75.0 at the end of year 20; MCr50 at the end of year 30, MCr25 at the end of year 40.

 

[rancke]

I should have been clearer. What I meant is that (for instance) a Jump-4 ship cannot economically compete with a Jump-1 ship, on a single Jump-1, all else being equal. The reason is that the Jump-4 ship cannot carry anywhere near as much paying cargo (which includes passengers) because 40% of its displacement is spent on fuel, vs. 10% on the Jump-1 ship. In addition, the Jump-4 ship has bigger and more expensive drives.

So I think that the pricing for Jump-1, 2, 3 (and maybe 4) routes should assume a ship designed for that Jump number.

Not sure what your point is in comparing 2 Jump-2s to a single Jump-4. The two trips are not comparable for the simple reason that the single Jump-4 takes half the time. The same is true when comparing a single Jump-6 with 2 Jump-3's.

My point is that long ago I designed a number of different 600 T ships using QSDS1.5 (the modular T4 ship design system that's a simplification of the more complex T4 system) and worked out the cost of a jump and the number of passengers/amount of cargo they could carry. If you wanted to ship something four parsecs and didn't care about how long it took, it was cheaper to ship it by jump-2 ship, though not a lot cheaper. It was roughly six times cheaper to ship something six parsecs by jump-3 than by jump-6.

I had to make some assumptions, of course, but most of them wouldn't affect the ratio of costs (i.e., I assumed that a regular freighter/liner could make 35 jumps per year, but that number applied equally to all types of ships, so if you cut it down to 25 jumps per year, the cost of jump-2 and jump-4 traffic would increase by the same amount, so their relative cost would remain the same).

Me too. And the fact that starship costs are largely fixed means that it's possible that the total cost of making a Jump-4 is less than the total cost of making 2 jump-2's.

But if you actually work it out, it turns out that it isn't.

The fact that banks will finance starships at very low interest rates for 40 years strongly argues that even a 40 year old ship will retain significant resale value.

There's an old Travellers' Digest Q&A where it is said that a 40 year old ship is worth 25% of it's original cost. I myself favor 20%, since it simplifies the calculations of a starship loan (You start by having 20% of the ship's value and 40 years later you own something that is worth exactly that ).

IIRC, the wear value rule from TNE also gives you a value of 25% after 40 years.

The big problem is that as the rules stand, there is no reason why is shouldn't be worth almost 100% even after 40 years. The maintenance costs are no higher, the risk of breakdown is no higher. You just keep on making the same amount of money, only now you don't have to pay off the bank loan, so you'll coin money hand over fist.

My take is that this is an omission (or simplification, if you will). 40 year old ships do have significantly bigger chances of malfunctions, which is why the companies sell them to optimistic free traders and buy spanking new replacements. Meanwhile, the free trader is gambling that he can make enough money to cover the upcoming repairs before the jump drive or maneuver drive or power plant conks out. Those who win that bet goes on to found fledgling lines while those that lose it goes into bankruptcy, whereupon the bank sells the ship to the next optimist.

All in all, I think that roleplaying rules for free trading should focus more on events (like maneuver drives beginning to smoke) and less on economics. The best cargo a free trader can find on a world is the one that'll take it in the direction the ref wants it to go, not the one the players after rooting through the UWPs decide will be most profitably sold on a world the ref has never heard of.

In the Real World, banks will require a 20+% equity cushion if making a long term, low interest collateralized loan. Reverse engineering this requirement gives us a pretty good idea of how fast starships depreciate:

1%/Yr in years 1-10
1.5%/yr in years 11-20
2.5%/yr in years 21-40

(Numbers rounded for ease of calculation). So a Mcr100 ship will be worth MCr90.0 at the end of year 10; MCr75.0 at the end of year 20; MCr50 at the end of year 30, MCr25 at the end of year 40.

Sounds good to me.


Hans