Friday, January 16, 2009

Marlboro Economics

We have been spending the last few days at anchorage off Venezuela. It is a welcome change as the crew had a lot to do in the days preceding that. The days begin beautifully, but by the time the people ashore get ready to bring us in, the wind picks up and the berthing gets cancelled. Acts of god, we call it out at sea. J

A long time back, my elder brother told me about “Burger Economics”. It seemed that with the rapid spread of Capitalism, a whole new branch of economics was coming up dealing with the pricing mechanism of McDonald’s Chicken burgers. You see, as McDonald opened new stores in new countries, it used local ingredients at local prices and then had to charge a price for its burgers which normal people would pay. Hence though it might charge 1.99 USD for a chicken burger in the US, it would charge only 0.85 cents in India and maybe actually pay the customers 0.20 cents in Rawanda! So by simply glancing at a list of prices of Big Macs around the world, we could get a reasonably good idea about the standards of living and pricing around the world. I realize over time that one should not take everything an elder brother says at face value, but you do realize the immense potential of at least one research paper on the subject.

We seamen have been around for some time. Being in the second oldest profession and constantly discovering new worlds meant that the ship masters over time have had to have an astute and forgiving grasp of the bending laws of economics. Often, captains would land up on an island where the natives had no concept of money. To trade with these people posed daunting challenges that were faced very admirably by our past compatriots. Captain Cook apparently traded a bushel of cucumbers for twelve virgins in the Samoa Islands. A trade which has regrettably declined over the years. Primararily due to lack of fresh cucumbers. I have a theory that this is due to all cucumber farmers being fathers of Virginal daughters. But we shall come to that on a later post.

What we are going to touch now is the complex trade in Cigarettes being done by captains all over the world. When the crowd of port, environment, security, safety and security inspectors board the ship, it is understood that their strenuous efforts at ensuring that their national laws are obeyed, have to be rewarded with Cartons of Cigarettes. I don’t care what the Surgeon general might have to say about them, but I think that Marlboros are an amazingly versatile tool. In the 90’s, when Liquor was allowed on ships, Cigarettes were a largely ignored tool of trade. The immigration officer was hardly going to be tempted to a dead taste in the mouth when Johnny Walker was winking at him from the racks of the bond store. It is since the 2000’s that Marlboro has truly become the global tender among authorities worldwide.

I believe a progressive shipping company should actually promulgate among the whole fleet, the average number of Marlboros dispensed out in the ports worldwide. This would give the master of the ship arriving at a port for the first time, a pretty fair idea about what faces him when the gangway touches the Jetty. For example over the last couple of years, I have had experiences ranging from a couple of cartons in the US to a personal record of 58 Cartons in Ukraine. Of course that is exempting the revered continent of Africa, which is governed by a different set of economic laws of its own. The last time I was in Togo, the agent offered to sell back to me my own cartons of Marlboros for 10 USD so that I could again give it back to him, a second time. The economics for this are a bit tedious and disinterested parties might want to skip the next paragraph.

You see, I had purchased these particular bunch of Marlboro reds, from an unscrupulous (are there any other kind) ship chandler in Panama for 15.75 USD, per carton. Thus a crate of 50 Cartons, cost me 787.5 USD. Now, I need to give this agent a 100 Cartons. So if I give him 50 Cartons at 15.75 USD per carton, then buy them back at 10 USD per carton, I am spending only 500 USD for the second crate of Marlboros. So when I give him back this second crate (which is actually the first crate) I am actually saving the company 287.5 USD. Plus of course, since the first crate (which is also the second crate) never left the ship, it means that agent graciously offers to exempt us the transportation and port dues for supplying the second crate of Marlboro’s (which is also the first crate). Of course I could have offered to buy back the crate of 50 Marlboro’s back a second time and saved us a further 287.5 USD, but under that company regulations, I couldn’t pick up bonded stores from any unscrupulous supplier other then their approved list of unscrupulous suppliers.

Usually the rules of polite Marlboro transaction dictate that one Marlboro carton be given to each person boarding. This law sometimes has to be stretched into the probability sector. Let me give an example. When we arrived at this port, the weather was a bit choppy, so the port authorities send across the Agent to take care of the formalities. Now I am informed that if the weather had been all right, it is probable that five officers would have boarded. So that makes five cartons for those fine gentlemen. Plus it is probable that if the five authorities had boarded, the agent would have probably helped me out with the documentation, so that is a sixth carton for the agent. Now there was a crew change scheduled for this port. So that would entail intervention from the boss of the Authority Since he’s the boss, he of course needs to be given two cartons.

I am currently doing my Extra masters and at the end of it, I am required to submit a research paper dealing with pertinent maritime topics. I think the theories of Marlboro economics might have just enough juice to squeeze out one research paper.

On a parting note, I am often struck by an image of a hot and humid room with the windows open and a fan swriling overhead in a futile gesture. There are six men sitting around a table. All of them smoking, with the person at the head of the table smoking two cigarettes – because he’s the boss.


PM Velankar. said...

Hi Velu ,
Great to read the latest post . It was great, very funny and with a very very "veluish" touch to it . Reminded us of velu of the yore.In last couple of posts the zing and the "veluish " touch was missing . Good to have you back .
Keep it up and keep them coming .
M & P

Anonymous said...


Hilarious, and at the same time brought in misty memories of Marlboro country... as we called the Suez canal.

Mitsui OSK lines used to have a fantastic company guide to port entry, filled in by fellow massters, which contained the number of cig. cartons and bottles that had to be given to various authorities.

Me and my friends found it a fantastic tool, whcih gave us a realistic idea of what to expect 9and prepare for!) - I would always beloeve what a fellow mariner said, rather than what good ol' Admiralty said! (Sorry guys - I respect you for your charts... but your Sailing directionsa re way out of synch with reality!)

Anonymous said...

Thank you for the explanation. We were all scratching our heads one day with regards to the economics of buying our own cartons of cigarettes back. It reminds me of Joseph Heller's charter from Catch-22 Milo Minderbinder who would gets fresh eggs to his mess hall by buying them in Sicily for one cent, selling them to Malta for four and a half cents, buys them back for seven cents, and finally sells them to the mess halls for five cents.

Good luck with the Extra Master

Anonymous said...

Really enjoyed your post. First-time blog reader here, I'll definitely be back!

Unknown said...

Always a pleasure to read your blog. I don't always leave a comment, but I do enjoy them. Keep up the good work.