Based on shipping rate of KCr1/ton how far can you ship goods economically?

MarcusIII

Emperor Mongoose
Scenario: The planet China manufactures iPhones that retail for Cr200 (1977 price). In a 1.5m x 3m x 3m space you can fit about 28,000 packaged phones. For each parsec shipped it costs 3.5 "cents" per phone.

So for relatively small, high priced products you could ship them all over a sector from one planet economically based on macro econ comparative advantage situation like China and iPhone manufacturing.

Something to think about in the T.U.

Thoughts?
 
At this point, it seems generic technology, that you would have to determine how to interest the targetted customer base.

And, the local telecommunications infrastructure, since it would have to operate with compatible standards.

Or worse, get governmental permits, to certify capabilities, like waterproofing.
 
At this point, it seems generic technology, that you would have to determine how to interest the targetted customer base.

And, the local telecommunications infrastructure, since it would have to operate with compatible standards.

Or worse, get governmental permits, to certify capabilities, like waterproofing.
No. see the real world for what happens in the case I presented. But still not relevant macro econ wise
 
If the comparative advantage for making the iPhone was Cr5 (they can manufacture it at a cost Cr5 less than others) then one could ship up to 142 parsecs before it matches the price point of the next best source. Because it only costs Cr.035 per parsec of shipping per phone.
 
So, theoretically one could load up your freighter with these items with a destination 140 or so parsecs away and off you go... It's one way to get your PCs to go somewhere far away getting paid to move.
 
It depends on whether you're selling Apple, Huawei, or Xiaomi.

Apple didn't quite revolutionize cell phones, but it had a built in fan base, established track record, and Jobs was a genius on recognizing trends, and how to get his teams to recreate his vision(s).

Cook, I'm told, is a master logistician, that ensured lowest costs, and that stock was available for the customers to buy.
 
If the comparative advantage for making the iPhone was Cr5 (they can manufacture it at a cost Cr5 less than others) then one could ship up to 142 parsecs before it matches the price point of the next best source. Because it only costs Cr.035 per parsec of shipping per phone.
What's the average population in 142 parsecs of chartered space? How big a market are you talking about? What are the resources on planet 'china'? Do they have enough resources to make 28,000 units of product every 24 weeks (assuming max speed of 6 parsecs of travel per week.) What happens if there is a trade embargo around planet 'china'? Does 142 parsecs worth of population suddenly loose the ability to buy a phone from the source they depended upon, because of a trade embargo (or similar)? Have you factored in the costs of getting shipments from 24 major starports scattered across 142 parsecs, to the actual point of purchase? Can customers afford to wait 24 weeks for delivery, or can suppliers afford to keep bulk stock surplus that is costing them extra money in local storage?
 
What's the average population in 142 parsecs of chartered space? How big a market are you talking about? What are the resources on planet 'china'? Do they have enough resources to make 28,000 units of product every 24 weeks (assuming max speed of 6 parsecs of travel per week.) What happens if there is a trade embargo around planet 'china'? Does 142 parsecs worth of population suddenly loose the ability to buy a phone from the source they depended upon, because of a trade embargo (or similar)? Have you factored in the costs of getting shipments from 24 major starports scattered across 142 parsecs, to the actual point of purchase? Can customers afford to wait 24 weeks for delivery, or can suppliers afford to keep bulk stock surplus that is costing them extra money in local storage?
Planet China has the resources of Earth. The rest of the questions don't really play into the particular question as they apply at all times to all products everywhere. What if a star went nova and took out a few systems?
 
Gunrunning may actually be easier.

Your clients tend to be knowledgeable, and usually have a clear idea what they want, and what you're offering.

If a planet has a decent sized population and industrial base, likely it manufactures electronics.

Within the Imperium you can't have tariffs, but telecommunications is a sensitive area, that in some jurisdictions run up against privacy concerns, and internal security.

If you don't have an established brand, or have a competitive advantage expressed in cache, service, software, or hardware, you'll have to take a hit on sales price.

Also, our experience is based on current trends, and there are lots of brands, despite being innovative, that don't catch on.

You're wondering if you can sell twenty eight thousand generic phones, and the answer is yes, assuming they work as advertized.

As to how much money, or net profit, you make, would depend on the local market.

It sort of reminds me when entrepreneurs took a trip to China, loaded up their personal luggage with graphic cards, and resold them in other countries, through internet forums. The price would be discounted, based on whether there was a shortage, seller reputation, and how much the buyer was willing to risk for dubiously guaranteed hardware.
 
In settings like the 3I the effects of comparative advantage (C.A.) will be particularly felt as the Imperial government will not allow systems to impose tariffs for the purpose of blunting C.A. Therefore, you will find these developing just like here on present day Earth. A couple of countries making all large commercial aircraft. A tiny country producing over 90% of most advanced nodes (under 10nm). Some systems will be known for their precision industrial machinery, etc., etc. Those goods will be shipped far and wide from that one system.
 
Scenario: The planet China manufactures iPhones that retail for Cr200 (1977 price). In a 1.5m x 3m x 3m space you can fit about 28,000 packaged phones. For each parsec shipped it costs 3.5 "cents" per phone.

So for relatively small, high priced products you could ship them all over a sector from one planet economically based on macro econ comparative advantage situation like China and iPhone manufacturing.

Something to think about in the T.U.

Thoughts?
What is the point you are trying to make? That you can fit more small things than large ones in a given space?

Traveller MGT2 does not give quantities of goods per unit volume (you can try and reverse engineer it but it rarely makes any sense) - is that the point? There are no goods that cost MCr5 pr Dton. Common electronics are Cr20000 per Dton and phones are as common as they come. If you are using Cephues trade tables then the number will be differnt but they still won't compare to your example.

Reducing the margins and making prices more attractive by shipping goods from one place to another by cheaper and cheaper mechanisms is arbitrage not comparative advantage. If you can make a phone locally for Cr200.032 then don't need to buy the planet China ones. Presumably the presumption here is that planet China can make phones cheaper than any other planet, but how far does that advantage spread, if they are the cheapest for 10 parsecs it still means that a planet 8 parsecs away can still make them for Cr200.28 and still be better value than a planet China import.

In traveller there are only a few limited conditions that make goods cost a particular amount. The broader you spread your net the more likely you will encounter a planet that has the same advantage. Any systems closer to it than planet China will be better off buying from this other planet as they won't be shipping it as far and their shipping costs will be the same per item/parsec as planet China.

Comparative advantage is concentrating on manufacturing the goods you can make most efficiently, If planet China isn't buying the Cars you make in exchange for their phones it doesn't really apply. You don't mention the other planets and what they might be making that planet China buys (raw materials maybe). If you end up making phones for Cr1 per Dton more, but it means they buy your cars for Cr2 per Dton more than you can sell them locally then the trade benefits both parties and you can leverage comparative advantage. If they are not allowing you to pivot manufacturing to expand you market in things you make efficiency then the requirements to leverage comparative advantage are not met.

The freight cost is not the only consideration. You don't sell individual phones from the container they go through retail. The costs of all that will swamp the Cr0.032 saving on shipping.

Cr200 manufacturing cost is also somewhat meaningless. In MGT2 a mobile phone is arguably an Improved Mobile Comm (CSC p63). That retails at Cr150 when manufactured on a TL8 world. The retail price of one of those at the average world that has a TL12 starport would be less than Cr10. This aligns far more favourably at the packing density you mention with the KCr20-25 per Dton of common electronics. 0.032 is a far greater element of a Cr10 item than a Cr200 item.

Raw materials costs should be in the order of Cr5 per phone (based on the raw materials costs wrt. fabricators), it could be as low as 20% if we allow the 2d6*10% rule) Canny purchasing could reduce the cost of those raw materials further as trade goods swing between 15% and 400% of the base cost. Using those rules we have the cost of raw materials swinging between Cr0.3 to Cr48 per phone. once you have paid for the pattern and other capital costs the manufacturing cost per phone is power and rent. Power costs are negligible at this level. My finger in the air calculation means you can print 2 phones in 2 hours per litre of TL12 fabricator for KCr10 for the fabricator. You need to make 2000 phones to pay for the fabricator and the raw materials to make them over 100 days. You can halve the fabricator cost by using the fab in a quadruple chamber. It will make 8 phones in 8 hours, but you only need to make 1000 so the overall time drops to 50 days.

If planet China is really good at manufacturing, Traveller planetary design rules mean it is not a good source of raw materials and thus it has to be an importer. Any shipped goods will likely pass on the shipping cost to the buyer. That is where you will get your comparative advantage. Planet China is likely industrial but it could also be poor. An Agri or Garden planet which is its best market cannot be poor. For planet China to be the most economical producer it needs to have a low sale cost for its goods but on average it is paying more for its raw materials than its potential customers do. If all they need is a fabricator (and for small goods not much of a fabricator either, it is going to be at a disadvantage.

Of course Comparative Advantage assumes you value work on all outputs at the same level. If you think art is a more important use of your people's valuable time then you might be willing to pay over the odds for mere technology if it frees up your populations time to write poetry. If planet China thinks poetry is a pointless foible they may not value the same amount of work put into poetry as that put into making phones. If the poets need to dedicate 100 hours on poetry get 1 hours worth of phones they would have to be producing phones at less than 1% of the efficiency of planet China before it made sense to trade with them. If they see them as barbarians for not valuing culture they might decide not to trade with them at any price on principle.

Comparative advantage is a fascinating theory of economics, but it is more a tool to generate thought and discussion than a proven paradigm.
 
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I did start an analysis but before I invest too much time, I wondered if there is any point. Manufacturing is ill defined in MGT2 and the relationship between the various trade goods is uncertain. It seems reasonable to assume you need common raw materials to produce common trade goods (like common electronics). HG tells us a smelter needs 2 tons of ore for every ton of raw materials it produces. The base prices of these two commodities tells us that smelting increases the value of Cr2000 of common ore to Cr5000 of common raw materials, so our Industrial planet might prefer to import ore than raw materials.

You would need to determine the steady state price of the various goods. You could assume you are getting a +5 on the price check for a local broker at both ends as this is not a high bar. Even taking their 10% cut into consideration they should be bringing in a 15% price advantage at both ends. We should use the mid point of the dice roll as this will tend to dominate over an extended trade period. So we are looking at a roll of 11 plus the 5 for the local broker minus the 2 for the other broker giving us an average of 14. We then only need to take into account the trade codes.

To make planet China as low cost as possible (if it is more expensive than other producer it won't matter how cheaply it can ship goods) we need the most favourable purchase code an no unfavourable sale code. High Tech is not compromised by other factors and gives us +3 for a long term purchase price modifier of 55% of base price. That comes to KCr11 per Dton but the commission to the broker makes that KCR12.1 in total.

To maximise the profit we need to ship to a non industrial planet again it is not unreasonable that such a planet has no other incompatible trade codes. The long term price would be 125% of base making KCr22.5 after fees.

On the face of it we make KCr10.4 per Dton. We could ship that up to 10 parsecs (at jump 1) at freight rates and still make a small profit. you probably wouldn't though. If a system 3 parsecs away was able to consume your entire production capability why would you choose a smaller profit margin further away.

However if we are talking about comparative advantage we need to take into account local manufacturing capability. Every system has common commodities available and this indicates some local production capability. It may not be as efficient, but it might be more efficient than buying over priced goods from elsewhere. The same broker can source Common Electronics locally at 80% of base value (roll of 11 + 5 for the broker -2 for the other guy and -2 for the unfavourable trade modifier). KCr17.6 after fees (assuming the credit is how we value a unit of labour). On that basis shipping in goods from more than 5 parsecs starts to look uneconomical.

The prices quoted above for locally manufactured items are the prices they are selling in bulk (presumably for export) and represent a surplus. A canny local trader focussing on the local market could logically wait for a surplus to drive the price down even further (i.e. the 3D roll is higher than 11) this is less of an option for a bulk seller as they have stock to move every day. Whilst a roll of 18 is a one in 216 chance the chance of a number greater than 13 are about 1 in 6. The game mechanics indicates he gets multiple chances per month (with -1 for each extra check). With a class B star port (DM+4) on a TL8+ world and a reasonable Admin + EDU (DM+2), you can make 6 checks online before your chances even drop to average so you are likely to hit 14 or more at least once per month but maybe more. Since this is a skill check he can take his time later in the month when it gets hard to get the +2 making success likely (if he works full time he has 160 hours per week to find online markets which is 45 regular checks or 11 taking his time) A roll of 14 would drop the price to KCr14.3 after fees.

So Comparative Advantage using the rules for trade set out in MGT2 (which are less swingy than most) means trade over 2 parsecs starts to become less credible for the cited Common Electronics.

The margins on more expensive goods are larger and therefore it is those that might be a better bet for long distance drop shipping, but you still have the issue that unless planet China is uniquely capable of producing products at a specific price point, eventually there will be one that is closer to their target market than they are.
 
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There's no point in selling cheap hand computers as comms to a planet without a communications infrastructure (let's say TL6 or less). Nor is a planet with a tiny population going to be worth freighting large numbers of these to. If a world has a population of 100,000, you cover every person for the life of the product with... 4 tons of cargo.

However, generally speaking, a planet WITH both a communications infrastructure and a large enough population to be a worthwhile mass market is going to be able to make their own phones.
 
The rest of the questions don't really play into the particular question as they apply at all times to all products everywhere.
Well ... no worries. If you wish to overgeneralise the kind of answers you are looking for, then I am not persuaded to explore the question with you.
What if a star went nova and took out a few systems?
Doesn't exactly happen every week in the life of Jump Travel, does it? Yes, it could happen but the market will likely move on and want more than mobile phones. They will probably want a ticket out of the system(s), and see themselves onto firmer ground. They are not going to be staying there hoping for a different supplier, located on a different, more stable, star system, some 140 parsecs away.
 
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