Tramp Freighters and Monetary Instruments

[hal]

Hello Folks,
As the subject line suggests, the purpose of this thread is to explore monetary instruments and how they affect Tramp Freighters. While reading GURPS TRAVELLER FAR TRADER, something clicked in my mind as I was looking for information on another issue...

How are Tramp Freighters paid?

Think about it. If we're talking about "checks", checks have to clear before the tramp freighter captain gets paid. If a captain is moving freight from one port to another, he has to undergo some process that proves that the freight shipment has met the approval of the shipper/receiver - permitting the funds to be freed and handed over to the ship's captain.

I'm starting to think that the thought of 1 week in transit, 1 day to the starport, 1 day out from the starport, leaving the crew some 5 days to transact their business and get moving again, is a tad over-optimistic.

Why? Because in just about EVERY Traveller campaign I've seen regarding the ability to pick up speculative cargo - the person who is moving the goods has up to 4 days in which to make the delivery. When you factor in, as GURPS TRAVELLER FAR TRADER suggested - the fact that the ship's captain may have to deliver the goods not just to the world in question, but to the doorstep of the receiver - we're talking about substantial time being involved. Then we have the issue of "what happens when the goods are perceived to be damaged?" What happens when someone made a mistake on the count in receiving the goods - and holds up delivery or payment due for delivery?

Then we have the issue of ships being required to submit to inspection when it comes to passengers who may or may not be healthy. Administrative issues can arise easily enough, where the paperwork has to be submitted to the proper authorities - who in turn can return said paperwork because it doesn't meet their standards of completeness or has questionable answers to which the authorities disrupt the schedule of the tramp freighter.

In all, I'm starting to take a good hard look at some of the assumptions of the writers of the book and wonder "hmmm - what else seems to be missing?" As it stands, I'm going to be revising (for use in my Traveller Universe), the pay rates for freight on various worlds. If there are worlds that have any kind of economic activity - but have so little activity so as to not be worth any thing short of a Scout ship (because it has so little freight being a frontier world for instance) - the rates for shipping will rise until someone is willing to show up and handle the freight!

Now, if freight costs are double - does this impact on whether or not anyone will be willing to ship goods? Let's look at an example. Suppose you have a shipment of 100 laser rifles worth 2,100 credits per, or 210,000 credits overall to be shipped in a 2dton lot. Assuming that standard shipping prices are 700 credits per dton, shipping adds a total of 1400 credits for the entire lot. Dividing it by 100 (for the 100 units being shipped), that works out to an added cost of 14 credits per unit (valued at 2100 per initially at TL 9). Doubling the shipping cost to 2800 adds 28 credits per unit being shipped. That still works out to increasing the cost of the unit less than 2% overall of its original costs. Granted, there will be other costs such as tariffs or what have you - but you get my point.

On worlds where there is no scheduled freighter service, nor anything approaching the likelihood of tramp freighters being drawn in to do business on frontier worlds - the cost of shipping will have to rise to meet the needs of the freighters or there will be no freighter service at all. Colony worlds that need products are going to either have to pay higher prices for shipping of goods (importation of necessities, or exportation of resources for the markets) or become isolated. That doesn't mean that there won't be ANY that will be isolated - but it does mean that some worlds will hate the higher shipping prices and STILL pay it because there are no other freighters around.

[Hans Rancke-Madsen]

Originally Posted by hal

Why? Because in just about EVERY Traveller campaign I've seen regarding the ability to pick up speculative cargo - the person who is moving the goods has up to 4 days in which to make the delivery. When you factor in, as GURPS TRAVELLER FAR TRADER suggested - the fact that the ship's captain may have to deliver the goods not just to the world in question, but to the doorstep of the receiver - we're talking about substantial time being involved.

You're mixing up two different things here. For freight, the captain posts notice that in five days he's going to jump to a specific world and everyone who wants him to carry freight or passengers to that world will have to deliver the freight/show up on or before the date. For speculative trade he buys a load of whatever takes his fancy and the seller has four days to deliver it at the starport.


Hans

[Anthony]

Originally Posted by hal

How are Tramp Freighters paid?

Whatever means are agreed to in the contract. Usually that will be letters of credit (either CrImp or credit against a reasonably local bank or government), though payment in kind will occur occasionally.

Originally Posted by hal

Think about it. If we're talking about "checks", checks have to clear before the tramp freighter captain gets paid.

Think cashier checks, not personal checks.

Originally Posted by hal

If a captain is moving freight from one port to another, he has to undergo some process that proves that the freight shipment has met the approval of the shipper/receiver - permitting the funds to be freed and handed over to the ship's captain.

For an actual tramp, this is a big problem, but for a tramp with at least a semi-regular route, either he has a local trade factor who actually handles payment and approval, or it's expected to be resolved the next time he visits.

Originally Posted by hal

I'm starting to think that the thought of 1 week in transit, 1 day to the starport, 1 day out from the starport, leaving the crew some 5 days to transact their business and get moving again, is a tad over-optimistic.

Yeah, that's way too much time wasted in port. None of the problems you identify require the ship to be in-system -- just the local trade factor.

[hal]

Originally Posted by Hans Rancke-Madsen

You're mixing up two different things here. For freight, the captain posts notice that in five days he's going to jump to a specific world and everyone who wants him to carry freight or passengers to that world will have to deliver the freight/show up on or before the date. For speculative trade he buys a load of whatever takes his fancy and the seller has four days to deliver it at the starport.


Hans

So, in the Traveller Universe, if a captain says he's going to Regina in 5 days, he has to hope that he can find sufficient freight for his cargo hold, or he's screwed? Per GURPS FAR TRADER, the captain looks for freight going to the destination he wants to head for, or perhaps he looks at all the freight available, and then chooses his destination based on what is available. Only when it comes to passengers, does he need to announce where he's going, and when.

In the real world, we have transportation companies who specialize in hauling freight from one location to another. A truck doesn't want to take a freight lot to Boston from Philadelphia, and then return back to Philadelphia riding empty. Then we have companies that need to move their product from their factory or from their warehouse, to a specified location as part of their sales. They don't have their own transport company (if they did - they'd just ship it!), so they go to a broker saying "hey, we have a shipment lot that we're willing to pay $10,000 to be delivered within 3 days from pick up, and has to be there in five days from today." The company doesn't approach one broker, but approaches three or four, and then waits for results. The broker then, puts out word on their network, that they have a lot that has to be at a given location of a given weight and size - thereby opening the bidding process. If no truckers bid on the lot, then it doesn't get moved by that broker. If a trucker bids too high, the broker doesn't accept the bid. If two truckers bid on the lot, and their reputations are reasonably good, the broker takes the lowest bid, draws up the papers with contingency options that both parties can be made to agree to conditions of terms, and the lot gets moved.

Now for the fun part. The trucker arrives 3 hours late for some reason. He's already behind, but he's the only one who will pick up the load - otherwise, the shipper has to scramble to find someone else to take the load despite it being 3 hours behind schedule. Then, the trucker gets lost midway to his destination. Instead of being behind schedule by 3 hours, he's now going to miss his delivery window at the destination, and they will be closed when he arrives. So now he has to wait another 12 hours before the company opens its doors again. But the trucker forgets to get his paperwork signed properly, and only has partially completed papers. So now he has to go back and get the paperwork completed properly, or he has to get on the phone and work the issue over the phone. What should have been a simple 3 day delivery now took 4 days. Likewise, a shipment that should have been delivered - ends up being delayed by a few hours/days due to weather, or road conditions, or even something as simple as a traffic jam because a president was at a given location and all thoroughfares have been shut down for a time due to security concerns.

Long story short? Unless all of the freight is being kept in the Terminal warehouse, and has been sitting there for a relatively long period of time - taking on freight will have its own potential delays and windows of delivery, just like Cargo does.

[Anthony]

Originally Posted by hal

So, in the Traveller Universe, if a captain says he's going to Regina in 5 days, he has to hope that he can find sufficient freight for his cargo hold, or he's screwed?

The captain shouldn't say he's going to Regina in 5 days unless he thinks he can line up sufficient freight. That's what brokers are for. In any case, he's not 'screwed' per se -- it's just that his loan is a couple kCr/day, so every extra day in port is an extra day of not making money.

Originally Posted by hal

Long story short? Unless all of the freight is being kept in the Terminal warehouse, and has been sitting there for a relatively long period of time - taking on freight will have its own potential delays and windows of delivery, just like Cargo does.

Which is why turnover time in port is 5 days. The regular shipping company probably manages a 24 hour turnover.

[hal]

Originally Posted by hal

How are Tramp Freighters paid?

Originally Posted by Anthony

Whatever means are agreed to in the contract. Usually that will be letters of credit (either CrImp or credit against a reasonably local bank or government), though payment in kind will occur occasionally.

What I was attempting to get at here, was to get people thinking about the process by which the tramp freighter's captain is paid. However, when dealing with "checks" (whether cashier's checks, personal checks, letters of credit, etc), the process requires that the one form of payment be converted to a form by which the captain can make use of it. Holding a letter of credit, if it isn't redeemed, is useless to the captain. He can't make a bank payment with the letter of credit at full face value, if the bank doesn't honor it as money. Likewise, he can't make use of a letter of credit, if it hasn't been released to him for services rendered. He can't just walk in to an office, present his papers, and then walk out in 15 minutes unless the department that handles the payments is a small one and is authorized to make an expeditious payment!

Originally Posted by hal

Think about it. If we're talking about "checks", checks have to clear before the tramp freighter captain gets paid.

Originally Posted by Anthony

Think cashier checks, not personal checks.

The problem with Cashier's checks, is that they are essentially alternative forms of currency issued by the bank without it being "currency". If they are easily counterfeited, the banks will stop issuing them. They work reasonably well when banks accept each other's bank drafts, but the same problems inherent with multi-world accounts comes to the fore here. A bank that honors another institutions draft, without knowing whether said institution can honor that draft, is going to take the fall for the release of funds on that check (whether personal or institutional).

Originally Posted by hal

If a captain is moving freight from one port to another, he has to undergo some process that proves that the freight shipment has met the approval of the shipper/receiver - permitting the funds to be freed and handed over to the ship's captain.

Originally Posted by Anthony

For an actual tramp, this is a big problem, but for a tramp with at least a semi-regular route, either he has a local trade factor who actually handles payment and approval, or it's expected to be resolved the next time he visits.

Most Tramp Freighters can't afford to be "owed" payments. Why? They're already on a tight margin to begin with. Chances are - they won't even be going back to the same port any time soon. So - they need to be paid while they are there, not some time in the future. If that happens too many times, they have a cash-flow problem that, despite in theory, being solvent, they are forced into bankruptcy due to missed payments. What is worse, is the fact that if they have to go to factors to get their issues resolved - they have to pay money to get their money that is owed to them. If the issue requires a court to determine the facts and make a determination, this process can take even longer.

Originally Posted by Anthony

Yeah, that's way too much time wasted in port. None of the problems you identify require the ship to be in-system -- just the local trade factor.

The above statement means you think it should take far less time - whereas, I'm saying it should take MORE time. The presumption is that everything goes like clockwork, nothing bad ever happens, no delays ever occur, no accidents loading the freight ever occur, etc. The plain truth is, nothing ever goes perfectly according to plans, and that delays creep in.

Now, everything I've mentioned thus far, depends a lot on the transportation grid. Grav trucks are essentially aircraft writ large. I've not taken the time to actually BUILD a grav transport truck, and it would be interesting to see just how much one of those things costs, and how much to maintain, etc. If it has to travel 800 miles from point of shipping to the shipping terminal (aka the Starport), such a vehicle could travel the distance in 10 hours if the vehicle can average 80 miles per hour. If the distance is a mere 200 miles and it can travel 200 miles per hour, then that's a transit time of only 1 hour. A LOT depends upon the transportation network! At moderate tech levels - one would expect that it takes time. At high tech levels, it probably doesn't. However, things still go wrong, and theoretical perfect time isn't going to happen all the time.

[hal]

Originally Posted by Anthony

The captain shouldn't say he's going to Regina in 5 days unless he thinks he can line up sufficient freight. That's what brokers are for. In any case, he's not 'screwed' per se -- it's just that his loan is a couple kCr/day, so every extra day in port is an extra day of not making money.

Which is why turnover time in port is 5 days. The regular shipping company probably manages a 24 hour turnover.

For a GURPS tech level 7 world, a 24 hour turn over is NOT the norm in the United States. Brokers are lucky to get a load picked up the same day they advertise it being available, and then have to deal with the pickup time to get the load, transit time to deliver the load, and then the administrative time to get paid for the load. That time (the administrative time) can take up to as much as two weeks. That doesn't include the deadbeats or those who are waiting for sufficient cash to pay the bill having shipped on credit.

Since tramp freighters are being somewhat modeled after trucking (only somewhat!!!), they have the benefits of being relatively small. To put this in perspective? A train that transports 2 semi-trailers of 13' x 48' x 8.5' - using two railroad flatbed cars (for a total of 4 semi-trailers carried), can carry what the Empress Marava carries in its hold without trouble (by my calculations, a semi-trailer's volume is about 5304 cubic feet, or roughly 10.6 dtons of volume). That doesn't much make the Empress Marava the equivalent of an ocean going freighter. In any event, between waiting for bids on existing freight to be confirmed, confirming passengers, taking them on board, getting supplies ordered and delivered, etc - the ship really shouldn't be able to land, get its freight in one day, and take off the next.

[Anthony]

Originally Posted by hal

Most Tramp Freighters can't afford to be "owed" payments. Why? They're already on a tight margin to begin with. Chances are - they won't even be going back to the same port any time soon.

We have a word for tramp freighters who don't return to ports where they're known: 'broke'.

Originally Posted by hal

The above statement means you think it should take far less time - whereas, I'm saying it should take MORE time.

Right. You're trying to add complications to extend an already ridiculously over-length stay.

Originally Posted by hal

For a GURPS tech level 7 world, a 24 hour turn over is NOT the norm in the United States.

Traveller starships are closer to freight planes than ships, and freight planes are unloaded in hours.

[hal]

Originally Posted by Anthony

We have a word for tramp freighters who don't return to ports where they're known: 'broke'.

Right. You're trying to add complications to extend an already ridiculously over-length stay.

Traveller starships are closer to freight planes than ships, and freight planes are unloaded in hours.

Tramp Freighters who don't return to ports are known as broke? <shakes his head>

Real world complications as opposed to unrealistic assumptions that everything goes smoothly? Looks like we'd have to agree to disagree, neither of us believing that the other person is any where near right. :(

As for closer to freight planes than cargo ships, I have to agree with you. FAR TRADER page 58 lists break bulk taking 1 hour per 30 dtons. A 48 dton cargo hold filled with break bulk would take a little over an hour and a half to unload. If the cargo hold were filled with say, six 4A containers each at 8 dtons per, the rules indicate that that hold could be unloaded in a mere 15 minutes (which is on average, one container per 2.5 minutes... <scratching one's head dubiously>

None the less, I've listened to someone who works for a logistics company, and about some of the problems that have come to the fore when there is a conflict between the shipping company, the shipper, and the logistics company. A LINER with a schedule to keep and a presence in one location is far different than a tramp freighter in operations. What you are seemingly describing is more characteristic of a line than a tramp.

[Anthony]

Originally Posted by hal

Tramp Freighters who don't return to ports are known as broke? <shakes his head>

Yes. Fundamentally, slow communications means you live and die on your reputation, and you need to be somewhere long enough to have a reputation. That trade ship no-one has ever seen before, that doesn't have some trusted third party vouching for them, doesn't get any business.

Originally Posted by hal

What you are seemingly describing is more characteristic of a line than a tramp.

A liner hits ports in a specific order on a specific schedule. A tramp doesn't, and may roam over a larger area, but we're still talking maybe a dozen worlds.