Thoughts on large ship operations.

[MR TEK]

Prompted by the thread [FONT=arial,helvetica]Size of the merchant fleet IYTU?[/FONT] http://www.travellerrpg.com/CotI/Discuss/showthread.php?t=25811 I have decided it is time to present my vision of interstellar transport.

Most of this should be rules set independent till the discussion turns to actual ship designs. I will try to not challenge canon, and where I might or canon does not exist I will make evry effort to call that out.

First I have always thought the commercial ports would be what I would term 'Far ports' Consider them the same as major commercial ship ports, or large truck terminals. Only commercial ships with contracts would operate through them. Other traffic would never even come close enough to see them, let alone travel through them.

They would be operated by the mega-corps, or possibly sector wide corporps.

They would always be placed outside of the 100-d jump limit of any body within the system. Even with a 100 Mdt terminal facility, at 1g ships would clear the jump shadow and be free to jump in a few minuets. In T20 there was a suggestion that with high nav skill the navigator could select the jump parameters that minimized the amount of time in jump, or the radius of error emerging from just. how effective that would be be up to game masters to determine, but making them less variable, along with the minimal time to and from the jump zone would maximize the efficiency of the ship.

Elsewhere there have been discussions that a ship that does not have the distractions of booking cargo would be able to make 3 jumps per month, instead of just 2. I would also take it as a matter of course that the crew spend the entire jump doing the routine maintenance, cutting the cost and probably the time diverted to annual maintenance. All bookings would be done by the agents working at the port, as well as warehousing to maximize load and unload times. 3 jumps per month leave a given ship in port for three days between jumps.

Since such ships would NEVER have a need for more than maneuver 1, all that space could be directed to cargo. Most ships would be jump 1 and simply travel back and forth along the jump 1 mains. Long jump ships would only travel at their longest jump between such ports. Ships would run a set route, over and over, terminating at the world where annual maintenance is preformed.

Ships would never encounter atmosphere, or gravity, and would be as large as can be built and absolutely bare bones. Roughly equivalent to Supertankes and modern container ships. They would be a hull with just enough drives and crew to make the ship move so that they maximize cargo capacity.

For routes that cross voids all of these advantages would be required to maximize trade across the route.

They would be built just outside the jump shadow of the main world within the system.

they would be 100% outside the authority of the local system. No customs, no extrality lines. Those would be dealt with at either the local high ports, or more likely at the final destination low ports.

Normal passengers would almost certainly be handled through similar facilities, although long jump ships might be more common.

These facilities would only be built at high traffic worlds, and would almost exclusively handle the standard shipping for the system. anything with a standard monthly volume, from major industries. All traffic these ports would be at the imperial mandate shipping rates.

There would of course be a constant stream of in system traffic to and from the various high ports around the system. All of the cargo would be in standardized shipping containers, and there would be purpose built tugs that would transport the containers to the High ports.

For shippers, and passengers, their journey would start at the low ports, or if space elevators exits, those terminals, or whatever terminals in space feed the high ports. Virtually no traffic should go from the high port directly to a destination, but would go through a terminal of some sort.

In systems too small to support the large ship trffic, ships would jump to and from the high ports, as most people accept as normal. Also the small percentage of cargo that is to infrequent or too unconnected to ship through the major carriers, would also jump directly from the primary high port in the system.

The bulk of that traffic would be picked up by the regional carriers, and the local subbies.

The tiny fraction remaining would be picked up by the little independent companies and the free traders. At this point I would disagree with canon. Whats left would be left because it cannot be contracted, or will not be contracted through the larger carriers. A tiny amount of it would be passengers holding imperial passages at the Imperial common carrier rate, but most of the traffic available would be contract negotiated on the spot.

This leaves the independents filling their hold and cabins with whatever they can snag at the going rate.

There would also be priority, and security transports, that charge significantly more, and would NOT be subject to common carrier rates.

Next will be some of the large scale economics.

Mr Tek.

 

[MR TEK]

Economics

Several things not addressed in canon:

- The ONLY costs for ship operations are retail prices for someone buying a single ship.

- Financing is given for an individual or small group with little to no significant credit history, no properly documented income to support the loan, and a very significant risk of defaulting by skipping with the asset securing the loan.

It also represents a loan originated by most likely an independent agent. This means that these are loans with interests rates and fees in a whole different universe from what even the smallest commercial line could secure, and the megas would get terms astronomically lower for their ships. Especially since it would likely be financed by a sub-unit of the same Mega-corp at rates that are only available internally.

That is if if is better to simply build the ship internally, or lease the ships from another unit or another large corporate leasing agent that builds them to spec and then leases them.

- On a large capital purchase, the retail markup can often be very significant. At one point cars would be marked up 100% and more above the wholesale rate. Components would be even worse. Large volumes, especially repeating month after month cut the margin significantly.

And if they come from a sub-unit of the Mega, they would be shaved even thinner.

- since the larger corporations either do the bulk of the business through a given port, if they do not technically own it outright, docking fees, maintenance and all other expenses are at a rate the average PC could not even imagine, let alone be allowed to pay.

- Similarly, IF they buy supplies, food, life support supplies, or what ever at retail, there will be similar discounts.

All of this means that Megas can and do make a horrendous amount on every jump at Imperial common carrier rates. In a large ship universe, 6 or 700kdt per jump is a LOT of money. Take that times several dozens of ships average per world per month, and that may not be the primary income, but it would be a profitable unit of the Mega.

Add strong arm tactics against ports, and supplies to charge the absolute minimum that they can and you have a rough picture of the economics of the Mega Corp.

Just look at Walmart. Suppliers have gone out of business because they lose money selling at the price Walmart demands, and stories abound of companies driven out of business because they refused to sell to Walmart at the price they demanded.

I am sure there are people familiar enough with shipping and transportation that they could provide real world numbers that would be a baseline, and could extrapolate to the scale and conditions we are dealing with.

 

[aramis]

Several things not addressed in canon:

- The ONLY costs for ship operations are retail prices for someone buying a single ship.

Wrong. There is a canonical discount for multiple ships built in a single yard - non-standard designs are 20% off under Bk5 (pg 20); designs with well established runs in an area (standard designs) are 10% off. (TTB 56.)

The 20% off is specifically for fleet building.

 

[far-trader]

Several things not addressed in canon:

- Financing is given for an individual or small group with little to no significant credit history, no properly documented income to support the loan, and a very significant risk of defaulting by skipping with the asset securing the loan.

Perhaps in your TU. Not in mine. Per the rules a ship loan requires a sound business plan. I presume that and other assets are the backing for those Merchants that roll Free-Trader in mustering out. Among other factors are that they have passed the trust level and background history that clears them as a risk to skip.*

Besides, you make it sound like skipping is a walk in the park. It isn't (or at least shouldn't be). In my TU at least there are secure methods that make missed payments a significant problem. And even bypassing them leaves you with no honest way to make a living. Trust me, if you can't make your payments you're better off just walking away than trying to skip.

* What the PC's do AFTER they have the ship is usually another matter entirely...

 

[MR TEK]

I agree that skipping will not be successful, but skip tracers, collections, and shrinkage due to vandalism and careless mishandling are all additional costs that add to the what it takes to administer those loans. They are also not going to be administered and underwritten by the same companies that underwrite huge fleets, so even the normal overhead is much higher. End result loans to single ship owners will be at massively worse terms that they are on the ships in the fleet of the of any of the large scale carriers. The terms would be progressively better for established companies with small fleets, regional carriers, sector wide concerns, and the Megas. Each will get better rates because each is more insulated from monthly, yearly and long term cash flow fluctuations, and from war, and other uncontrollable events. They also receive their loans from progressively larger financial entities that have progressivly lower costs for their own borrowing, and can offer lower rates to their clients with the best risk profiles.

And while no one rational would take the risks that go with skipping, a certain percentage that get in too deep would skip, regardless of the fact that virtually every ship would be recovered in time. That is a risk that simply shrinks at the level of the subbsidized merchant fleets, and vanished rapidly with the more established entities. The fact that they are recovered does not erase the expenses incurred, and that has to be amortized into the cost of money. Buying a car from the local dealer is WAY more expensive than the per car terms buying or leasing from a national fleet leasing agent.

Just my understanding of the costs of money, extended to the imagined reality where the economy we have would barely be a line item in a quarterly report of sector wide corporation.

 

[MR TEK]

From the other thread, I see that my markups on ships are probably much smaller then I had expected. Possibly on the loans too, although the they will still amount to significant savings vs the independent operators.

I would appreciate any one else that can ring any hard numbers to the discussion. I have my understanding, but without so solid real world numbers the best I can do is guess at what the savings are.

I still think interstellar commerce has much better profit margins for the carries big enough to ship freight and passengers are the Imperial common carrier rate, then has been assumed.

Mr tek

 

[Starviking]

Wrong. There is a canonical discount for multiple ships built in a single yard - non-standard designs are 20% off under Bk5 (pg 20); designs with well established runs in an area (standard designs) are 10% off. (TTB 56.)

The 20% off is specifically for fleet building.

The discount for non-standard designs seems odd - I would have thought that building a non-standard design would add costs due to the shipyard being unfamiliar with it.

 

[far-trader]

The discount for non-standard designs seems odd - I would have thought that building a non-standard design would add costs due to the shipyard being unfamiliar with it.

I think (I too found) it is a bit confusing use of the term. What I think Aramis is saying is:

Prototype/New Designs cost the base 100% as a starting point.

Next in line are single builds of Standard Designs which get a 10% break.

And finally for large orders of the Standard Designs another 10% discount is applied. The question being how large is a large order? Two of the same design? Five? Twenty? A Hundred? ...

In (rules/meta) reality that's not how it works.

LBB2 Standard Designs (1) get 10% off, Custom Designs get no cost break.

(1) Limited ship types, those listed in LBB2 and those designated so by the ref, and presumably many of those that followed in books such as S7

LBB5 ships get 20% off after the prototype is built (at no cost break). There is no requirement for a fleet order or limitation to only military ships.

A single Beowulf Class built to and using LBB5 is 20% off. Compared to the exact same Type A Free-Trader from LBB2 which is only 10% off. Though each system has different (some insist incompatible ) design mechanics.

 

[MR TEK]

I think what he was trying to say would be that small runs of a standard design get a discount, because the jigs are already worked out and available, and the programming for the machines has long since been optimized to maximize efficiency of both time and materials..

Custom designs don't get that break.

Once that design reaches the point of a 'large' run you gain the same advantage that standard design has, and you get the full discount.

At least that was the way I read what he said.

In the real world, I believe, pricing is usually a base price for standard models, and a new design is extra. There are prototyping houses that will produce one offs and small runs for less than it would cost to tool up from scratch to build, but they are way more expensive than a production run.

Also you would have to figure that a non standard design is going to be difficult to maintain. That is also not mentioned in the rules, but that standard A2 that hundreds or thousands of fly into and out every port every week is likely to have a steady stock of parts warehoused and waiting, because they will be sold as fast as they can be produced.

The custom ship, even if the fleet is big enough to have parts available at the primary shipyard will not have all parts waiting at every port. Something breaks you are waiting for the part to be ordered from a key port, or worse, wait for the design specs to be ordered, delivered and a one off to be tooled and built.

Even in something on the scale that starship construction would have to be to meet demand, there would be one time costs for a new design that would have to be amortized over the units produced.

I would expect new designs to be rare, especially in a society as hidebound as the Third Imerium. Virtuially everyone will assume that optimum designs were perfected long ago, and it is to expensive to experiment.

When something new is designed and is successful. The company that ordered it would want to rush it in to production to maximize the roi of the design, and testing, and the retooling costs that the ship yard demanded to build the initial units.

Remember, for military hardware a huge part of the costs are design, testing, and maintaining a replacement parts inventory. A commercial operation, even a Mega can't do that all of the time.

 

[aramis]

At least that was the way I read what he said.

close, not exact, but close enough for this discussion.

In the real world, I believe, pricing is usually a base price for standard models, and a new design is extra. There are prototyping houses that will produce one offs and small runs for less than it would cost to tool up from scratch to build, but they are way more expensive than a production run.

depends what size ship you're talking.

Real world megaships are almost all "custom" from the yard's point of view.

Also you would have to figure that a non standard design is going to be difficult to maintain. That is also not mentioned in the rules, but that standard A2 that hundreds or thousands of fly into and out every port every week is likely to have a steady stock of parts warehoused and waiting, because they will be sold as fast as they can be produced.

it's actually covered in that the maintenance price is 1/1000 of the purchase price, which is reduced for standard designs. 10% reduction in annual maintenance, therefore. (MgT is different.)

Note that payments or replacement shares comprise up to 90% of the op costs of a large Bk5 freighter - it's possible to get to Cr900/Td/J at 3J4 a month on a 2000Td mass-production Bk5 freighter. At which point, it really is affordable to charge "CT Book Rates"... but it's insanely difficult for me to justify mentally having too many of those, because, by the same token, one can push J1 costs in that size range down to about Cr 200/Td for that same level of discount... it does involve having an FPP aboard, mind you...

 

[Dragoner]

From the other thread, I see that my markups on ships are probably much smaller then I had expected. Possibly on the loans too, although the they will still amount to significant savings vs the independent operators.

Mr tek

Commercial loans will be at a much better rate than the small operators will get. Plus large companies have many different ways of finance, issuing stock, bonds or paper.

What players play in should be just viewed as a speculative market and not be used for assumptions about macroeconomics.

 

[far-trader]

Also you would have to figure that a non standard design is going to be difficult to maintain. That is also not mentioned in the rules...

...it's actually covered in that the maintenance price is 1/1000 of the purchase price, which is reduced for standard designs. 10% reduction in annual maintenance, therefore. (MgT is different.)

o:



D'OH!

You know, all these years and that never clicked until now. I think I've always done the maintenance rate on the pre-discount cost.

In my defense I generally figured the discount was a factor of the down payment and loan structure more than an actual cost savings in the construction (and therefore parts and maintenance).

So, briefly how is MgT different? Or where do I find it in the book(s) (Core or HG)

 

[MR TEK]

close, not exact, but close enough for this discussion.

depends what size ship you're talking.

Real world megaships are almost all "custom" from the yard's point of view.

It is hard to get a handle on, but if we are talking about a big ship, high traffic universe, and as long as the Imperium has lasted, there would have to be some designs repeated so often, and for so long, that they would be closer in production terms to say luxury cars then complete one offs. That would be the whole point of calling out standard designs.

Now, whether that is true at the larger end is truly dependent on how much volume you believe is needed.

My vision is obviously a very busy universe with huge trade volumes. I also know that others do not share that view, but with out those huge volumes it is hard to imagine Mega corps or even sector wide corps forming, let alone thriving.

If there are 500 of the same megaship under constriction at several yards across a couple of sectors, and that volume has been steady for say 2 centuries, there might still be room to modify the design from ship yard to ship yard, but those would not be custom designs as far as I can tell.

If the need goes higher, that would be even more true. On the overhand, if say there are only 500 in service that would only require 24 or so under construction, guess at any where near 24 months to build, they would likely still be custom jobs, and would likely be custom births at the periphery of the shipyard.

So, size and availability would depend entirely on how much traffic you believe moves, and and several other factors that only apply to the universe that matches your vision. Ymmv.