The Economics of Piracy

cthia wrote:By comparison. A modern day cargo ship can carry a maximum of 169M DWT. High-grade marijuana sells for $6,000 lb. If a container ship shipped loaded with high grade weed. That would be 169T X 2204.62lb X $6000 = a shipment valued at
$2,235,484,680. Surely there are many items in the Honorverse shipping lanes with values significantly higher than Old Earth pot. Even if it is high-grade weed. And an Honorverse freighter can carry just how much more DWT? (Deadweight tonnage)
<snip>

Cthia, I'm not certain if someone caught it, but your math is off by a factor of 1000.

169,000 tons x 2204.62lbs x $6000 is $2,235,484,680,000, or roughly the US Federal Tax intake for the last 4.5 months

http://www.ibtimes.com/secret-flow-soma ... ts-1454640

A very good look at how real world piracy works.

During the years from 2005 to 2012, 179 ships were hijacked off the coast of Somalia and the Horn of Africa. The average ransom paid was $2.7 million, with ordinary pirates receiving $30,000 to $75,000 each and bonuses paid to those who brought their own weapons or were first to board the ship.

...

The average pirate's pay amounts to only 0.01 percent to 0.025 percent of the average ransom payment, whereas the financiers take in up to 50 percent or more of the ransom. While the pirates face a high risk of being killed or captured, the 0.01 percent they might make -- $30,000 on average -- is 54 times the country's average annual salary of about $550.

Pirate operations can cost anywhere from a few hundred dollars for a small, individually funded operation to tens of thousands for large, multiship operations. Those can cost upward of $30,000, with "professional" funding coming from former military police, civil servants, drug dealers or fishermen, who take big cuts of the haul, sometimes as much as 75 percent.

Nothing about anyone buying a warship capable of blowing up ships of the international anti-piracy forces operating in the area.

The E wrote:...snip...
Assume you intercept a mid-sized honorverse freighter, packed to capacity with goods. Something on the order of 3 or 4 million tons of cargo, or roughly equivalent to the output of one of Earth's bigger industrialized countries for a year. There is no single buyer able to take that cargo off your hands, let alone at book value, so it has to be parcelled off and fed into the shadow economy piecemeal, or held in custody until the shipping company pays a ransom. Neither method will result in quick payouts, and whatever the final payout will be, it's not going to be anywhere close to the book value of the goods.

Meanwhile, your supposed pirate still had to go through the troubles involved in acquiring a capital ship, getting a crew, getting the ship set up for a raiding mission, and for what purpose? The mission you describe doesn't require a Battlecruiser to pull off, a couple smaller ships are perfectly sufficient for it, increasing the overall payout and decreasing the individual risk.

No, cthia. What you describe is something only a terminally stupid pirate would do.

You are missing part of the scaling issues. Not entirely sure if what still works or not works.

One many systems get multiple freighter visits.

Earth has ~200 countries Honorverse has in excess of 2,000.

If a system normally gets a freighter every 60-360 days or whatever there are going to be facilities to handle the glut/famine cycle.

Also you ignore the real problem with Silesia being corrupt governors and shipping firms that would happily tranship to their own ships. Then sell it to other planets.

Just a thought,
T2M

I am absolutely sure that there are successful Pirates out there. Part of being successful is two things. 1) avoid Manticoran or Andermani shipping at all costs, and 2) retire as soon as possible. Part one is why we wouldn't see them in the books. And as for part two... If somebody has the money to purchase, maintain, and crew a BC, they have enough money to retire.

Theemile wrote:

cthia wrote:By comparison. A modern day cargo ship can carry a maximum of 169M DWT. High-grade marijuana sells for $6,000 lb. If a container ship shipped loaded with high grade weed. That would be 169T X 2204.62lb X $6000 = a shipment valued at
$2,235,484,680. Surely there are many items in the Honorverse shipping lanes with values significantly higher than Old Earth pot. Even if it is high-grade weed. And an Honorverse freighter can carry just how much more DWT? (Deadweight tonnage)
<snip>

Cthia, I'm not certain if someone caught it, but your math is off by a factor of 1000.

169,000 tons x 2204.62lbs x $6000 is $2,235,484,680,000, or roughly the US Federal Tax intake for the last 4.5 months

Thanks Theemile. Don't know what happened there. I got your final answer as well. Somehow the cut and paste failed me and I didn't catch it. I remember the number bugged me out. But is why I said, retire and buy a small planet in the Verge.

noblehunter wrote:

What do you think I'm describing? My original premise is 'why aren't there some very rich pirates,' who can afford to at least pimp and trick out their ships - even if they're DD's? Milgrade everything, even coffee!

And what would be the return on investment for all this? Very few people get rich by spending money on low-return high-cost items.

Any pirate smart enough to get rich is smart enough to get out of the business sooner rather than later.

You mean the return on investment of a half trillion dollar "sweet prize" that you want to ensure goes off without a hitch, other than the return of investment of retaining your life?

thinkstoomuch wrote:

The E wrote:...snip...
Assume you intercept a mid-sized honorverse freighter, packed to capacity with goods. Something on the order of 3 or 4 million tons of cargo, or roughly equivalent to the output of one of Earth's bigger industrialized countries for a year. There is no single buyer able to take that cargo off your hands, let alone at book value, so it has to be parcelled off and fed into the shadow economy piecemeal, or held in custody until the shipping company pays a ransom. Neither method will result in quick payouts, and whatever the final payout will be, it's not going to be anywhere close to the book value of the goods.

Meanwhile, your supposed pirate still had to go through the troubles involved in acquiring a capital ship, getting a crew, getting the ship set up for a raiding mission, and for what purpose? The mission you describe doesn't require a Battlecruiser to pull off, a couple smaller ships are perfectly sufficient for it, increasing the overall payout and decreasing the individual risk.

No, cthia. What you describe is something only a terminally stupid pirate would do.

You are missing part of the scaling issues. Not entirely sure if what still works or not works.

One many systems get multiple freighter visits.

Earth has ~200 countries Honorverse has in excess of 2,000.

If a system normally gets a freighter every 60-360 days or whatever there are going to be facilities to handle the glut/famine cycle.

Also you ignore the real problem with Silesia being corrupt governors and shipping firms that would happily tranship to their own ships. Then sell it to other planets.

Just a thought,
T2M

This is what I was getting at when I said it's a shame pirates aren't in the peddler business. Cannot the bin numbers or whatever be redone for seized freighters?

Surely there are entire corrupt systems that are fencers even for a mega load.

You mean the return on investment of a half trillion dollar "sweet prize" that you want to ensure goes off without a hitch, other than the return of investment of retaining your life?

This would be like stealing and selling the Lourve's collection of Da Vinci's via art dealers. It will attract attention by people who have the resources to hunt down the entire chain of people involved, as too many people know too much.

cthia wrote:

Theemile wrote:
Cthia, I'm not certain if someone caught it, but your math is off by a factor of 1000.

169,000 tons x 2204.62lbs x $6000 is $2,235,484,680,000, or roughly the US Federal Tax intake for the last 4.5 months

Thanks Theemile. Don't know what happened there. I got your final answer as well. Somehow the cut and paste failed me and I didn't catch it. I remember the number bugged me out. But is why I said, retire and buy a small planet in the Verge.

The insane thing is a 8.5 Mton freighter can haul 50x your example, or nominally 112 Trillion dollars worth of product. Sadly dumping that much Hashish on a single system would turn it's street value from $6000 to $.06 overnight. Ahhh.... the laws of supply and demand....

A little googling and I found the estimated Hash seized in the US in 2002 was ~1100 Metric tons and the total usage was believed to be ~22,000 metric tons. Just your ocean going freighter would feed the US need for ~8 years.(at a price much lower than $6000 a pound)

cthia wrote:This is what I was getting at when I said it's a shame pirates aren't in the peddler business. Cannot the bin numbers or whatever be redone for seized freighters?

Surely there are entire corrupt systems that are fencers even for a mega load.

Which gets to another problem of scale. There are not all that many of these ships around. A lot of numbers get thrown around but say there a million. We are not talking millions of cars in a country.

If a ship is on a known route it will travel through many systems. Each with their own customs people. Each ship in "class" is supposed to the same. But in actuality they are not. Each ship will have its own quirks and little things that stand out.

A semi competent inspector will notice. So you steal it in Silesia then sell it on the other side of the league there is still a chance that it will hit one of the old places. Silly things that happened to Maryanne will happen. The worm hole networks make the problem both better and worse. This gives someone a chance to spill the beans and the paper trail. Not a good result.

From the Honorverse perspective far better to chop the ship up and part it out. The steel, titanium and other materials are dirt cheap. The compensator, nodes and other such stuff is the cost. Plus now you have much less chance of getting caught because it is that many more serial numbers and such to be tracked. All mostly uniform (sort of) much easier to hide. If anybody even bothers to look at such stuff. Remember the Mesan hyper drive.

Which then get dumped into another freighter and sold to the shipyard in the next system over and no one the wiser. Spare parts or new ship depending on the market.

Just my take on it,
T2M