Economics of small-scale interstellar trade

[womble]

I spent yesterday evening roughing out some figures on the economics of running a Far Trader and came to the conclusion that it's very difficult indeed to keep your head above water, needing to make in the region of 4000Cr/T/mth. And that's assuming full Mid-passage occupancy of the staterooms (6 of the 10, four are for crew).

It seems to me that for thriving stellar trade to be a reasonable expectation, standard cargo rates would be pitched at a level that would provide a bare living and cover overheads, with successful merchants being the ones willing to take the risks of speculation. I haven't done the calculation for a Free Trader (running the Mains and clusters), but I'd estimate they're quite a lot closer to break even.

Though traditionally standard cargo is paid for on a per-Jump basis, I'm thinking of upping it to a per-parsec basis for an upcoming campaign. Does anyone have any advice as to the ramifications?

Luck
R

 

[tjoneslo]

This is a long debate.

Your analysis is correct, the trade system in the T20 book as written barely allows a crew to break even. It's supposed to. The crew (and players and GM) are supposed to use the speculative trade system, where, with a little luck, you can make a real killing (like having enough profits after a year to buy a starship).

However, the basic trade system w/ speculative trade makes absolutly no economic sense.

By switching to per parsec trade costs the profitablity of the base trade system increases greatly. So much so it is no longer attractive to use the speculative trade system. I don't have exact numbers but the profits go up enough to allow the characters to feel they are making a good living.

The downside to this is, of course, the players will stick to the estabished routes to make the most money. The point of the basic trade/Speculative trade system is to give the GM a quick hook for more adventures:

GM: {faking several dice rolls} You can buy... computer at... 25% of base cost as speculative cargo. And the broker says he knows of a market for them two systems over (where the GM wants the players to go).

 

[womble]

"...trade system in the T20 book as written barely allows a crew to break even..."

Hmm. My example (a Far Trader) found that it doesn't even allow that, really, not without a consistent high load of passengers (which would crimp a party's style big time, most of the time). Unless the payback percentage in the THB is erroneous or I misread it... I'll check my figures again tonight...

Using the speculative trade system does look like a way of making a pot-load of money... It also looks like it's worth being quite familiar with it and doing some prep beforehand so that determining the details of however many cargos are available will be well worthwhile.

R

 

[ljsteele]

Have you looked at the G:Trav:Far Trader book. I'm told it did a great deal of work making Traveller economics make sense. Not sure how easy it would be to adapt to T20.

 

[womble]

Thanks for the pointer, Lisa. I'll have a look next time I'm browsing.

Had a look at my numbers last night, and compared a Free Trader with a Far Trader. The J1 ship with a 90T hold has to make around 240kCr/mth or 120kCr/Jump, whereas the J2 ship with a 60T hold has to make very nearly 300kCr/mth. The Free Trader is barely viable at standard cargo rates; the Far Trader isn't. Making standard costs "per parsec" doesn't change the economics of the most-common small trader in the core of the Imperium, but does make the Far Trader nearly as viable as the Free Trader.

 

[Vanguard]

My campaign just started, and the players have a Far Trader. I was going to try to adapt the rules from Gurps: Far Trader to T20, but as it turned out it's a lot of work. Here's a list of things I noticed will need work.

1. Prices - As far as I can see, the value of the GT credit is different than the T20 credit. A very very quick analysis gives about 1 GTC = 2 T20C. If someone else wants to do a more detailed analysis, I'd love to see it.

2. Dice Rolls, difficulty numbers, and character stats - The rolls given in GT:FT are obviously much different than those for T20. I'm not sure what the conversions between the two systems would be, though I'd bet you could find a d20 <-> Gurps conversion somewhere on the web that would help out.

3. Planet stats - GT uses a different notation for planet statistics than T20. This was a pretty easy conversion, as most of the stats map straight across. A few trade classifications that aren't available in T20 need to be calcuated, but that was pretty easy too. TL is a little funky, but there are conversion tables on the web and in the main GT book.

The biggest problem I have with GT:FT has nothing to do with conversion, however. It's the sheer volume of die rolls table look-ups, and calculations required for a simple cargo pickup. Unless you're using the "simple trade rules" (which are perhaps less useful than T20) it's just not feasable to use the GT:FT rules at the gaming table without slowing things to a crawl.

... However, if someone wants to work out all the conversions and processes, I'd be willing to write a program or spreadsheet to do the calculations, which would give us the best of both worlds.

 

[Vanguard]

The other option, of course, is to give your players a used ship. This means a smaller initial loan and therefore smaller monthly payments.

...and just think of all the fun you'll have when your players start finding all the strange problems and quirks in their 23 year old creaky, musty Far Trader...

 

[Liam Devlin]

Mr Womble, still in here? Good! here's another article from free lance that maybe of use to you in yer trade campaign...
http://www.freelancetraveller.com/features/shipyard/analysis.html
Again by Mr Ken Pick...
I think you'll find his tweak on the Traveller trade universe, and profitability to you liking.

heretically yours,
Slainte!

 

[Shadowdancer]

I always assumed the Traveller economics took into account that the players' ship was a used ship.

When T20 first came out, I did a "best scenario" calculation for a Far Trader. With minimum crew, an always full cargo hold, full low passage berths and 6 full high-passage berths every jump, and always making a jump 2 rather than a jump 1, you could make enough money each month to cover operating expenses and your loan payments. But you couldn't make enough to save up enough each month to pay your annual ship maintenance.

Your best bet is the crew working for shares, and engaging in speculative trade with at least one character being a Merchant with damn good skills resulting in damn good modifiers.

In our CT campaign, the characters had a Far Trader, but I had to keep throwing charters at them in the early going just so they could keep their heads above water until they got the hang of speculative trading.

 

[Liam Devlin]

My biggest beef with the system originally was yer merchie characters were born to lose, unless ye worked for a major line, or even a decent feeder line.
I like Ken Pick's tweaks, because in the long run, a merchant is in it to make money.
Flat out, in a nutshell. Buy fer less, sell for more, meet yer overhead, sock some away every trip fer those things called maintenance, and payments. Carry more stuff, bettering the odds of selling it. every now and again. And his tweak expands the existing narrow choices of ships from the old dayz as mustering out benefit, without getting huge ships (if thats yer speed, so be it)in player hands.
A stretched hull makes fer more cargo room. More cargo means more risk, but more profit. Or if yer adventuring as well, once ye sell off the hold, get that inflateable fuel tank* filled and Jump that small gulf ye couldn't cross to the next patch/ cluster of stars!(fer dems that hate drop tanks*).
Now some of this Mr pick's done maybe a metagame for Joe meat n Potatoes gamer, but fer those who suddenly wake up and smell the coffee with a pencil and scratch pad (me age showing, I remember when pocket caculators first arrived) and say-hey, we lose money every trip-why be a merchant-this is a great fix. Converting it to T20 isnae hard..or so Shane Mclean tells me.

 

[sandman]

Originally posted by Vanguard:
1. Prices - As far as I can see, the value of the GT credit is different than the T20 credit. A very very quick analysis gives about 1 GTC = 2 T20C. If someone else wants to do a more detailed analysis, I'd love to see it.

There has been a VERY lenghty discussion on the TML regarding that... Be alert, GT credits/costs changes for different TL (at least, that's what I understood). Just thought I'd mention it before you go charging head-first into Credit conversion.

2. Dice Rolls, difficulty numbers, and character stats - The rolls given in GT:FT are obviously much different than those for T20. I'm not sure what the conversions between the two systems would be, though I'd bet you could find a d20 <-> Gurps conversion somewhere on the web that would help out.

I've searched and searched, but didn't manage to find if such a conversion "explanation/sample/etc" ever exists on the web.

The biggest problem I have with GT:FT has nothing to do with conversion, however. It's the sheer volume of die rolls table look-ups, and calculations required for a simple cargo pickup. Unless you're using the "simple trade rules" (which are perhaps less useful than T20) it's just not feasable to use the GT:FT rules at the gaming table without slowing things to a crawl.

You can, if you pre-generate the stuff. If you really want to convert the die roll, refresh your mind with Mathematical Statistics to map the probability of 3D6 to those a 1D20.

... However, if someone wants to work out all the conversions and processes, I'd be willing to write a program or spreadsheet to do the calculations, which would give us the best of both worlds.

That'd be nice... just watch out for the Copyright Police.

 

[far-trader]

Well, looking for a way to explain the why of a seemingly bent or broken game rule before changing it, the poor prospect of the free-trader's may be a reflection of the dominance of the big boys. The megacorp merchants get the best systems and routes, then the subbies are assigned, with certain Imperial guarantees, including a cap on all non-regulated trade and travel. Hence the per jump rather than per parsec rate which heavily favours shipper's and traveller's choosing a multiple jump ship over a J1 or J2 free-trader. In fact the biggest reason the free-traders have any customers is probably because so many of them are shady (adventure hook). I mean if I have a legit shipment or trip to take I'll book on the nice big insured megacorp. On the other hand if I'd rather avoid any "Imperial entanglements" well that tramp trader looks pretty good. Not to say ya can't make an honest living as a free-trader

, I know I do

 

[Liam Devlin]

Aye Far Trader, but its an alluring road to Traveller-hood it be Besides, another 100dtns of ship means more stuff carried-yer still in the same boat class, and if ye get a scoop on something, ye can scoot out off sytem with more of it--before the big guys see it.

 

[sandman]

As to the commentary about Free Traders being only able to be relatively profitable doing shady deals because *everything else profitable has been taken, I agree.

Where I'm not comfortable is when even with contraband you're not turning a profit. At least, players should be able to "get by" without having to be contraband pushers *ALL* the time. But other than (wich keeps comming up in the forums/tml/etc) I don't have any problem. Anyway, the GM as all the latitude to do what he wants, so that saves the day

 

[womble]

Hi Vanguard

"...The other option, of course, is to give your players a used ship...

I was thinking about that... I remember that ships depreciate by 10% on purchae, and memory is trying to tell me it's 1/2 a % per year thereafter, but that'd mean writing them off over 180 years and that seems wrong. I'll try 2% of current value per year... I think that makes a 20 year ship cost about 60% of a new one. That'd make a big dent in the repayments the owner would need to make.

However, if a new ship isn't profitable for a trade line to run, why would a trade line buy it so that they could sell it (to the PCs) second hand 20 years later? Hmm. I guess the trade line might not be paying interest on new-purchased ships any more, which would have a similar effect for the corp to the effect buying used has on PCs...

Vanguard, I think you've solved my quandary. Thank you muchly. I'll try the numbers when I get a chance. I'm still going to have a browse of GT:FT - it sounds like the kind of thing I'll spend ages on...

Laim:
Still being there might have had something to do with forgetting to log out... :-/

Interesting analysis by Ser Pick. Not sure I agree with some of his premises though.

Paraquat:
"...assumed the Traveller economics took into account...players' ship...used ship..."
I think you're right.

"...When T20 first came out, I did a "best scenario" calculation for a Far Trader..."
The selfsame thing I did almost as soon as I got it...

"...minimum crew...full cargo hold, full low passage berths and 6 full high-passage berths every jump..."
A little more optimistic than my "best case", but not much.

"...Your best bet is the crew working for shares, and engaging in speculative trade with at least one character being a Merchant with damn good skills resulting in damn good modifiers..."
The speculative trade stuff in THB could be very generous if the Ref isn't careful... a competent merchant can reasonably expect an average return of about 40% plus condition modifiers...

Far Trader:
"... poor prospect of the free-traders may be a reflection of the dominance of the big boys. The megacorp merchants get the best systems and routes..."
Problem is that with an Imperium-wide system of fixed tariff per ton, there's no such thing as "best routes"... The few cargo generation cycles I've been through suggest that it's actually quite easy for a Far Trader to fill its cargo bay with standard bulk shipping pretty much anywhere. That, and the calculations I've done have assumed a good steady cargo and passenger load.

"...per jump rather than per parsec rate...favours shippers and travellers choosing a multiple jump ship over a J1 or J2..."
Huh? [puzzled] A high Jump ship has less space for cargo and uses more fuel when explioted, but gets paid the same as a J1 ship per T moved. How is this favourable?

All:
Thanks for taking the time to think about this... I'll retry my estimates with second-hand ships and new ships which are just being amortised and see if the figures come out any better.

 

[far-trader]

Originally posted by womble:

Far Trader:
"... poor prospect of the free-traders may be a reflection of the dominance of the big boys. The megacorp merchants get the best systems and routes..."

Problem is that with an Imperium-wide system of fixed tariff per ton, there's no such thing as "best routes"... The few cargo generation cycles I've been through suggest that it's actually quite easy for a Far Trader to fill its cargo bay with standard bulk shipping pretty much anywhere. That, and the calculations I've done have assumed a good steady cargo and passenger load.

True, what I was going at as defining a best route were the ones that provide a large enough trade to fill the big boys (not the free trade tables, which represent what's left IMTU). Not really a game issue at all, just background color

Far Trader:
"...per jump rather than per parsec rate...favours shippers and travellers choosing a multiple jump ship over a J1 or J2..."

Huh? [puzzled] A high Jump ship has less space for cargo and uses more fuel when explioted, but gets paid the same as a J1 ship per T moved. How is this favourable?

Ah, I was unclear. Its favorable for the shipper or traveller, not the carrier, who as you say would lose money, unless they (more color) offered value added attractions (i.e. luxury appointed staterooms and/or suites, guranteed delivery times and insurance, etc.) and charged a premium or were subsidized. These options are only allowed IMTU to the big boys who have routes, not the go where you please free traders.

All:
Thanks for taking the time to think about this... I'll retry my estimates with second-hand ships and new ships which are just being amortised and see if the figures come out any better.

Look forward to your analysis, its been a while since I did any myself so hard numbers would be good to see.

 

[Vanguard]

Originally posted by womble:
Hi Vanguard

"...The other option, of course, is to give your players a used ship...

I was thinking about that... I remember that ships depreciate by 10% on purchae, and memory is trying to tell me it's 1/2 a % per year thereafter, but that'd mean writing them off over 180 years and that seems wrong. I'll try 2% of current value per year... I think that makes a 20 year ship cost about 60% of a new one. That'd make a big dent in the repayments the owner would need to make.

P.279 T20 states that the purchase price of a used ship is equal to 90% of the original price minus 10%/10 years (or fraction thereof).

I gave my PCs a 20 yr. old ship, and charged them 50% of the original price (I think). This is a big discount over the price according to the rules, but the ship is in bad shape, and desparately needs an overhaul (which leads the players quite nicely into the Linkworlds Cluster minicampaign).

Thinking about it more, I think I charged them 1/3 of the 'new' price. This would account for the fact that their little expedition is being funded by the Zhodani govt.

However, if a new ship isn't profitable for a trade line to run, why would a trade line buy it so that they could sell it (to the PCs) second hand 20 years later? Hmm. I guess the trade line might not be paying interest on new-purchased ships any more, which would have a similar effect for the corp to the effect buying used has on PCs...

Also, they could have purchased it from a private owner who purchased it new after not running the numbers effectively and going out of business. Or it could have been salvaged after an attack or catastrophe, and then rebuilt. Lots of possibilities, some of which have some story implications.

Vanguard, I think you've solved my quandary. Thank you muchly. I'll try the numbers when I get a chance. I'm still going to have a browse of GT:FT - it sounds like the kind of thing I'll spend ages on...

You're quite welcome, and I'm waiting to see how your adventures with GT:FT go!

 

[womble]

Far Trader sed::
"...I was...defining a best route...that provide ...enough trade to fill the big boys (not the free trade tables, which represent what's left IMTU). Not really a game issue at all, just background color [Smile] ..."
Ah. Gotcha. In many ways, I think this is probably true on all worlds. The trade the planet depends on won't be measured in 10s of Ton, it'll be grain or air/rafts or metal shipped by the kT in huge bulk carriers which run on an entirely different economic model and don't have the wherewithal to deal with penny-ante lots.

As I see it, "standard" cargo is private goods, possibly someone else's speculative trade, possibly some emigrant's personal effects, possibly just a regular shipment of supplies or goods-for-sale to a remote branch; there's an infinite variety.

Re: Large J Number merchants
"...favorable for the shipper or traveller, not the carrier, who...would lose money, unless they (more color) offered value added attractions...and charged a premium or were subsidized. These options are only allowed IMTU to the big boys who have routes, not the go where you please free traders...."

I prefer a more demand driven economy... if a tramp freighter wants to fit gold taps and charge extra... Charging a premium isn't s'posed to be allowed though, and I've been tinkering with the concept of the "Starport Factor's office" who are charged with making sure the cargos get loaded in the order they're submitted for departure (within limits and respecting priority etc) and managing the 100Cr/T charge. There will be fiddles of course, and I think the Factor would charge, say, 10Cr/T to the sender of the goods and it would be up to the sender to arrange insurance - maybe the IFO could have a standard insurance policy and require assertions of spaceworthiness etc from the ship's Master before they became eligible for carrying Standard Cargo...

"...Look forward to your analysis..."
I may do it tonight, but I won't get chance to post it til Monday, in all likelihood. :-(

Vanguard sed:
"...P.279 T20 states that the purchase price of a used ship is equal to 90% of the original price minus 10%/10 years (or fraction thereof)...."
Saves having to calculate compund depreciation I suppose... I don't mind doing the sums so I'll probably use a depreciation amount to work out how much I should be charging for ex-fleet rustbuckets...

"...desparately needs an overhaul (which leads the players quite nicely into the Linkworlds Cluster minicampaign)..."
I find myself wondering what is meant by "overhaul"... even annual maintenance is only about 3kCr for a Far Trader, which is peanuts in an 18MCr/yr operation. Some things have a single component that has a finite life expectancy which can't be extended appreciably by careful maintenance... There must be an element of this in spacecraft. Maybe the reason they're amortised over 50 years is because the power plant has to be replaced wholesale sometime between 50 and 60 years... This overhaul isn't included in the figures for Megacorp spacecraft cos they're invariably less than 40 years old, usually less than 20. But someone who takes a mortgage out on a 30/40 y.o. spacecraft had better beware...

"...could have purchased it from a private owner who purchased it new after not running the numbers effectively and going out of business. Or it could have been salvaged...Lots of possibilities, some of which have some story implications..."
I don't think anyone would shell out MCr of their own money in a market as well understood as Standard Cargo and not know the stakes... Maybe some dilletante who fancied speculating a lot and was right royally fleeced by the professional Merchants out there... Salvage, though. That's a good way of dropping the price a bit more...

"...waiting to see how your adventures with GT:FT go! ..."
Heh. I wouldn't hold your breath - not likely even to get a chance to peruse the thing until next month...

 

[womble]

Okay, I ran the numbers again, assuming a 2% compound decrease in the price of a second hand merchant ship. Makes a big difference. A twentyish year old Far Trader does only need to make about 3000Cr/T/mth to cover all scheduled costs. Corporations who can afford to buy their ships outright have an easier time of it, not having to pay interest. Even including the depreciation charge for writing the ship off completely in 40 years (ignoring the interest they'd otherwise make on the capital if banked), the Corp can make maybe 500Cr/T/mth on a new ship.

Phew. It's not broken.

 

[dmoran]

I have Far Trader, and yes, it's a lot of work to actually *use* the system involved. But if you're running a merchie-oriented campaign, that may be the way to go, detail-wise.

I find it *far* more useful in terms of framing the campaign structure. It basically says that yes, the big lines carry 95% of the trade of the Imperium; it doesn't make economic sense for them *not* to.

So what's left for the lowly tramp freighters? WEll, sometimes there's an oversupply of cargo at a world--the factors are working on these things months in advance, and they frequently mess up their predictions. So there's a miniscule (by big lines standards) amount of breakbulk that needs to be shipped but lacks big-lines cargo space to haul it. So they turn to the tramp market, which can handle loads that size pretty much as their bread and butter. So a market develops, because there's pretty much always this overage, particularly at large worlds.

That's breakbulk. Speculative.. frankly, I'm not sure if the speculative cargo system in T20 is broken or not. My player had pretty much concentrated on merchant-related skills, and as a result almost *couldn't* lose money on spec. trading. She was routinely hitting 400% profit on things. After approximately six trips, the crew was sitting on something like 15 million credits. (Granted, they used their skills to acquire and repair a very, very old and crappy far trader, which was an adventure in and of itself, but even with monthly payments they'd be well in the black.)

And they could keep doing that indefinitely until the ship was paid off--early!

One really good roll on the spec cargo trade (not really all that hard to do) combined with a good merchie.. and your players are rolling in the dough.

Is this broken? I'm not sure. I do know that if I was a merchie and had a ship I'd pool all my weath, find a decent planet pair with one jump between and just run spec cargo on that route for several iterations until I'd built up enough of a bankroll to do what I wanted to.