Implied Setting: The Cost of Trade

[rustic313]

The purpose of this post is to document a few observations on how the implied setting works with regard to trade and transportation between strongholds.
  

Alternatively:  A Rousing Game of Papers & Paychecks, where you play the role of a medieval financier's guild insurance adjuster!


ASSUMPTIONS

ECONOMY: As a caveat up front, I use a silver standard; 1 SP in this post = 1 GP in the original RPG. If you don't like that, just read all "SP" as "GP." I may also refer to shillings and pounds; 60 SP = 20 shillings = 1 pound (L).



I have updated my price list using the medieval sourcebook and James Rogers "A History of Agriculture and Prices in England."



MAP: I assume each hex is two leagues across (about 6 miles).



ORIGINAL SOURCE DATA: Based on some research I had squirreled away, I had the following prices for actual 14th century transport costs in England.

Hired Cargo (per ton per 60 miles) on safe roads in good conditions 18
SP

Hired Cargo (per ton per 60 miles) on safe rivers or coast in good conditions 3
SP

Hired Cargo (per ton per 60 miles) across open ocean 15 SP



I believe the source was Rogers but I can't quote that for sure. So we'll just use that as a "check" on our math throughout.



PROBLEM #1: COST TO TRANSPORT CARGO WITHOUT DANGER

The first question is "how much does it cost to move stuff without taking into account hazards?"


The BLUF answer is: 5L per ton in fixed "one time" costs; 1L per ton to transport 1-3 days (~10 hexes on land).



To answer that, there are both fixed and variable costs.



For fixed costs, we have wagons and the team to pull them, or a ship. My estimate is that a wagon with four nags or ponies will transport a ton. The cost for this based on the medieval sourcebook and Rogers should be 35 SP for the Wagon and 50 SP per draft horse for a total of about 235 SP. We'll round it off to 4L. Using the Men and Magic price lists, a wagon is 200 SP and draft horses are 30 SP each, so the total would be 320 SP, or about 5.5L. Not far off. Let's just call it 5L per wagon.



We also have the costs that vary per day. We'll assume that our wagons travel in a caravan of about six. Let's further assume that each wagon needs a semi-skilled teamster (9 SP/week) and an unskilled helper (3 SP/week), and the entire caravan has a journeyman-type (15 SP/week) and a master (21 SP/week) to oversee it all. That brings our labor costs to 108 SP per week. We also need to account for room & board, which we'll estimate at 120 SP for the whole lot. Fodder for the animals we'll estimate as 50 SP/week. That means our expedition costs about 280 SP/week, or about 4.5L. There's always additional expenses, so let's round it to 5L.



Of course, we may also need security. A typical medieval formation would be a "lance." That means hiring a F3 (30 SP weekly), a mounted serjeant (20 SP/week), two crossbowmen (6 SP each) and 1d6 light foot (4 SP each), which is 74 SP. Their room and board would be another 50 SP or so, which brings security to about 2L. A single lance is not enough to deal with wilderness enounters (30-300 bandits, dragons, etc!) but it is sufficient to deter petty theft and perhaps entitle the expedition to a reaction roll.



The duration of the expedition is obviously variable depending on the distance traveled. But let's assume that a typical trip to load goods, transport them to a nearby stronghold 1-3 days distant, and then unload and sell them takes a week in total.



That means our cost to transport 6 tons of cargo is 24L up front for the six wagons and ponies, plus 7L per weekly trip for payroll and room & board. We can keep the math simple and just say that it costs about 1L to transport 1 ton of cargo 1-3 days distance. If we assume that a day's journey covers 5 hexes for mixed wagons & baggage, then a "typical" journey might be about 10 hexes, or 50 miles.



Now that we've got that figure, if we check against our numbers from Rogers, we see that "hired cargo, good roads, one ton, per 60 miles" is 18 SP. Which is about 1L. Close enough in my mind!


PROBLEM #2: HAZARDS AND RISKS

The next question is "what is the danger of losing the cargo en-route?"

The answer is, "There is a 1% chance of losing the cargo (and caravan) for each open hex traveled, and a 0.43% per hex of paying a hefty toll (100-600 SP).  More difficult terrain is significantly more dangerous (Forest Path 2x, Forest 4x, Desert 4x, Mtn Path 6x, Mtns 9x, Swamps 12x).  Instead of calculating chances to pay a fine, you can simply assume 2 SP per open hex must be paid in various tolls, extortion, etc (multiply by the hazard factors above for rough terrain).


This was a real problem in the middle ages. If you research the history of insurance you'll find rates from 1-15% on up to indemnify traders and investors from the risk of bandits, pirates, storms, etc. Luckily for us, we can play a round of "Papers and Paychecks" and be Fantasy Insurance Adjusters to evaluate the hazards.



We will begin by calculating the risk for travelling across an open hex, then go from there.



The total risk can be expressed as follows:

P (Encounter) * P (Threat) * P (Did not Surprise) * P (Fail to Evade) * P (Reaction)



P (Encounter)

The first variable is, "Does an encounter occur?" Our party can traverse five open hexes per day. On each day of travel there is a 1/6 chance of having an encounter on an open hex. So the chance of an encounter on any given open hex is 1/30.



P (Threat)

Not all encounters are hazardous. Some, such as those with normal animals, may be unremarkable. Others may even be friendly (gold dragons, werebears, etc) unless the caravan is carrying illicit chaotic contraband. Looking at the U&WA tables, I'm comfortable saying that about 1/4 encounters are neutral to friendly, and 3/4 are potential threats.



Therefore the chance of an encounter with a potential threat on any given hex becomes 3/120, or 1/40.



P (Did Not Surprise)

If the caravan achieves surprise then they theoretically can avoid an encounter. This seems unlikely at first for wagons to surprise anyone, but consider that perhaps the armed guards are scouting ahead at least part of the time. We can say that 1/6 of the time, the caravan achieves surpise. Thus 5/6 of the time the caravan fails to gain surprise.



Therefore the chance of an encounter with a potential threat without surprise becomes 5/240.



If there is no surprise for the caravan, there are two additional options: one is that the caravan itself is ambushed, the second is that no surpise exists. Thus:

- Caravan Ambushed by Potential Threat: 2/240

- Caravan Encounters Potential Threat: 3/240



P (Did not Evade)

So long as the caravan is not ambushed there is a chance to evade. This is about 1/3, depending on the numbers involved. That means the caravan fails to evade 2/3.

- Caravan Encounters Potential Threat and Fails to Evade: 6/720 = 1 / 120



P (Reaction)

Finally, there is a chance for a reaction roll to negate an encounter. I think it is fair to say that a "negative" reaction roll leads to the caravan being attacked, a "neutral" roll indicates a toll is extorted, and a positive roll indicates the caravan is unmolested. Looking at the 2d6 curve, about half of results are neutral and the other half are split between negative and positive results.

- Caravan Encounters Potential Threat, Fails to Evade, and is Attacked: 1/
480

- Caravan Encounters Potential Threat, Fails to Evade, and is Extorted for a Toll: 2/
480

- Caravan Encounters Potential Threat, Fails to Evade, and Gets Positive Reaction: 1/
480



SUMMARY OF RESULTS (OPEN HEXES):

- Caravan Encounters Threat and is Ambushed: 4/480 = 0.83%

- Caravan Encounters Threat and is Attacked: 1/480 = 0.21%

- Caravan is Extorted for Toll: 2/480 = 0.42%

- Caravan has Positive Reaction: 1/480 = 0.21%



To summarize, for any given "open" hex there is a 1.67% chance of an encounter occurring which is not avoided. If one of these encounters occurs, there is a 4/8 chance that the caravan is ambushed (probably a total loss of cargo), a 1/8 chance it is attacked (probably a total loss of cargo), a 2/8 chance that a toll is extorted, and a 1/8 chance that the baneful encounter is avoided.



Other types of terrain are more hazardous because (1) they are slower to traverse, (2) the odds of encounters are higher and (3) the encounters are often nastier.



We can get a rough idea of these odds by multiplying our base chance for a lethal encounter (1%) by (1) the move factor of the hex and (2) the chance of an encounter on that hex. For example, forest has a move factor of two, and encounters occur twice as often. Thus the forest hex is four times as dangerous (2x2) as an open hex.  Thus on a forest hex the chance of an encounter becomes about 4%.



OPEN: 1%
FOREST (PATH): 2%
FOREST: 4%
MT PASS: ~6%
MT: 9%
SWAMP: 12%


Finally, we need to find a way to incorporate the "neutral" encounters where some sort of fine is extorted.  We can do that by generating percentages for such an encounter (they're about 2/5 the %s above), or we can simply average out the chance of being extorted across each hex to generate a fixed cost.  The average fixed cost to traverse each hex type would be 350 SP (an average "toll") times the chance of a "neutral" encounter.

OPEN: 1.5 SP

FOREST (PATH): 3 SP
FOREST: 6 SP
MT PASS: 9 SP

MT: 13.5 SP
SWAMP: 18 SP


To simplify that, you could just say that the average fixed cost to traverse these hexes costs double the % chance of a lethal encounter (2 SP per open hex).

So there is your insurance adjuster numbers!

CONCLUSIONS
Trade in the base game in roughly the same price as it was historically (1L per ton per ~20 leagues -- or 1 SP per ton per league).  The risk of travelling on open hexes is small but non-trivial.  As one moves into rougher terrain, the risk becomes extremely high.  Traversing mountains and swamps in particular is very dangerous.  Longer routes are also quite dangerous.  As a general rule of thumb, no trade routes should traverse more than one or two mountains or swamps without a huge risk premium attached.  The stronghold in the middle of swamps on the outdoor survival map is quite isolated!

[delta]

Thanks for sharing this! Here's two little details I'm noticing that perhaps you can easily fix:

One, at the end of Problem #1, you assert that the price per ton per sixty miles is, "18 SP. Which is about 1L". But the first assumption is that 60 SP = 1 pound (L).

Two, under Problem #2, Reaction, it might be arguable whether reaction rolls are called for in the presence of a naturally hostile encounter. E.g. Vol-3, p. 12 (avoiding dungeon monsters) says, "Monsters will automatically attack and/or pursue any characters they 'see', with the exception of those monsters which are intelligent enough to avoid an obviously superior force." This is of course subject to individual DM interpretation, but my reading is to have almost all hostiles attack automatically by default.

[rustic313]

May 26, 2019 17:19:00 GMT -6 delta said:

Thanks for sharing this! Here's two little details I'm noticing that perhaps you can easily fix:

One, at the end of Problem #1, you assert that the price per ton per sixty miles is, "18 SP. Which is about 1L". But the first assumption is that 60 SP = 1 pound (L).

Two, under Problem #2, Reaction, it might be arguable whether reaction rolls are called for in the presence of a naturally hostile encounter. E.g. Vol-3, p. 12 (avoiding dungeon monsters) says, "Monsters will automatically attack and/or pursue any characters they 'see', with the exception of those monsters which are intelligent enough to avoid an obviously superior force." This is of course subject to individual DM interpretation, but my reading is to have almost all hostiles attack automatically by default.

Great points. The first is an error, good catch.

To put a little more thought behind it, the cheapest travel using the math I worked out would be 4.5L per 6 ton caravan travelling for a week, with no armed security. That brings the "rock bottom" price to 0.75L per ton.

One could reduce costs somewhat by assuming larger caravans, but we are still arriving at a number that is about double the historic carriage rates. It's also possible that I assumed too many people: maybe it's just a single teamster per wagon instead of a journeyman and a helper. Finally, a caravan might get 4 good travel days in a week instead of 2. That would really bring the cost per league down. I think that is reasonable for well established routes where finding buyers and sellers is easy and takes little time.

So perhaps as a nod to reality we can reduce the carriage costs to 1L per ton per 20 or even 30 open hexes. That gets us much closer to the 18SP historical figure.

For the second issue, I am generously assuming that the presence of armed security led by a F3 entitles a caravan to a reaction roll. There is after all some degree of uncertainty about level of threat; all the monsters know is there is at least one heroic type in full plate, well mounted. It could be a F7 for all they know.

If you dont like that assumption then you can just assume all "extortion" results become a complete wipe of the caravan.

[rustic313]

Addendum to Part 1: I did some more research for historical transport costs.

Reference: Masschaele, James. "Transport costs in medieval england." The economic history review. May 1993. Available on JSTOR free.

He concludes that transport cost 1.5d per ton mile (land), 0.7d per ton mile (Inland waterways), and 0.2d per ton mile (sea). He highlights the ratio of 8:4:1 for these costs as a rule of thumb.

With 4d per SP, that equates to about:
8 sp per ton-20 miles (land)
4 sp per ton-20 miles (coastal)
1 sp per ton-20 miles (ocean)

That is way cheaper than our "1L per ton" model, so it's either back to the drawing board for part one, or accepting that out setting has way more friction than is historical.

[rustic313]

There is another cost for trade in our setting: the "tolls" exacted by NPC stronghold leaders. Fighters charge a toll of 100-600 SP, which is 1.66-10L (average of 5.8L). That seems quite high. For example, a caravan of 12 wagons with 12 tons of food might be worth about 14.4L. A toll of 5.8L is thus a 40% exaction!

This toll makes sense in two contexts, historically speaking.

First -- Lords would often exact arbitrary tolls from travelers. These theoretically paid for security, bridges, roads, etc. They could be quite high.
Second -- English Customs. The British Monarchy by the mid-14th century started to lean on customs duties quite highly. One (hated) tax was the "maltolt" which was imposed on wool. The maltolt was 40s (2L) on a sack of wool, with a sack being worth about 4-8L (usually 4-6). This is a tax rate of about 40% -- the same as our 100-600 SP toll!

The implications are thus:
- If NPC merchants are paying full freight, then there is a lot of "friction" in the trade system. Only the largest or most precious cargoes are worth transporting.
- The wilderness must be quite dangerous to justify paying a 40% fee for "security" through more settled lands. As we've seen in the previous posts, wilderness travel can be at times quite hazardous, but not necessarily a 40% risk of losing the cargo for many routes.
- Merchants are probably willing to pay no more than 100-600 SP for guards for their caravans that route through the wilderness to avoid these taxes. This leads to opportunities for the PCs to be hired to guard a caravan that skirts a Lord's stronghold, opting for riskier wilderness over the extortionate toll. But the potential compensation has to be less than whatever the local lord is likely to be charging.
- Smuggling and tax evasion must be rampant.
- For the safer routes -- guilds or trading leagues have likely negotiated discounted rates with the local lords, which then allows them to corner markets in certain areas. These syndicates are probably rather powerful. The savings in transport costs probably don't translate to the locals as the syndicate likely pockets the net profits.
- These high levels of taxation are unpopular. The maltolt was reviled in England.
- In areas where certain goods must be imported, price increases of 40%+ are not unreasonable due to the cost of either "protection taxes" or hazard insurance unless there is some reason to bring the prices down (lots of competition with different import/export routes, robust black market, lords of similar alignment have negotiated a "free trade zone," generous syndicate such as a church that controls the trade monopoly, etc).