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Freight Charters and the Frontier

jatay3

SOC-13
One point I got from Far Trader was that for a system of freight charters(I.E. Merchant hires carrier for his goods)requires a well organized communication system so that the transporter knows he can get paid and the trader knows his goods will arrive safely.
Also a planet-bound trader will want to have a good chance of knowing what is going on in other ports and will desire the ability to send his orders.
The result of that would be that the proportion of charter cargo will diminish and the proportion of speculative cargo owned by the shipowner himself, or by a travelling merchant aboard a ship will increase in proportion to the closeness of the frontier. For instance in the core most cargo will be chartered, and in the extants most will belong to the shipowner himself or a travelling merchant.
Also Freight Rates and again proportion of speculative to freight will change according to the percieved difficulty of dealing in a given port. This will change according to circumstances.
For instance John Doe captain of Free Trader Getabuck is heading for the Spinward Marches when he hears that the Fifth Frontier War has broken out. He quickly sells off all the sweet freight contracts he had to a not-very-bright newbie Free Trader named Richard Roe. Then he loads up from the nearest markets on stuff he is guessing will soon be scarce. Dodgeing around the stars he sells off his cargo and comes back rolling in dough. In the meantime Richard Roe finds that his destination has been iced by the Zhos and he is nabbed by the Vargr on the way back. Half of Richard's money goes to pay ransom and half goes to pay when he is sued by the owners of the cargo. John Doe who is nothing if not chivalrous uses part of his money to rescue Richard Roe from his bad luck and part to refit his ship and by a second one-hopefully John Doe's decendants will be remembered as founders of a new Megacorperation. But in the meantime John Doe spends the rest of his life annoyingly reminding Richard Roe what happens when he doesn't watch his back.
An interesting story. But what does it prove? Well it illustrates how trade and communication tie in. When communication is secure, when financial institutions are trustworthy, traders can trade for many parsecs away simply by contracts. Transporters can live on freight contracts alone. When this security breaks down there will be more likly hood of personal involvment.
There will still be some freight contracts left. These pose a problem. The transporters will have fewer contracts on offer. But the traders will demand fewer. So both supply and demand will go down. Or is that the effect? Demand at the destination point will go up encouraging the go-getters to make it big. Will that replace the rest who are lying low?
In the Far-Trader setting one can recognize this factor by using "probability modifications" factored into a contracts price. Of course we already have the Amber and Red Zone modifications. However those are simplistic for they represent only single planets, not the effect of an entire intersteller trade system being disrupted(or constructed). Also they don't represent financial fluctuations: a run on a local bank can have a similar effect the traders pocketbook though not on his physical welfare. But the banking disaster is not enough to make it a red planet.
 
I totallu agree that trade and communication are inherently intertwined but why would the carrier worry about being paid? Surely carriers in such places would negotiate a contract where the cost of carriage was paid by the seller and not the buyer. The seller would then pass the price on to the buyer in the total sale price. That way the carrier would guarantee he was getting paid no matter what.

If there were problems of trust with the carrier (quaere: if you dont trust your carrier, why use them in the first place) the money could be placed in escrow pending the successful complettion of the contract of carriage.

As to red/amber/green zones - these things occur in modern insurance - a carrier is forbidden to enter a (to keep the terminology) 'red' zone by his insurer. If he does, then he travels without insurance. No carrier would do that unless he was indemnified by the party who hired him.

Which brings into play the other missing element of trade in traveller - insurance. Does it exist in Traveller: early and modern JTAS makes mention of Lloyd's of London. Hortelez et Cie is an insurance megacorp - In the view os some, insurance is simply gambling against oneself (i.e. I bet my ship is lost, if that is the case you pay me the price of my ship, if it is not the case I pay you a big premium), so where there is risk there is insurance.
 
I've always assumed a very limited form of insurance: most loans on ships are guaranteed by the IMoTrade, so the unpaid principal is covered. At least when the loans are not directly from the IMoT. Principal indemnification only, and limited to operations in green zones, with no collusion by ship's ownership; title passes to the IMoT, in case of later recovery.
 
Originally posted by Elliot:
Which brings into play the other missing element of trade in traveller - insurance. Does it exist in Traveller: early and modern JTAS makes mention of Lloyd's of London. Hortelez et Cie is an insurance megacorp - In the view os some, insurance is simply gambling against oneself (i.e. I bet my ship is lost, if that is the case you pay me the price of my ship, if it is not the case I pay you a big premium), so where there is risk there is insurance.
I refer you to: Commerce: Shipping Low-Value Cargos (and Starship Design & Construction), close to the bottom of the post.
 
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