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Did the MBS corner the market on trade?

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Did the MBS corner the market on trade?
Post by cthia   » Wed May 13, 2020 10:42 am

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House of Steel chronicles a lot of why Manticore leads the galaxy in trade. Of course, the MWJ allows it to do so. The MWJ forced Solarian transshipment companies to severely cut costs to compete. (If compete is what they're really doing after the dust settles.) As HoS agrees, no wonder the SL is pissed.

This is called "cornering the market." It is illegal to do so in the here and now, and certain steps are taken to prevent it. I don't know how things work in the Honorverse on that level, but I always wondered why the SL didn't take steps to try to circumvent it somehow. Well, HoS chronicles ways in which the SL did try to do something about it by supporting piracy initiated by it's transstellars, who were fed up with Manticore's dominance in merchant traffic, and incidentally, because she stuck her nose in the slave trade.

All of this reminds me of our current President's outrage with China over it's trade practices and policies and the steps taken to correct the problem. I wonder why the SL didn't impose some sort of restrictions and taxes on the Manty Merchant Fleet for operating in League space... yadda yadda yadda. The League is large, it doesn't need to carry trade outside its borders and can simply boycott the MBS, can't it?

Well, except for the fact that the MBS also corners an unfair market on information, thus, crucial banking data critical to the markets. Interior lines of communication.

The MWJ can allow it to engage in insider trading which I've always wondered about. They have access to information that could bring companies, entire governments, to it's knees.* Monopolies, insider trading, and cornering the market all come to mind.

Also, since Beowulf is a SL founder and the original Junction treaty with Beowulf is rather lucrative (so lucrative the SK's government contemplated revisiting the original treaty with Beowulf), I don't see why the SL didn't capitalize on those savings by proxy.

But, is it the SK's fault that the MWJ allows it to corner the market on trade? Especially since it is a natural inheritance of the system. Pardon the pun.

Anyway, HoS answered lots of questions, gave birth to others and corroborated some of my long-standing concerns.

*Martha Stewart would have had a field day. LOL

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. Late edits: Grammar Gestapo got to me.
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Last edited by cthia on Tue Oct 06, 2020 2:49 am, edited 3 times in total.

Son, your mother says I have to hang you. Personally I don't think this is a capital offense. But if I don't hang you, she's gonna hang me and frankly, I'm not the one in trouble. —cthia's father. Incident in ? Axiom of Common Sense
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Re: Did the MBS corner the market on trade?
Post by Duckk   » Wed May 13, 2020 11:11 am

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Individual corporations, shipping lines, financiers, etc., may get exercised about the Star Kingdom's merchant fleet and domination of the League's carrying trade, but the vast bulk of the League's citizens -- and the bureaucrats which run the League -- are about as concerned about what Manticore might be doing, or the implications of Manticore's maritime superiority, as the average current day American is over the balance of trade with China. Americans, as a group, generally don't spend a lot of time agonizing over the size of the trade imbalance with the PRC. Most American consumers see that they are getting cheap products, which works well for them as individuals, and that's about the size of it. Members of the American workforce who see jobs (including their jobs) disappearing because of our trade relationship with China -- or believe they see that, at any rate (believe me, I have no desire to get into taking sides in that battle of perceptions!) -- are much more exercised over the trade imbalance. They want protective measures, despite the fact that these will cost other consumers (and they themselves, for that matter) more for the goods currently being produced more cheaply in China.

Most Sollies who actually think about the extent to which Manticore has invaded the carrying trade within the League think of it as a good thing. Why? Because Manticoran freight rates are among the lowest in the entire galaxy. In order to compete with Manty shipping lines, Solly shipping lines are forced to reduce their rates, as well, which means that transportation costs come down, which means that the cost of the transported goods comes down. Because of this, Manticore is regarded as a particularly useful neobarb star nation by a large percentage of the League's citizenry. That doesn't mean they necessarily think well of Manticore, any more than the fact that an American citizen buys a teddy bear for his child with a "made in China" sticker on it means that he approves of Maoist communism. It simply means that Manticore is regarded more in terms of its utility than in terms of the threat it poses
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Re: Did the MBS corner the market on trade?
Post by Brigade XO   » Wed May 13, 2020 2:40 pm

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If you talk about the League Government imposing tariffs on trade with Manticore you have to be really specific about what and how that is going to be done and enforced.

If you mean charging Manticorian ships a fee to opereate in SL space, that fee will essentialy be passed along to either or any parties that are involved with cargo on a MMM ship operating in SL territory. That probably also wouldn't happen out where OFS is in the Verge because if they chare SL Star Nation specific fees that start to look really too much like they have actualy taken over.

Manticore, on the other hand, could retaliate by charging and SL flagged ship an additional fee for juction transit (remember there is ship tonnage and cargo tonnage invollved in the calculation in the rate structures. It could also charge for SL manufactured and or owned goods (or both) for junction transit. Makes a mess for the SL manufactures and shippers trying to trade in places where the fastest or even only practical route goes via the Junction.

There are already various fees and duties which come from interstellar trade that support the SL government and military. As they seem to not already be charging any other Star Nation the basic fees, it gets interesting to single out Manticore.

Before the unpleasentnes between Mancticore and the SL, About the only ongoing prohibitions on wormhole transits deal with warships or flagged vessels of Star Nations at war and that is more in the customs and and export prohibitions. SL not letting -officialy- people sell various things to PRH and Manticore not letting anything PRH use the network.

Customs diffiulties are, well, diverse. Honor pissed off a lot of people by enforcing the SKM regulations (both SKM materials being exported and things prohibited) at Basilisk Station and apparently that may not happen so much for things just going through the Junction which doesn't get inspected quite so well. Same with just wormhole bridges. If it is just passing through and not being either onloaded, off loaded for the local system, the manafests are seemingly enough. The Junction and we should presume the various termini have transhipment warehouses for vessels to drop cargo or take it on which is going other than to that system and where the ship itself is headed. Some would be Bonded Warehouses though that wouldn't make them immune from customes inspection.

At the stage we see before the 1st SKM-PRH war, for the SL to have imposed SKM specific fees on their flagged vessels or goods would have raised a serious problem as way too much of the SL had become used to if not dependent on the lower costs MMM brought to the table . It can't just be the lower Junction fees. Once inside the League- comming in through Beowulf or the Hennesey via Erewhon, the ships had to have some other practical advantages to make them compeditive. We haven't been told that being a MMM flagged ship gets you a reduced rate on the Idaho-Zunker brige for instance.
So what is it? Lower construction and repair costs at Manticore? More efficient and durable equipment leading to lower operating expenses? Better operationg practices? Lower insurance rates (typicaly a combination of factores but if you are going to Silesia the rates might be higher than to the Core Worlds due to Silesia piracy etc difficulties. Lower financing rates? We aren't told. But even some of the Transtellar Shipping Lines lease MMM ships and crews for their routes so there must be something.
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Re: Did the MBS corner the market on trade?
Post by Jonathan_S   » Wed May 13, 2020 5:18 pm

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cthia wrote:House of Steel chronicles a lot of why Manticore leads the galaxy in trade. Of course, the MWJ allows it to do so. The MWJ forced Solarian transshipment companies to severely cut costs to compete. (If compete is what it's really doing after the dust settles.) As HoS agrees, no wonder the SL is pissed.

This is called "cornering the market." Which is illegal to do in the here and now, and certain steps are taken to prevent it.

Individual countries may have laws against cornering the market - but there aren't international laws against a country, or collusion of countries, cornering a market. See OPEC who for decades had effectively cornered the market on oil and still controls a very large part of it.

If Egypt wanted to charge enough for foreign container ships to go through the Suez canal they'd probably drive major container ports on each end that did little but transfer containers from foreign ships to Egyptian ones just to go down the canal. Because even with the cost and inefficiency of doing that, it's still better than paying to send those foreign ships all the way around Africa instead. That's basically how Manticore cornered the shipping market. For anything going through their wormhole network the fees for Manticoran hulls are enough lower than the fees for foreign hulls that it's cheaper to transfer the cargo to them even with League shippers handle the majority of the shipping on each end.

The League could raise prices on Manticore merchants making pick-ups or deliveries in League space. And that would trim back their operations some. But because Manticore sets the fees for Junction use (as well as use of some of the other wormholes they discovered that form the larger network) and because the orbital warehouses at the Beowulf junction are in Manticoran territorial space (they found it and Beowulf signed a treaty affirming that Manticore owns the area around that terminus) the League can't set fees there. So all that would happen is League shippers would pick up a bit more of the "last mile" shipping but the same volume of League to League goods would still flow through the Junction (because of the time savings) and for that hop the same overwhelming percentage would still travel on Manticoran hulls because it's cheaper to pay to transfer the cargo than it is to pay to take it yourself.
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Re: Did the MBS corner the market on trade?
Post by Brigade XO   » Thu May 14, 2020 10:48 pm

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Another piece of the influence of the Junction is that is really isn't as simple to have an SL flagged ship move goods to a transfer point and move that over to a SEM flagged ship and do the reverse at the other end of the transit through the Junction.

1st you have the transfer costs at both ends and then you would also end up with things that hung in the transfer warehouses till there was space for the goods on a ship going in the proper direction. That would be at either way in your shipping matrix.

How many ships are going to not want or need to do that? Lets say that is before the Haven-Manticore wars. You are shipping things out to beyond Manticore. Not only is the physical transfer- even just ship to ship without the need to park it at a warehouse platform expensive, it is going to take time. And time on the journey is a compeditive component. So it is likely that for any given ship going through the Junction out beyond the Manticoe System, most of the goods on-board are probably bound for something out in the direction of Haven or Silesia.

Same for the traffic the other way- it would be faster to just keep the ship heading through instead of offloading. Do many ships drop or pick up cargo on either side of a Junction wormhole. Sure. but I would guess the majority of any cargo capasity is headed elsewhere and at least time routing. Anything for Manticore or Beowulf or that needs to go where can be dropped at a warehouse and the ship either then join the transit queue or it takes cargo through and drops it on the other side before heading on it's schduled route.

Otherwise you need more ships, at least for the League flagged vessels or you have a deal with somebody on the other side of the Junction to pick the stuff up. Why, because you have created a pair of transshipment points unless you are willing to pass the fees for the rest of the delivery service to the Manticorian flagged ship that take stuff through the wormhole.
Gets messy. Well, your crews who never get further than Beowulf will get home more often :) perhaps

With the Panama Canal, untill they opened the new, larger sized, locks, a lot of containerized goods were dropped at one end, moved by rail to the other and then put on a different ship- effectively you had two sets of ships loading and unloading at each end of the canal. One reason was the size of the ships- too wide. long and or drew too much depth to fit through the canal. The other was that there was a maximum number of transits each way for in numbers per day of ships that could fit through it. So the Panama Canal Railroad and it's two intermodal yards handled the transfere.

It's not just there. A lot of goods cross the US or Canada on that same kind of rail-bridge to move containers to one coast of North American and get reloade onto a ship or ships on the other coast. Not only because the initial vessels are too large for the canal, but becaue the only other alternatives include going around Cape Horn or Good Hope and that is back into the time/distance and sea conditions....ake Money, Deliver speed and safety.
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Re: Did the MBS corner the market on trade?
Post by cthia   » Fri May 15, 2020 2:09 pm

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Brigade XO wrote:If you talk about the League Government imposing tariffs on trade with Manticore you have to be really specific about what and how that is going to be done and enforced.

As usual, a very insightful post Brigade. And you are right about needing to be specific, but I don't have specifics. It's an issue that requires lots of input, data, and experts in Honorverse finance and trade. It seems to be an ugly matter topically, though, and I have always sympathized with the Sollies on this issue.

Brigade XO wrote:If you mean charging Manticorian ships a fee to opereate in SL space, that fee will essentialy be passed along to either or any parties that are involved with cargo on a MMM ship operating in SL territory. That probably also wouldn't happen out where OFS is in the Verge because if they chare SL Star Nation specific fees that start to look really too much like they have actualy taken over.

Yes, some sort of tariffs on goods and fees to operate in SL space.

I was thinking that each system or port of call would have agents checking manifests, etc., and fees charged according to freighter and cargo weight and additional taxes levied based on specific cargo. Much as Manticore does itself.

Brigade XO wrote:Manticore, on the other hand, could retaliate by charging and SL flagged ship an additional fee for juction transit (remember there is ship tonnage and cargo tonnage invollved in the calculation in the rate structures. It could also charge for SL manufactured and or owned goods (or both) for junction transit. Makes a mess for the SL manufactures and shippers trying to trade in places where the fastest or even only practical route goes via the Junction.

No doubt Manticore would have retaliated, and a trade war, not unlike what we presently have with China, would kick off. America won against China because China's economy is more dependent on us. I'm thinking the SKs economy depended more on the SL than vice versa. The SK made its fortune on the backs of the thousands of SL systems, mostly. It's also why I said, as far as trade goes, the SL could have boycotted the MWJ. It shouldn't have NEEDED to trade with planets in Neobarbaria. I'm thinking the SL could have waited them out.

Brigade XO wrote:There are already various fees and duties which come from interstellar trade that support the SL government and military. As they seem to not already be charging any other Star Nation the basic fees, it gets interesting to single out Manticore.

True, and what an interesting observation. It also parallels incidents that happened right here in America when we banned certain auto imports being sold too cheaply in America. American auto makers couldn't compete with a $7000 luxury car. Our current president is presently trying to get on top of it by calling it a National Security risk.

Brigade XO wrote:Before the unpleasentnes between Mancticore and the SL, About the only ongoing prohibitions on wormhole transits deal with warships or flagged vessels of Star Nations at war and that is more in the customs and and export prohibitions. SL not letting -officialy- people sell various things to PRH and Manticore not letting anything PRH use the network.

Indeed. The precedent had long been set. Some sort of restrictions should have been emplaced to prevent the SL from being exploited, regardless of "cheap prices of goods" in the long run, for the betterment of SL owned companies. The same American greed and fixation on cheaper prices is what allowed China to invade the American market to the exclusion of American interests. We were our own worst enemy. There are many areas where the SL could have corrected the problem, but it'd take a team of professionals to sort it all out. In fact, the experts had their problems as well. HoS states the SK had issues with the original treaty with Beowulf over the juncion being too advantageous for Beowulf.

Brigade XO wrote:Customs diffiulties are, well, diverse. Honor pissed off a lot of people by enforcing the SKM regulations (both SKM materials being exported and things prohibited) at Basilisk Station and apparently that may not happen so much for things just going through the Junction which doesn't get inspected quite so well. Same with just wormhole bridges. If it is just passing through and not being either onloaded, off loaded for the local system, the manafests are seemingly enough. The Junction and we should presume the various termini have transhipment warehouses for vessels to drop cargo or take it on which is going other than to that system and where the ship itself is headed. Some would be Bonded Warehouses though that wouldn't make them immune from customes inspection.

At the stage we see before the 1st SKM-PRH war, for the SL to have imposed SKM specific fees on their flagged vessels or goods would have raised a serious problem as way too much of the SL had become used to if not dependent on the lower costs MMM brought to the table . It can't just be the lower Junction fees. Once inside the League- comming in through Beowulf or the Hennesey via Erewhon, the ships had to have some other practical advantages to make them compeditive. We haven't been told that being a MMM flagged ship gets you a reduced rate on the Idaho-Zunker brige for instance.
So what is it? Lower construction and repair costs at Manticore? More efficient and durable equipment leading to lower operating expenses? Better operationg practices? Lower insurance rates (typicaly a combination of factores but if you are going to Silesia the rates might be higher than to the Core Worlds due to Silesia piracy etc difficulties. Lower financing rates? We aren't told. But even some of the Transtellar Shipping Lines lease MMM ships and crews for their routes so there must be something.

Indeed. My guess is the availability of goods not found in the SL. Like furniture made of special woods. Metals sold cheaper because of an abundance. Foodstuffs grown only on certain planets, etc. But I can't imagine anything came via the MWJ that was critical to Solarian life. The critical nature of timely banking info withstanding. The SL allowed the SK to grab and hold them by the balls. And now they're squeezing. Is it too late for the SL to plug the leak in the lake, like America?

Again, another outstanding post, which requires my brain cells to hold hands much tighter. And there's already another. As my English friends across the pond say "Brilliant!"

Son, your mother says I have to hang you. Personally I don't think this is a capital offense. But if I don't hang you, she's gonna hang me and frankly, I'm not the one in trouble. —cthia's father. Incident in ? Axiom of Common Sense
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Re: Did the MBS corner the market on trade?
Post by ThinksMarkedly   » Sat May 16, 2020 12:20 am

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cthia wrote:Indeed. My guess is the availability of goods not found in the SL. Like furniture made of special woods. Metals sold cheaper because of an abundance. Foodstuffs grown only on certain planets, etc. But I can't imagine anything came via the MWJ that was critical to Solarian life. The critical nature of timely banking info withstanding. The SL allowed the SK to grab and hold them by the balls. And now they're squeezing. Is it too late for the SL to plug the leak in the lake, like America?

Again, another outstanding post, which requires my brain cells to hold hands much tighter. And there's already another. As my English friends across the pond say "Brilliant!"


I don't think the problem for the SL is nearly as dire as you put it. There are two components to Manticore's dominance: the Junction and its Merchant Marine Service.

The Junction is the single most transited spot and with a network of bridges and junctions connecting to allows short transit time. But I don't thin it's essential. The League can survive without the Junction transits, it just needs either more time or more ships transporting. As you said yourself, interstellar shipping is not done for anything critical or with a short shelf-life. If cargo instead of taking 2 months with the Junction takes 3 to arrive, it's survivable. It just means more ships and more capital.

The RMMS is a different story. RFC made it clear that the size of the RMMS is completely disproportional to the system. So let's say Manticoran hulls represent one third of all shipping inside the League. That's a lot, but again it's something the League could surmount. So again it's not a national security risk by itself, though it comes close. And taxing Manticoran freight is not going to solve it: what the League needs to do is invest in their own fleet.

What made Lacoön deadly was the combination of those two, with two more factors: the suddenness of how it happened at the worst time possible (when League expenditure was skyrocketing due to the war) and the fact that the RMN seized a a lot of other wormholes. So it wasn't just the Manticoran assets that the Manticoran government could control in peace time. It was war.
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Re: Did the MBS corner the market on trade?
Post by TFLYTSNBN   » Sat May 16, 2020 1:29 pm

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ThinksMarkedly wrote:
cthia wrote:Indeed. My guess is the availability of goods not found in the SL. Like furniture made of special woods. Metals sold cheaper because of an abundance. Foodstuffs grown only on certain planets, etc. But I can't imagine anything came via the MWJ that was critical to Solarian life. The critical nature of timely banking info withstanding. The SL allowed the SK to grab and hold them by the balls. And now they're squeezing. Is it too late for the SL to plug the leak in the lake, like America?

Again, another outstanding post, which requires my brain cells to hold hands much tighter. And there's already another. As my English friends across the pond say "Brilliant!"


I don't think the problem for the SL is nearly as dire as you put it. There are two components to Manticore's dominance: the Junction and its Merchant Marine Service.

The Junction is the single most transited spot and with a network of bridges and junctions connecting to allows short transit time. But I don't thin it's essential. The League can survive without the Junction transits, it just needs either more time or more ships transporting. As you said yourself, interstellar shipping is not done for anything critical or with a short shelf-life. If cargo instead of taking 2 months with the Junction takes 3 to arrive, it's survivable. It just means more ships and more capital.

The RMMS is a different story. RFC made it clear that the size of the RMMS is completely disproportional to the system. So let's say Manticoran hulls represent one third of all shipping inside the League. That's a lot, but again it's something the League could surmount. So again it's not a national security risk by itself, though it comes close. And taxing Manticoran freight is not going to solve it: what the League needs to do is invest in their own fleet.

What made Lacoön deadly was the combination of those two, with two more factors: the suddenness of how it happened at the worst time possible (when League expenditure was skyrocketing due to the war) and the fact that the RMN seized a a lot of other wormholes. So it wasn't just the Manticoran assets that the Manticoran government could control in peace time. It was war.


It is not unprecedented for shippers to travel vast distances to bypass choke points if they can save cost by doing so. I would refer people to this article:

https://en.wikipedia.org/wiki/Suezmax

Given the distances and transit times between Europe or the East coast of North America to Eastern Asia, the marginal cost of bypassing the Suez canal is not devastating. The same is true for the Panama canal. There are a lot of cargo ships operating that can not use the canals.

Weber's comments about the risk of locking down the MWJ with mass transits suggests that Manticore might regulate ship displacement to avoid lockdowns. If this is true then it is possible that there are some ships operating that are so massive that they have to make their entire journey through hyperspace without ever transiting a wormhole. Possible cargos would be very large fabrication modules that can produce SDs.
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Re: Did the MBS corner the market on trade?
Post by Galactic Sapper   » Sat May 16, 2020 5:27 pm

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TFLYTSNBN wrote:Weber's comments about the risk of locking down the MWJ with mass transits suggests that Manticore might regulate ship displacement to avoid lockdowns. If this is true then it is possible that there are some ships operating that are so massive that they have to make their entire journey through hyperspace without ever transiting a wormhole. Possible cargos would be very large fabrication modules that can produce SDs.

This is extremely unlikely, as current warship tonnages are limited by the technical capacity of compensators. Anything much larger than an SD would be effectively unable to move at all, as compensator efficiency drops to zero well below 10 million tons.
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Re: Did the MBS corner the market on trade?
Post by Brigade XO   » Sat May 16, 2020 5:38 pm

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A couple of points.
If you are shipping things somewhere, you really really really want to find something to ship back. About the only ships in wet merchant marine fleets that travel empty half the time are oil/gasoline and natural gas tankers. Sure, auto-carriers might do it but I am going to guess that some of them are taking various non-perishable cargos back to their nominal home ports to at least offset expences.

Certainly freighters in the Honorverse are going to want to have something onboard for the back-haul and really would like that to make a profit. We see a LOT of ships going place on regular routes, dropping off and picking up cargos at each stop. That would probably also include at each wormhole bridge they are using. If your selling stuff to customers in Silesia you book space on freighters going there and, if you have agents working for you out there, you probably are giving them lists of things you would like them to aquire for you to ship home at a profit. The freighters them selves (or their shipping lines) also operate through brokers.
This is not all that different in concept than interstate trucking though the volumes of goods is vastly higher.
If the normal MMM freighter has more efficent engines etc and lower opeating costs, then it will pick up business. There are independt ships out there (even Manticore flagged ones- we have seen them) but they compeat well against the shipping in the league or that goes in and out of it.

Remember that neither Manticore as a Star Nation nor the League operates the freighters. These are private companies (and that counts those which are publicly traded on various stock exchanges. You do this to make money. If your system doesn't build (and perhaps had no facilities to repair starships, you have to buy a freighter from someone elce or have it built. You also have to have a reason to want to operate a starship to haul goods (and some people) around. You might decide that it will be cheaper in the long run to have your own ships to deliver your products to other -typicaly with regular customers- star systems and put together a little shipping company with like minded manufacdturers. You can grow from there.
Then there are costs. We have been shown that at least one Transtellar shipping line leases MMM ships (with crews) for part of what they do. The LEASE them, now own them and are not saddled with the capital expenditures and related things although there are probably clauses for repairs/maintence etc and have to deal with fuel and personel costs and port fees. The MMM flagging give them the lower Junction costs and probably lower fees on things like the Idaho-Zunker bridge. I would not be surprized that we could find that retired RMN could get favorable loan rates or assistance in purchased on new or used Manticorian Built starships- the government does know where it gets income from and you do have that massive pool of tranined and still proficient spacers for your reserves.
If Manticore is building transports that are even a little (and I think they may be a lot better) than the run-of-the-mill Solly produced ships) you get more efficiency which helps lower costs.
As time went buy, the developing networks of local agents for various Manticore based lines are also acting as freight brokers (and we have seen that they will informally help each other when someone doesn't have a local agent or factor in a system) so it builds on itself.
These are not LINERS. These are very large cargo carriers which typicaly will have some capasity for private passengers and are happy to book passengers anywhre the ship is going.
So, yeah, more aggressive marketing, lower or equal costs, access via transfer (including via the Juntion) to move goods to almost anywhere.... works for me :)
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