mike wightman
SOC-14 10K
So what is the insetting reason for the megacorporations not setting up fuel refineries on every world on their trade routes so they can benefit from refined fuel at unrefined costs?
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- Thread starter robject
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The problem is that per port of call (functionally, per jump) evolves into per-parsec because at a fair per-jump rate for J1, no Jn over J1 is profitable and the supply of higher-Jn shipping capacity evaporates. Thus, the only available shipping happens at J1, and charges the J1 rate for each parsec.
There will still be a small supply of flat-rate higher-Jn cargo space from ships wanting to fill out their holds after accounting for their speculative cargo, but this probably won't be enough to keep the rates from rising above the per-parsec floor.
At that point, higher-Jn ships can enter the market profitably. Rates find an equilibrium between per-parsec and ship operating costs including return on investment.
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Condottiere
SOC-14 5K
What's that term where companies collaborate to achieve economies of scale, and reap the benefits in lower costs when charging each other, and consumers pay full price?
Vargr Breath
SOC-13
When Annic Nova came out we added it to OTU as a Merchant Exploration Ship. Sent to find new worlds for trade. It was more about exploration then trade.
Besides when absolutely necessary, when do you think it's actually worth the time to use unrefined fuel? I would think that would be a very limited case of having a handy ocean near the starport, or one orbiting a gas giant.
If you have to fly to the fuel source, it starts getting expensive in time.
But the system isn't designed or balanced around profitability for, well, anyone. It's not balanced at all!
Absolutely!
It works for the first few steps in the Trader ladder, then breaks down.
1. Type A
2. Type A2 if you go into spec trading, Type R if you're working bulk cargo (but it needs subsidies to patch it that far).
3. Type R but upgraded to J2/2G, mostly for spec trading (might be viable on subsidy).
4. Type M, but only through subsidies. And you're most likely a passenger anyhow, so...
This gives you quite a bit of a campaign before you run into the limits. And unless you're running a spreadsheets in space campaign, you might not ever notice the limits or figure out why it's an unsustainable system.
Spinward Flow
SOC-14 5K
Correct answer: there isn't one ...
Wrong.
How are you going to get to Lanth/Lanth or D'Ganzio/Lanth or any of a number of other locations off the J1 Main(s) when limited to only Jump-1 capacity?
Additionally, those Jump-1 Mains are not exclusively populated with:
- A/B starport mainworlds
- High population (9+)
- Moderate population (5+)
- Green Zones (not Amber or Red Zones)
Let's say you want to ship something from Regina/Regina to Yori/Regina in the Spinward Marches.
The two star systems are 2 parsecs apart. Seems simple enough, right?
So by your reasoning, the J1 Merchants ought to clean up all of the trading opportunities running between Regina and Yori and (to follow your postulate the J2 Merchants cease to exist due to a lack of demand for their services). J1 is "too profitable" relative to the J2 "not profitable enough" option, so the J2 ships "die" leaving only the J1 ships.
Then we look at the map.
Hmmm.
There seems to be a slight problem here.
You tell me if I'm seeing what I'm seeing here or not ... and if it has any relevance or bearing on a ship's profit margin potential.
Yori is a single Jump-2 away from Regina (2 parsecs).
Yori is SIX Jump-1 away from Regina (6 parsecs!) ... including an Amber and a Red Zone along the way.
Alternatively, Yori is two Jump-1 away from Regina (2 parsecs) ... but only if the J1 merchant has essentially the same fuel fraction (and therefore comparable revenue generating tonnage fraction) as the J2 merchant.
- Likewise, in an LBB2 starship encounters table universe, a J2 merchant could simply jump exclusively between Regina, Extolay and Dinomn ... all type A/B starports ... and never risk encountering a pirate ship.
- By contrast, in the same universe, a J1 merchant would need to transit through Jenghe and Dinom ... which have type C/D starports ... where pirate ship encounters are possible. Pirate attacks against J1/1G merchant ships can cause a lot of damage to profit margins, even if the attack isn't ultimately successful, so needing to venture into the Jenghe and Dinom systems is a potential risk that could potentially cost the loss of the entire ship (think about it).
In a vacuum/on a spreadsheet where the details of the route "don't matter" and you're automagically shipping with a full manifest every single time no matter what (because, statistics and lies) ... the J1 drive is going to look like a bargain compared to the J2 drive.
In actual practice when you need to navigate between star systems, being able to "skip over" parsecs so as to cherry pick your immediate next destinations has value which is difficult to quantify in a spreadsheet analysis (optimization of destination dependent upon speculative cargo being one of the most random). Having more jump range means more options of "where to go next from here" that makes all kinds of additional opportunities for profit open up that wouldn't have been present before.
Yes, there will be times and places and circumstances where a J2-3 drive is "more capacity than you need" but that doesn't ipso facto mean that it was a waste to invest in that capacity when the starship was constructed.
Not every star system is conveniently located on a Jump-1 Main ... and even those that are on a Main aren't necessarily all equally accessible through that Main, as demonstrated above with the Regina to Yori transit. If you have to refuel after every single Jump-1, then Yori is 6 jumps away from Regina by Jump-1 ... but only 1 jump away from Regina by Jump-2.
"Terrain MATTERS" is probably the best way to frame this point.
The alignment of stars on the map is going to determine whether J1 or J2 is the superior option for what you want to do.
Think of it this way.
From Regina, a J1 merchant has 3 possible destinations (not including Deep Space).
From Regina, a J2 merchant has 10 possible destinations (not including Deep Space).
Which of those two options is inherently superior for taking advantage of buy low/sell high arbitrage on speculative cargoes?
Follow up question: how many weeks of NOT engaging in a successful speculative cargo buy/sell does a ship need to engage in before it can match the returns of a single successful speculative cargo buy/sell?
Or to put it another way ... when opportunity knocks, can you even reach the door?
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Vargr Breath
SOC-13
For "Other" skills I would like to have had exploration and investigation. For Scout an exploration skill would have been nice also.
Our house rules were when rolling for reenlistment if you rolled a double, you could pick an extra skill from any skills table. A Merchant could pick Ship's Boat, Air Raft or ATV. Any service could pick any skill as long as it was a double above the reenlistment roll.
Our house rules were when rolling for reenlistment if you rolled a double, you could pick an extra skill from any skills table. A Merchant could pick Ship's Boat, Air Raft or ATV. Any service could pick any skill as long as it was a double above the reenlistment roll.
I might not have been clear. I was describing the market for freight shipped at Cr1000/Jump , not spec trading.Or to put it another way ... when opportunity knocks, can you even reach the door?
The other thing is that the chargen rules were set up when it was still plausible that one could spend one's entire career at one company/organization (or even merely just one career field). A more modern approach would allow changing career tracks (newer rules versions support this).
Vargr Breath
SOC-13
I've known more than a few people that were with one company their entire working time, but I'm an old fart. Yes, retiring from one of the services and moving to another would have been nice.
Spinward Flow
SOC-14 5K
Sly grin ...
What's a pension, grampa?
I know ... but common freight isn't where the money gets made, speculative cargo is, and for a number of legacy designs the default expectation is that speculative trade will be "required" to make up the shortfalls in the budget that are supposed to happen (by design, to encourage Players to go on Adventures to scrounge up cash).
If you want to stipulate that "where" the cargo in the hold (or the passengers aboard) literally doesn't matter to your bottom line, then yes ... J1 will usually have an advantage over J2+ in that regard when all you're doing is passenger tickets and cargo transport.
So your answer is ... probably not.Or to put it another way ... when opportunity knocks, can you even reach the door?
Good to know then.
Vargr Breath
SOC-13
"What's a pension, grampa?"Sly grin ...
What's a pension, grampa?
I know ... but common freight isn't where the money gets made, speculative cargo is, and for a number of legacy designs the default expectation is that speculative trade will be "required" to make up the shortfalls in the budget that are supposed to happen (by design, to encourage Players to go on Adventures to scrounge up cash).
If you want to stipulate that "where" the cargo in the hold (or the passengers aboard) literally doesn't matter to your bottom line, then yes ... J1 will usually have an advantage over J2+ in that regard when all you're doing is passenger tickets and cargo transport.
So your answer is ... probably not.
Good to know then.
It's waking up when you want and looking out on a cold snowy day and smiling.
That's the RPG answer -- and it's a good one. That said, the straight economics answer is that nobody's going to make 40-year ship construction loans for vessels that aren't going to return a profit at established cargo rates. This means that cargo rates in the market covered by the trade mini-game have to cover expenses for ships operating in that market, or there won't be such a market because there won't be any ships in it.
Common freight isn't where the money is made, true. But it's the baseline revenue level that drives return-on-investment calculations.
In your example, Yori-Regina sees a lot of freight piling up on the docks waiting for an A2, or R with demountable tanks, that just happens to be headed that way anyhow because it scored a load of computer parts (or something similarly value-dense) and has some extra cargo space. At some point, they'll pay a high enough rate to make it worthwhile for a ship to choose to haul their goods there, just to get it there at all.
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Spinward Flow
SOC-14 5K
Well ... when the whole point of saying J1 merchant ships rule the profit margins unconditionally regardless of map location (or any other considerations), it's only natural for the retort to be one of "hold my beer" and changing the nature of the game being played.
Well, if speculative cargo is "disallowed" by your analysis method, then sure ... the "only" way to pay off construction costs is going to be standard cargo rates and passenger service (a remarkably low density source of revenue).
I would counter with the notion that the benchmark you're trying to establish here is not so much an "only" path to payoff, but rather more of a "guaranteed" path to payoff (assuming full manifests, of course). After that, it's a matter of working out how much revenue tonnage fraction you can manage (and the proportion of the time your manifests will be full) on any given route (up to and including tramp freighter-ing your way around the entire sector).
Plenty of ships will have trouble paying off bank financing for construction loans, yet be remarkably profitable once those loans are indeed paid off (or if the ship is subsidized by a government).
That's exactly what I'm doing, because it's likely to be a very hard sale to convince a bank to loan you MCr60 or however much on a ship that doesn't have a guaranteed path to payoff. Maybe a very good trader can make that business case. . . More likely, they'll have to pay cash.
The big players are either non-ship-owning brokers doing their own speculation but paying the going rate to get it hauled, or are corps that are internally billing the ship's capex and opex against the profit they'll make on it.
For an example of something that the rules don't support, take my Shugushaag design (J5/2G/600Td, about 50Td payload). It costs about Cr18,000 per payload ton at Jump-5 (and shorter jumps don't save much). Or, in larger terms, a J5 and an extra week costs Cr825,000. There are cargoes that can be profitable at that rate (say, a batch of 12 air/rafts with a 20% profit margin, or ship drives). If the rules as written present a cargo like this to players at all, it's as 50Td of cargo at Cr1000/jump, though the entity owning the cargo is making over Cr17,000/ton on it. This is a problem!
The rules-as-written solution is to do your own speculation. That's fine, but it doesn't provide a significant supply of Cr1000/jump-ton cargo space on J5 routes.
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Spinward Flow
SOC-14 5K
Actually, what would happen is that the bank would lend the funding to the owner ... the owner would fall behind on the payments ... and the bank would repossess the ship. After that, the bank would simply turn the ship over to another operator who would also "be on the hook" to the bank (and hopefully better at keeping up with the payments or else wash, rinse repeat). Worst case scenario, the bank has the ship scrapped and it gets written off as a loss.
There are a number of starships which are profitable when paid off (or subsidized) so as to avoid needing to pay for bank financing.
It's needing to pay 240% of the purchase price under bank financing over 40 years that's the REAL killer to profit margins.
What's scary is that that 240% of purchase price final cost is basically a 2.1907% compound annual interest rate over 40 years (used an online calculator to check the math on that).
And just think ... if it had 500 tons of payload instead of only 50 tons, you would be within striking distance of breaking even in terms of revenue density if those 500 tons of payload were actually 1000 low berths (since low berths net Cr1800 per ton after paying for life support). Good luck with THAT!
Have you ever considered dabbling in speculative cargo transport?
However, as I mentioned previously, the "freedom of navigation" offered by higher jump capacity makes the buy low/sell high arbitrage of speculative cargo a much more likely proposition, since the wider range of possible destinations means a superior set of choices for where to go to sell the speculative cargo lot you've just bought.
And the river of the Great Material Continuum will provide, so long as you can successfully navigate it.
Spinward Flow
SOC-14 5K
I've got it.
You remember how I've been going on and on this past year about the notion of external cargo capacity?
QFQ drives in a 600 ton hull yield Jump-5, 2G, Power Plant-5.
But for 1000 tons, QFQ drives yield Jump-3, 1G, Power Plant-3 ... meaning, your Jump-5 design has 400 tons of external cargo capacity while still being able to make Jump-3 AND still have 1G of maneuvering capacity with that external load (sufficient for orbital transfers).
So if you're looking at around Cr18,000 per ton on 50 tons of (internal) cargo transport, that's around Cr900,000 in costs per jump.
However, if you increase your transport capacity with 400 tons of (external) cargo transport, suddenly you only need Cr2000 per ton on 450 tons of internal+external cargo transport.
In other words, as a TL=13 "jump tug" for external loads of up to 400 tons deadweight/displacement needing to travel up to 3 parsecs, the design can actually be somewhat competitive.
And just for extra credit ...
If the Shugushaag design featured QJQ drives instead (Jump-5, 3G, Power Plant-5 in 600 tons) ... as an external cargo tug hauler you would have been able to go all the way up to 2000 tons (total) with Jump-1, 1G, Power Plant-1 performance, yielding up to 1400 tons of external cargo capacity.
Cr900,000 in costs per jump
Cr1,450,000 in revenue per Jump-1 with 1400 tons external cargo plus 50 tons internal cargo
Basically, with 900 tons of external cargo (only) you would probably be operating at a slight profit.
Sure, that external cargo loading quantity turns the design into a 2000 ton J1 jump tug (kinda sorta) with the Maneuver drive upgrade from F to J ... but that isn't "all" it can be. It can be a Jump-3 (up to 400 tons external load) or a Jump-5 (clean configuration) whenever it needs to be for a more flexible mix of capabilities. That's not something you can achieve with a 2000 ton J1 freighter.
Ah, the "we carry the note" used car dealer business model. Might work.
Scary indeed. That's a bizarrely low rate for the expected risk (piracy, misjumps, a string of bad rolls on the spec cargo table...). Good thing there's no inflation in the Third Imperium... (And, given the actual interest rates and inflation in 1977, somewhat surprising.)
and
Think bigger.
Those same drives in a hull where they only yield Jump-1*... give you 2400Td payload (out of 3000Td). It costs only half again as much, too.
It can clear a profit at about Cr630/Td/jump cargo rates, if you can source 2400Td of cargo. Alternately, at Cr1000/Td/Jump it only needs 1370Td of its 2400Td cargo hold filled to break even.
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*needs more M-drive though, which is basically the Escort variant when drawn up for LBB2-only rules (J5/5G/6 x triple-turret). Yes, a 600Td mini-battlewagon repurposed as a jump tug for 2400Td cargo pod. Now, if they could get a hold of a power plant of the next size up (PP R -- it'd fit in the hull, but it's TL-14 instead of TL-13), it could use Double-Fire and REALLY ruin someone's day if they tried to go after the cargo pod.
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