The Start and Impact of Containerization on Local Shipping

Containerization or the use of container vans to transport goods began in the Philippines in 1976, a decade after containerization began to take hold internationally. The new method was started by Aboitiz Shipping Corporation when they converted their 1,992-gross ton general cargo ship “P. Aboitiz” into a container carrier. This was followed by the conversion of their general cargo ship “Sipalay” in 1978. These first two container ships had limited capacity in terms of TEU (Twenty Foot Equivalent Unit) which is the common measure of container capacity that can be carried by container ships but it more than showed the direction of cargo loading in the future. And it also showed that general cargo ships can be converted container carriers.

By 1978 and 1979, containerization was already in full swing in the Philippines when major competitor shipping companies William Lines Inc., Sulpicio Lines Inc. and Lorenzo Shipping Company also embraced the new paradigm and competed. This new wave was also joined at the same time by two other small and new shipping companies, the Sea Transport Company and Solid Shipping Lines. Except for these two, our pioneers in container shipping were passenger liner (which means there are fixed schedules and routes) shipping companies.

The leading liner shipping company then which was Compania Maritima declined to follow suit into containerization along with Gothong Lines while the others like Sweet Lines, Negros Navigation and Hijos de F. Escano followed a little later in the early 1980’s. Gothong Lines, however, was into small ROROs early and these can also load container vans. Sweet Lines later founded a separate cargo-container company, the Central Shipping Company.

Like Compania Maritima, Madrigal Shipping, another old shipping company also did not follow into containerization. The smaller passenger liner companies also did not or were not capable into going to containerization. Among them were Galaxy Lines, N & S Lines, Northern Lines, Bisayan Land Transport, Newport Shipping, Cardinal Shipping, Dacema Lines, Rodrigueza Shipping, etc. Soon all of them were gone from Philippine waters and one reason was that they failed to adapt to the new paradigm and shippers were already demanding for container vans.

Before the advent of container vans, dry cargo were handled bulk or break-bulk. Bulk is when the whole ship is loaded with grains or copra. But bulk shipment is not possible in the passenger-cargo ships then as major parts of the ship is devoted to passengers and its requirements. Along with passengers, the passenger-cargo ships then carried various merchandise as in finished goods from the city like canned goods, “sin” products and construction materials. On the return trip, it would carry farm products like copra, abaca, rice, corn or dried fish. Since it was mixed, it was called break-bulk. It was mainly handled by cargo booms and porters and stowed in the ships’ cargo holds. Since it was mixed and has no containers aside from boxes the handling was long and tedious and it was vulnerable to pilferage and damage by handling and by the weather.

With the coming of container vans the weaknesses of the old way of loading that led to damage and pilferage were minimized by a big degree. Actually, the arranging of the goods was even passed on to the shipper or trader and all the container shipping company had to do was haul aboard the container. The new system needed much less labor (who can be balky at times and disputes with them can lead to delays or intentional damage) than before and the loading is faster because containers can simply be stacked one atop the other. This was difficult with breakbulk because of possible contamination and because the cargo had no containers it was difficulty to simply stack them and this even led to lost cargo spaces.

One initial result of containerization was the need for dedicated container ships as the passenger-cargo ships of that era, the cruisers were not meant for the loading of container vans (although they can carry a few and loaded LOLO). Since our local volume was low, our shipping companies preferred not to order purpose-built container ships. Instead, the discovered path was just to convert general cargo ships into container ships. The needed conversion was actually minimal and since these ships were already equipped with cargo booms then it was easier for everything. Only, the booms needed to be more stout as in it has to have more lifting capacity because of the added weight of the steel of the container van. Container vans were handled LOLO or Lift-On, Lift Off.

With the coming of ROROs with its ramps and car decks starting in 1980, cargo handling became easier. Break-bulk cargo especially the heavier ones can now be handled by the forklifts and transferred to the car decks (which then became cargo decks also but not as cargo holds). Shipping companies have used forklifts before but mainly just in the ports. Now, the first ROROs also carried forklifts in the car decks and the stowing of container vans in the car decks of the ROROs began. These were mainly XEUs (Ten-Foot container vans) which can easily be handled by medium-sized forklifts. Still many of cargoes in the first ROROs were break-bulk.

Some liners of the 1980’s had cargo booms at the front of the ship while having RORO ramps at the stern like the “Zamboanga City” and the “Dona Virginia” of William Lines. It carried container vans at the front of the ship and those were handled LOLO while at the stern they loaded container vans. Actually, some big cruiser liners of the late 1970’s can carry container vans on their upper decks at the stern like the “Don Enrique” and “Don Eusebio” of Sulpicio Lines, the “Cagayan de Oro City” of William Lines and the “Don Claudio” of Negros Navigation”. It was handled LOLO by the cargo booms of those ships.

At the tail end of the 1970’s and at the start of the 1980’s what was prominent was the race of the leading liner shipping companies to acquire general cargo ships and convert it to container ships. Aboitiz Shipping Company was the early leader and they fielded thirteen container ships between 1976 and 1989. Their series was called the “Aboitiz Concarrier” and latter additions were called the “Aboitiz Superconcarrier” and “Aboitiz Megaconcarrier”. William Lines rolled out in the same period eight container ship plus two Cargo RORO ships which can also carry passengers. They named their series as the “Wilcon”. Sulpicio Lines was not to be outdone and they fielded fourteen and these were dubbed as “Sulpicio Container” or “Sulcon”.

In the same period, Lorenzo Shipping, a former major, also rolled out eleven container ship in a series called “Lorenzo Container” or “Lorcon”. Some of these were former general cargo ships of theirs. Sea Transport Company were also able to field eight with place name of their ports of call followed by “Transport” like “Davao Transport”. None of the other liner shipping companies which followed into containerization like Sweet Lines and Negros Navigation had half a dozen container ships. Instead, they began relying on their new RORO ship acquisitions but that was also done by Sulpicio Lines, William Lines, Aboitiz Shipping and Gothong Lines.

The main effect of the rush to acquire container ships was the slowing down of the acquisition of passenger ships. Actually, this might even had an effect on their purchase of RORO passenger OR ROPAX ships. With the collapse of many shipping companies in the crisis decade of the 1980’s, this resulted in a lack of passenger ships at the end of that decade. But there were many container ships as in about sixty and that fleet pushed many shipping companies in the cargo trade out of business in the 1980’s. Two main factors pushed them into the precipice – the economic crisis which made it hard to acquire ships and the loss of patronage because the paradigm in cargo handling had changed. Break-bulk was now already marginalized and frowned upon. Shippers and traders have had enough of pilferage and goods damaged in transit.

With marginalization, the other cargo liner companies had more difficulty filling up their cargo holds. Voyages became fewer and sailing times ballooned. They became dead duck for the container vans loaded into the fast RORO liners which had fixed schedules. Soon they were on the way out or they had to move to tramper shipping where there are no fixed routes and schedules. During this period cargo liners were even included in the schedule boards of the passenger liners. Their only deficit compared to passenger liners was as cargo ships they had less speed. And since cargo is handled LOLO they also spent more time in the ports.

Now, long-distance break-bulk shipping is almost gone. It is only lively now in the regional routes like the routes originating from Cebu and Zamboanga. In many cases, places and routes they have already evolved into intermodal shipping – the use of trucks which are loaded into short-distance ROROs. In this mode the trucks are the new “containers” or “vessels”. Since that is in competition with container shipping, it is now container shipping which is beginning to be marginalized by the intermodal truck especially if it is supported by the cheap Cargo RORO LCT.

Things change. Always.

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