2GO: The Only Liner Company Left

It is very hard to comprehend that 60 years ago the Philippines had some 25 (twenty-five) major and minor shipping companies engaged in liner shipping. These are the passenger-cargo shipping companies with routes emanating from Manila to the various islands of the country with voyage times of a day or greater and with the farthest route going up to Davao and taking nearly a week in doing so. During that time some 70 provincial ports have connections to Manila with Tilik port being the nearest. Lubang island, Mindoro, the Romblon islands, Marinduque, Camarines Norte, Catanduanes, Sorsogon and Samar ports and including Jolo had regular calls from Manila liners. Young ones today might be surprised by that line-up.

There are many reasons for the decline of our liner shipping and I have discussed some of them in other articles I have written (and in some future ones I will write). I have generally discussed it by periods and by shipping companies. But one thing, from a probable peak in the 1950’s and 1960’s in the postwar years, our liner shipping had been on the southward trend after that and it recently reached its nadir this decade. Now only one liner company with eight liners is left in this field (and that even includes two of their ships that sail from Batangas and not Manila). At our very peak from the mid-1950’s to around the late 1960’s, we had around 90 liners sailing from Manila (who could believe that number now?).

This current low we have now is probably the worst in the history of our liner shipping starting from the late Spanish era when passenger-cargo ships can already sail freely because Moro pirates were driven from many of our seas with the arrival of the second-hand Vickers gunships from Britain. I myself cannot believe that historically great ports like Davao will lose its liner after about 120 years. From Manila, there are now just about a dozen ports that have liner calls. Southern Mindanao, Eastern Visayas and Bicol is now completely devoid of passenger liners from Manila. And this is not to mention nearer islands.

Our only liner left now is 2GO, a result of the buy-out of Aboitiz Transport System and its practical merger with Negros Navigation a few years ago. It became our sole remaining liner company when PSACC (Philippine Span Asia Carrier Corporation) sold its last remaining liner in 2014. They cannot even come back now because after closing its liner division, MARINA, the local maritime regulatory agency came up with the resolution banning Sulpicio Lines/PSACC from operating ferries again. After that, the head then of the Department of Transportation and Communications (DOTC) expressed hope that some other companies will enter the liner field. Unfortunately, knowing the nature of the liner industry and its difficult situation, I do not expect that another entity will enter this field (well, unless some China investors take interest).

Cargo is the bread and butter of shipping and not the passengers. In the major liner companies in the past and even in 2GO now it is cargo that provides the bulk of the revenues. And cargo is easier to handle because it does not need the any comforts, it doesn’t complains, it can even be delayed and handled roughly. It has been said that in the past that container shipping subsidized passenger ships (in liners) and I think this is not far from the truth. It might have not been true when liner companies can still pack in the passengers to the brim and even refuse some as they will be overloaded.

But things always change. Passengers started drifting away from the liners with the advent of the budget airlines and the intermodal buses. From a situation when liner companies can practically fill their liners with passenger capacities of over 2,000 persons, ridership declined to a point that that can only happen in the peak season. Soon the liners were just in the 1,000 plus range in passenger capacity because it can’t fill in the ships with big passenger capacities. Suddenly, 4-deck liners were already passe. With that, amenities, offerings and space were also curtailed and the old gaiety and fun of liner cruising became subdued.

Liners were also meant to carry cargo and in containers starting in the mid 1980’s and this help keep the liners afloat. However, unfortunately for the liners this millennium, container load was also weak. There were just so many container ships and container lines and the intermodal truck also took its toll on container shipping. This process was accelerated during the time of President Gloria Macapagal Arroyo which stressed the intermodal. It was the short-distance shipping companies which grew in this period, a growth sustained until today when a new paradigm even emerged, the Cargo RORO LCT. So instead of a container ship running from Manila to Leyte or Bohol, the container van will just be shipped to Cebu and then transferred to a local ship and carried with the use of truck-trailers. And this further curtailed the revenues of the liners.

Trucks including the wing van trucks, the equivalent of a container van, now just roll from Manila or CALABARZON to Panay and Eastern Visayas and even up to Cebu and Mindanao. They are cheaper and more ubiquitous and can make direct deliveries thereby short-circuiting the old process of container vans coming and going to container yard first. With less handling and less number of days to delivery, this is the mode that is growing now. Truck-trailers also load the containers including those coming abroad to places where there are no cargo-container service anymore from Manila. Or those cargo where the shipper does not want to use the crowded Manila port and roads. The rise of the intermodal truck also took its toll in liner and container shipping.

With these developments, I wondered about the future of 2GO a few years ago when for a few years after the merger, they were carrying losses especially since they carry a big debt burden. But in the last few years since the world market price of fuel went down the company had been profitable and have more than covered their earlier losses. They have not lost their spunk, they are still trying to fight and are working hard. That is good for those who still prefer liners. Now if only the access to North Harbor is better (it is actually terrible). The MRT line should have ended there (but Divisoria opposed). However, I read that the government will now extend the MRT line to the port.

MARINA is in charge of the development of our shipping industry according to the law. Now, I do not know what they have done for the distressed liner sector in the last few decades (of course they will always say they have encouraged). But if their track record is examined, MARINA had been a great failure. It is not only the liner sector that recessed. As the decades progressed, we also lost our ocean-going fleet and we have no regular overseas line anymore even to our neighboring countries especially in the container trade (whereas our neighbor have container lines). What we only have is a lot of mariners fighting for a ship to board.

I just hope people still patronize 2GO. They need our patronage. We have to support them as it is the only one we have left.

The remaining liner fleet of 2GO:

St. Pope John Paul II

The former SuperFerry 12. Long been a flagship, still the biggest in the fleet and has lost little of her speed. She also happens to be the oldest now in the fleet but still very reliable. She is always in the Manila-Cebu-Cagayan de Oro route. Capacity and space are lesser now with the addition of a second wagon deck.

St. Therese of the Child Jesus

The former SuperFerry 16 which was sold abroad by Aboitiz Transport System for a tidy profit at the peak of world metal prices in the mid-2000’s. Was not profitable abroad as cruise ferry potential was over-estimated. Bought and brought back from her route from Japan to Vladivostok, Russia. She arrived again in 2015. One of the rare balikbayan ships here.

St. Francis Xavier

Sister ship to St. Michael The Archangel and St. Leo The Great but built in another shipyard and for another company (but same company as St. Michael The Archangel). All three have same engines but this ship is still very reliable. Bought in a laid-up state from South Korea but fully refurbished. The first ship to come after the merger. Ship arrived here in 2013.

St. Michael The Archangel

Another ship bought up from a laid-up state in South Korea but also built in Japan like her sisters. She looks a little different from her sisters because of the addition of a restaurant-lounge in the top deck at the stern. She is the slowest among the sisters and sometimes she have hiccups, a product of weak maintenance from her predecessor companies abroad. Originally a Negros Navigation ship.

St. Leo The Great

The former SuperFerry 21 and a former Kansai Kisen ship which is known for good maintenance thus she is still very reliable. Among the sisters she might have the most sparse interiors and with the least passenger capacity. She was bought direct from Japan by Aboitiz Transport System together with the St. Gregory The Great which is now lost.

St. Ignatius of Loyola

The former Cebu Ferry 3 and the biggest among the former Cebu Ferries. Like the other Cebu Ferries, she was pulled out from the Visayas-Mindanao routes by Aboitiz Transport System because they thought they will earn better in Luzon. Among the 2GO ferries that acts more like a short-distance ferry loading mainly vehicles (although its route to Panay from Batangas is not exactly short).

St. Augustine of Hippo

Together with St. Ignatius de Loyola, among the first to be pulled out from Cebu to be redeployed in Luzon. She is based in Manila unlike the other Cebu Ferries and she is doing the Palawan route for 2GO. She is the fastest among the former Cebu Ferries with the biggest engine too. She was the former Cebu Ferry 1.

St. Anthony de Padua

The former Cebu Ferry 2 and pairing with St. Ignatius de Loyola in the Batangas to Panay route. She was the last Cebu Ferry pulled out from Visayas-Mindanao and the last to hold a route to Masbate and Leyte as memorial to the old Aboitiz routes. She is the smallest with the least capacity among the former Cebu Ferries and the slowest with the smallest engine.

2GO also has a few container ships. These are the San Rafael Uno, San Rafael Dos, San Lorenzo Uno, San Pedro Calungsod and San Agustin Uno. But all are registered under Caprotec Corporation, the old fuel supplier of Negros Navigation and I heard they are only chartered. Since 2GO also lacks container ships it also charters from Ocean Transport. This lack of container ship started when William, Gothong and Aboitiz (WGA) had to sell container ships (plus ferries) to pay of the withdrawing Chiongbian and Gothong partners in a situation where the mantra was the RORO liners will carry a significant amount of containers. But RORO liners were also sold and hence the lack of container capacity until now.

2GO also has the SuperCat under its wing through a subsidiary. SuperCat is also weakened now with just 6 High Speed Crafts (HSCs) sailing regularly and with another two just laid up most of the time. This HSC fleet is also beginning to age although they have two under construction. The SuperCat fleet is not even half of what it used to be before. The active SuperCat fleet consists of the St. Nuriel, St. Uriel, St. Sealthiel, St. Emmanuel, St. Jhudiel and St. Braquiel. The other two are the St. Benedict and the St. Dominic, two HSCs bought cheaply by Aboitiz in Australia in laid-up states but were never profitable here.

I wonder if the liner industry will have a renaissance. In there will lie the fate of 2GO.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s