In discussing liner shipping, one has to understand there are two parts here which are passenger liner shipping and cargo liner shipping which is now represented by the local container ships. Another angle of this segment of shipping is this is long-distance shipping in the Philippine context and voyages normally take several days with possible intermediate port calls.
Once upon a time, liner shipping was the pinnacle of inter-island shipping. This sector was then and even now the domain of the biggest shipping companies with the biggest ships and probably even with the most number but definitely sure by gross tonnage total. However, for the the last ten years this segment of local shipping has shrunk so much.
Shipping titans who cannot admit defeat wrongly pin the blame on the rise of the budget airlines. But the bread and butter of shipping is cargo with passenger revenue being secondary and nobody will ever believe budget airlines already carry container vans or container volumes of cargo. Actually, Philippine liner shipping is losing ground not just to budget airlines (in Passengers) but to the intermodal transport system which is defined by the intermodal bus and the intermodal truck. Included in this are intermodal cargo jeeps, mini-trucks, various kinds of panel and delivery trucks and even commuter vans. Maybe it is the seeming “lowliness” of this transport segment which makes the snooty shipping moguls cringe and not be able to accept defeat and instead wrongly point to the budget airlines as the culprit of their decline. For ego massaging it might have felt easier as budget airlines is on surface looks a “superior” or “more advanced” form of transport.
Passenger liner shipping once had nearly twenty players and many of them were legends well-remembered by the old timers and for valid reasons like the amenities, the service and the food. Liners of old defined what was “traveling in style”. Airline travel then was reserved for the rich and near-rich. But then not all from this social milieu liked airlines and so passenger liner shipping had suites and even special or royal suites that were able to cater to their taste. Many top liners of the past were like traveling hotels on our seas.
Passenger liners then were also the main carriers of cargo before the era of containerization which began before the end of the 1970’s but it was only many years later when the use of containers surpassed loose-cargo shipping. That was part of the reason why there were so many passenger liner companies then with many ferry liners even though our population was not yet that big. Many do not realize it but the era of containerization put a brake to the growth of passenger liner shipping (but that was not the cause of its decline which happened a generation later). Let us just say that passenger liner ship count hit a plateau but the ship sizes got bigger (and faster).
Cargo liner shipping (as distinguished from tramping) generally began with containerization in Philippine shipping. When it came the major shipping companies started buying container ships, container vans and big forklifts. Later they bought tractor heads and trailers for the container vans. From ten-footers the container vans grew up to forty-footers although it is the twenty-footers that dominate the local container shipping scene.
What then defines liner shipping aside from the long distance it travels? The key defining traits of liner shipping are actually the fixed routes and the fixed schedules which are defined even in the Certificate of Public Convenience (CPC) needed to operate this kind of service. In the cargo sector this is what separates the cargo liners from the trampers which have no fixed routes and only sails when chartered or there is cargo.
In container shipping the container vans are not just necessary for speed of loading and security. Actually it is also necessary for the separation of the cargo. Unlike in trampers when most likely there is only one shipper in cargo liner shipping it will be a mix of different dry cargoes with many different shippers and consignees and even different ports of unloading.
In the Philippines, however, departures of container ships are not that strict unlike before because container shipping has hit the doldrums because of the rise of intermodal trucking. Delays and arrivals by a day or two is becoming common because in many cases they won’t let the ship sail without a break-even load. What is more predictable in departures and arrivals nowadays are the container vans loaded on ferry liners. However, unlike in the past this is also subject now too of delays in hours as loads and patronage were not as good as in the past.
With the rise of the intermodal trucks and buses (buses do carry a significant amount of cargo too especially since their number is large) and with passenger traffic and express parcels gobbled by the budget airlines, our passenger liner count dropped by a very large percentage in the last ten years. The growth in number of local container ships also showed inconsistency. It might have dropped but to a certain extent the container ships’ capacity has to replace the big drop in the number of ferry liners which on the average were carrying about a hundred or so TEUs.
As of now there is only one passenger liner company left which is 2Go Travel and it is operating just about ten liners. Almost for sure the passenger liner companies of the past like Sulpicio Lines, William Lines, Aboitiz Shipping, Compania Maritima, Gothong Shipping, Lorenzo Shipping, Sweet Lines, Philippine President Lines, Manila Steamship, General Shipping, Southern Lines, Everett Steamship, Philippine Steam and Navigation Co., Escano Lines, Madrigal Shipping, De la Rama Steamship, Philippine Pioneer Lines, Galaxy Lines, NORCAMCO, N&S Lines, Rodrigueza Shipping, Newport Shipping, Northern Lines, BISTRANCO, Veloso Lines, Corominas Richards Shipping, Olabarrieta y Compania, Juliano Lines, South Sea Shipping, Dacema Lines, MD Shipping, KL Lines, Mabuhay Shipping, Eastern Shipping, Royal Lines and about ten other minor liner companies will no longer be back. And that is contrary to the wishful thinking and clueless dreaming (on shipping) of the current head of the Department of Transportation and Communications (DOTC).
Cargo liner companies have proven more resilient than the passenger liner companies. One reason is cargo is the real bread and butter of shipping and this segment earns better because rates are regulated and are high because it was set at about 35% load factor which means a voyage will already earn at that light load.. Add to that that container vans needs no service crew, do not have to be fed or nor need a bed; no air-conditioning or amenities are needed and insurance is even less. And, a container van won’t complain if the voyage is delayed.
In this sector there are still a significant number of players like Oceanic Container Lines, Philippine Span Asia Carrier Corp., Lorenzo Shipping, NMC Container Lines, 2Go Freight, Solid shipping Lines, Super Shuttle RORO, Gothong Southern, Moreta Shipping Lines, MCC Transport Philippines, Loadstar Shipping/Escano Lines, Ocean Transport, Aleson Shipping, Carlos A. Gothong Lines and Meridian Shipping. There were some who quit this segment like William Lines, Central Shipping, Sea Transport and some which shrunk or coalesced but they were amply replaced.
One effect of the big decline in passenger liners is the drop in the number of ports with container service and in the frequency. This became the opening for the intermodal truck especially the wing van truck which in many ways resemble the container van except that it is much more flexible. This also let in the entry of the RORO Cargo LCT which shuttles container vans and intermodal trucks to some destinations left by container shipping. Lately, however, this mode is beginning to compete on the routes of the container ships.
Liner shipping is plagued by many problems. One of the common complaints is the high cost of shipping. It has been well-established that it is cheaper to send a container van to Hongkong, China or Singapore than to send to Manila which is much nearer. They say local container shipping is “inefficient”. With so many players which simply depend on high rates and with small capacities and an aging fleet then that will be the sum of it. Then add to that other costs produced by hassles like road congestion, high truck hauling fees and corruption in many points. And then input too the cost of an uncaring and clueless bureaucracy which only knows how to collect fees.
That is why the generally more efficient, more competitive and more dynamic sector of the intermodal truck is eating up container shipping. But to foreign experts like the some Japanese they can never begin to understand why a solitary truck is more efficient and competitive than a container ship that can carry hundreds of container vans (maybe they have not yet learned all the applications of the phrase, “Only in the Philippines”). In parallel routes the intermodal truck simply undercut the rates of container ships with the added bonus of making direct deliveries and deliveries along the way. And to think the backbone of this are surplus trucks (tsk! tsk!). That will surely set some shipping experts to begin scratching their heads. I just say that is just one proof how inefficient is our local container shipping.
Quo vadis? I don’t really know. All I know is if the Cabotage Law is set aside and foreign ships are allowed to carry cargo in the inter-island routes then local container shipping as we know it will simply collapse as in “ampaw naman talaga”. We can never really compete except maybe if we use the cheap RORO Cargo LCT especially those with no decent offices.
Positive government intervention is needed not only in local routes but also so we can go back to international routes. I am not talking of subsidies or incentives but in leadership. But this might be a very tall order as our government agencies have no good idea of shipping and it is not manned by shipping experts let alone by good maritime professionals. Local “shipping experts” also don’t know what they are talking about. Meanwhile, true shipping players feel neglected, not being listened to, suffers over-regulation and mulcting. I know they are keen on attending meetings and consultations called by the government.
Local discourse, too, on shipping matters is very shallow and in general are composed mainly of landlubbers that are very ill-informed. If there are radio programs or social media forums on shipping it invariably only tackle ship manning and manning problems which are actually not really parts of shipping as those are labor or employment matters.
As they say, changes begin with understanding of the situation or of the problem. But with the discourse as it is, I am not optimistic positive changes are headed in the liner field of shipping.