The First “Great” Merger: The Failed Saga of WG&A and CFC

When WG&A was formed it was ostensibly to combat the entry of foreign shipping companies on local inter-island routes. That was the time of many so-called “deregulation” initiatives of Fidel V. Ramos. But even then I had doubts about this as an cabotage law was in effect in the Philippines. Cabotage effectively prevents foreign shipping companies from plying local routes. And to repeal it an act of Congress is needed and I heavily doubted then that the Philippine Congress will go along with that.

It is generally accepted that it was Aboitiz Shipping that proposed this big merger. Rumors had it that the biggest shipping company, Sulpicio Lines, which was also Cebu-based was also invited but it refused and preferred to go it all alone.

The merger brought together the second, third and fourth-biggest shipping companies in the Philippines reckoned by passenger and cargo operations out of a total of five long-distance liner companies (but may I note which is in fourth place might be disputed by Negros Navigation). It had the effect of lowering the number of long-distance passenger shipping companies from five to three.

The merged company and its subsidiaries were the biggest shipping combine that ever existed in the Philippines in terms of fleet and in terms of route network. It significantly brought to that Visayas-Mindanao and intra-Visayas routes and High Speed Craft(HSC) operations. For the former, the Cebu Ferries Corp. (CFC) was formed and for the latter SuperCat was retained.

Brought into the merger were the following ferries (including their former routes):

WILLIAM LINES INC.
Mabuhay 1 (Manila-Cebu and Manila-Iloilo)
Mabuhay 2 ((Mnl-Surigao-Butuan-Tagbilaran-Mnl and Mnl-Tagbilaran-CDO)
Mabuhay 3 (Manila-Davao-Dadiangas-Manila and Manila-CDO-Iloilo-Manila)
Mabuhay 5 [after a few voyages permanent fielding overtaken by merger]
Dona Virginia (Manila-Dumaguete-Ozamis-Iligan v.v.)
Maynilad (Manila-Zamboanga-Davao)
Masbate I (Manila-Masbate-Catbalogan-Tacloban)
Zamboanga City (Manila-Puerto Princesa v.v.)
Tacloban City (Manila-Batan-Dumaguit-Dipolog v.v.)
Iligan City (Cebu-Iligan v.v.)
Misamis Occidental (Cebu-Ozamis v.v.)
Mabuhay 6 [unfinished]

CARLOS A. GOTHONG LINES INC.
Our Lady of Akita (Manila-CDO-Butuan v.v. and Manila-Cebu v.v.)
Our Lady of Medjugorje (Manila-Dumaguete-Ozamis-Iligan-Cebu v.v.)
Our Lady of Sacred Heart (Manila-Roxas-Palompon-Isabel-Cebu v.v.)
Our Lady of Lourdes (Manila-Dumaguit-Palompon-Cebu v.v.)
Our Lady of the Rule (CDO-Cebu v.v. and CDO-Jagna v.v.)
Our Lady of Naju (Cebu-Ozamis v.v.)
Our Lady of Fatima (Nasipit-Cebu v.v. and Nasipit-Jagna v.v.)
Our Lady of Mt. Carmel (Iligan-Cebu v.v. and Iligan-Dumaguete v.v.)
Our Lady of Guadalupe [reserve/unreliable; formerly Cebu-Surigao v.v.]
Our Lady of Lipa (Cebu-CDO v.v.)
Dona Cristina (Cebu-Tacloban v.v. and Cebu-Palompon v.v.)
Dona Lili (Cebu-Surigao v.v. and Cebu-Maasin v.v.)
Don Calvino [reserve/unreliable; formerly Cebu-Iligan v.v.]
Our Lady of Akita 2 [unfinished]

ABOITIZ SHIPPING CORP.
SuperFerry 1 (Manila-Iloilo-GSC-Davao v.v. and Manila-Iloilo v.v.)
SuperFerry 2 (Manila-Cebu-CDO v.v.)
SuperFerry 3 (Mnl-Zamboanga-Cotabato v.v. w/ Boracay (summer) and Mnl-Dumaguit-Roxas v.v.)
SuperFerry 5 (Mnl-Cebu-Iligan-Dumaguete-Mnl) and Mnl-Dumaguete-CDO-Cebu-Mnl)
Elcano (was not used; obsolete/unreliable; supposedly not brought by ASC to the merger)
Allowing for database inaccuracies, the following cargo ships were brought to the merger:

CARLOS A. GOTHONG LINES INC.
Our Lady of Peace (112.9m x 18.0m, 17kts, b. 1974)
Our Lady of Hope (99.0m x17.3m, 17kts, b.1979)

ABOITIZ SHIPPING CORP.
Aboitiz Concarrier V (69.0m x 10.9m, b. 1968)
Aboitiz Concarrier XIV (71.0m x 10.9m, 13kts, b. 1965)
Aboitiz Superconcarrier I (115.1m x17.3m, 14kts, b. 1970)
Aboitiz Superconcarrier II (102.0m x 16.3m, 12.5kts, b. 1970)
Aboitiz Superconcarrier III (105.5m x16.3m, 12.5kts, b. 1976)
Aboitiz Megacarrier 1 (139.7m x 19.3m, 14kts, b. 1975)
Aboitiz SuperRORO 100 (108.2m x20.0m, 16kts, b. 1983)

WILLIAM LINES INC.
Wilcon II
Wilcon 4
Wilcon 5
Wilcon VI
Wilcon VII
Wilcon 8
Wilcon 11
ROCON I

Excluding HSCs which were just beginning to arrive in the Philippines, the combined fleet of WG&A was nearly 50 vessels, slightly more than double the fleet of Sulpicio Lines, previously the biggest shipping company in the country.

SHIP TRANSFORMATIONS AFTER THE MERGER
Mabuhay 1 became SuperFerry10
Mabuhay 2 became SuperFerry 7
Mabuhay 3 became SuperFerry 8
Mabuhay 5 became SuperFerry 9
Mabuhay 6 became Our Lady of Good Voyage
Our Lady Akita became SuperFerry 6
Our Lady of Akita 2 became SuperFerry 11 (and later the Our Lady of Banneux)
Masbate I became Our Lady of Manaoag (in 1998)
Misamis Occidental became Our Lady of Montserrat (in 1997)

VESSELS TRANSFERRED TO CEBU FERRIES CORP.
Our Lady of Lipa (later transferred to WG&A)
Our Lady of the Rule
Our Lady of Lourdes
Our Lady of Fatima
Our Lady of Mt. Carmel
Our Lady of Guadalupe
Dona Cristina
Dona Lili
Don Calvino
Misamis Occidental
Our Lady of Good Voyage (later)
Maynilad (later and also renamed Our Lady of Akita 2)
Our Lady of Banneux (later)
Our Lady of Manaoag (later)

Like all mergers and acquisitions (M&A), the terms “synergy”, “rationalization” and “streamlining” was bandied about as if these terms are positive terms in business. But soon these words brought chills to the rank and file because the sum of the 3 words is actually only one — “chopping block”. This is the field of bean counters where shipping passion is simply thrown out of the window.

Immediately, the Aboitiz Jebsens system was adopted. That means relying on bigger, faster ROROs and short in-port hours which equates to high utilization of ships. That called for good ship engines, a field of expertise of the now-renamed WG&A Jebsens. That system, however, also meant the death knell for the cruiser liners as their cargo booms meant long in-port hours and their having no car decks means low capacity for container vans.

The new style was to put all cargo in container vans and all container vans are mounted in trailers. For fast handling, tractor heads from trucks were no longer good enough. Only dedicated, automatic prime movers with the capability to raise the trailers were used. Calls on in-between ports generally were only 2-3 hours and ships don’t stay overnight at the farthest port of call of a voyage.

With so many ROROs sailing high hours per week (with some ships sailing 145.5 hours out of a 168-hour week), WG&A was confident it could sell less-efficient and slower ropax and container ships without affecting capacity and frequency. Soon some of the vessels were already for sale.

VESSELS SOLD SOON AFTER THE MERGER
Tacloban City (cruiser)
Iligan City (cruiser)
Dona Cristina (slow, small RORO)
Don Calvino (slow, small, unreliable RORO)
Dona Lili (slow, small RORO)
Wilcon 6 (old cargo ship)
Aboitiz Concarrier V (old cargo ship)
Aboitiz Megacarrier 1 (big, modern container ship)
Aboitiz SuperRORO 100 (big, modern container ship)
RoCon I (big, modern container ship, the biggest in the country)

VESSELS OFFERED FOR SALE BUT NOT SOLD THEN
Dona Virginia (cruiser liner)
Maynilad (big but slow RORO liner)
Zamboanga City (ROLO liner)
Our Lady of Naju (cruiser)
Masbate I (slow, small RORO)
Our Lady of Montserrat (cruiser)
SuperRORO 300 (former Our Lady of Hope, container ship)

With WG&A Jebsens managing the fleet, the merger upgraded the amenities, cleanliness and passenger service of the ferries. But initially all meals were for sale; vehement protests from patrons thereafter forced WG&A to backtrack. It was also claimed that safety standards improved as the whole fleet is now internationally-certificated. However this was not reflected in lower hull-loss rates. Ironically, it was the lesser Our Ladies (and not the SuperFerries) which proved to be unsinkable.

WG&A and CFC practiced branding. Branding is good in the sense that it promises consistent quality and service. On the other hand branding also utilizes ads and promotions. If that results in better market share then it should be good. Otherwise it only means higher level of costs. And higher costs are a threat to marginal routes and to less-efficient ships.

Initially, even with a fifth of their fleet sold (and with only one additional ship coming, the SF12 and while losing the SF7 to fire), WG&A was able to offer more frequencies because of the higher utilization of ships. But almost no new ports of call were added except for Bacolod. And probably the only significant new routes were the Manila-Cebu-Surigao-Davao (which passes through the eastern seaboard of Mindanao), Manila-Ormoc-Nasipit, Manila-Dumaguete-Cotabato and Manila-Cebu-Zamboanga-General Santos/Davao routes.

It was Cebu Ferries that added more new ports of call and routes (like Cebu to Dumaguit, Roxas City, Bacolod, Dumaguete, Larena, Jagna and Camiguin and Cagayan de Oro to Dumaguete) which in turn put a lot of pressure on the other Cebu shipping companies. CFC ships were faster than the competition and as former liners they simply outclassed the rest in terms of amenities and service.

Sulpicio Lines and Negros Navigation responded by adding ships. Sulpicio Lines basically kept to their old routes (except for the new Manila-Cebu-Davao-Dadiangas route) but Negros Navigation which previously concentrated only in Western Visayas has to venture in a lot of new routes and ports of call because their fleet more than doubled in a span of a few years. But then by sailing to Cebu, Nenaco also opened their former exclusive port of Bacolod to competition and they lost more than they gained.

This period right after the merger, the late 90s, was probably one of the best in Philippine passenger shipping. Competition was fierce, choices were many and there were a lot of newly-fielded ships. There were more shipping companies in the past but the ships of the 90s were far better than the ships of the earlier periods. In major ports there were nearly daily departures from all the liner companies combined.

But they say good times never really last. But I didn’t expect that the decline will be that soon, that fast, that continuous and what will be left is just the rump of the biggest-ever shipping company in the Philippines.

The first hint of trouble that I detected was when I noticed that WG&A was not properly assessing the threat, challenge and development of the intermodal system in Eastern Visayas which was then growing by leaps and bounds.

If Fidel V. Ramos had a deregulation program in shipping he also had a deregulation program in the bus and truck sectors. As deregulated area, bus companies can now ply Eastern Visayas routes with just a temporary operator’s permit. Soon a lot of buses were plying the Samar-Leyte-Biliran routes. Then the dominant short-distance RORO company in the Matnog-Allen route lost the case to protect their missionary status and new players entered that route ensuring that the ROROs needed will always be there. Long-distance trucking also developed with the loosening of the restrictions in the importation of surplus trucks. And with the advent of radial truck tires long-distance trucking became easy.

WG&A’s response was to withdraw from the Samar-Leyte routes except for the adjacent ports of Ormoc, Palompon and Isabel which actually comprises just one route. But soon under pressure from the buses these were lost too including the port of Masbate City which was also part of this route. Soon the islands of Masbate, Samar, Leyte and Biliran were lost to the intermodal trucks and buses.

Eastern Visayas was a signal victory for the intermodal system which was based on long-distance truck/bus plus the short-distance RORO ship. Wins by the challengers tend to have a multiplier effect. They become stronger, bolder and more confident. If the ship can be beaten in one area then nobody can pooh-pooh anymore that they will not be beaten in the next area of confrontation. And the next challenge probably happened before the WG&A has fully internalized their loss and it happened when they were in relative disarray.

A related development at this time was that WG&A’s new routes failed to stick and only the Bacolod route was able to survive. The new CFC routes also failed to pan out and were being abandoned one by one. One contributory factor for CFC’s retreat is fuel cost. The amenities and service of their ships might have been higher as those were former liners but as former liners it is also the reason why their engines are bigger and consume more fuel. Soon WG&A/CFC were selling ships. This was the second set of disposals and it happened at about the turn of the millennium. Also disposed in this period were at least six catamarans including vessels that came from mergers in the High Speed Craft (HSC) sector (the mergers with the Sea Angels of Negros Navigation and Waterjet).

At the same proximate time, it was already the strategy of WG&A to sell old and inefficient cargo ships and just let the ROROs liners carry the container vans. They then went for bigger ROROs later with twin cargo decks, the reason for the purchases of the SuperFerry 15, SuperFerry 16, SuperFerry 17 and SuperFerry 18.

The next challenge did not come from the intermodal. Rather it was the withdrawal of the Gothong family from the merger except for one scion. Soon the Gothong family re-entered the shipping business and re-established Carlos A. Gothong Lines Inc. (but they were not particular successful). Not long after this development the Chiongbian family (of William Lines) also withdrew from the merged company. But they did not re-enter the shipping business. Let it be noted, because it is important, that all the merged shipping companies independently retained their cargo forwarding businesess. For the Chiongbian family it was the Fast Cargo Transport Corp.(FCTC) and Gothong Cargo Forwarding Corp.(GCFC) for the Gothong family.

One can speculate that the sale of 10 vessels in 2000-02 (including those withdrawn from routes and old container ships) might somehow be connected to these withdrawals. When the company also took out a big loan in this period ($18.6 million) it might also have a relation to this state of affairs. Before the end of 2002, Aboitiz had already bought out its former partners. But it will still be later that the company will be renamed Aboitiz Transport System (ATS).

The next challenge came from the intermodal again. In 2003, the Western Nautical Highway opened and buses, trucks and jeeps were able to roll down to Panay island via Mindoro and Batangas. Soon the shipping routes and shipping companies serving Panay were under great pressure. Again, WG&A chose to withdraw (from Dumaguit and Roxas) and just tried to hold on to Iloilo port.

The opening of the Western Nautical Highway and the consequent withdrawal from routes, the withdrawal of the Chiongbian family and the need for new ROROs provoked a massacre of ships in this period as about 15 ships were disposed in the years 2003-06, both from WG&A and CFC, both ROPAX and container ships. It must also be noted that six catamarans were also sold in this period. WG&A was lucky that at this time world metal prices were peaking. If it hastened the disposal of ships I can say it is probable. Let me state that in the late 1990’s when all three families were still in WG&A, the company did not sell to the breakers, in general. In the first half of the first decade of the new millennium WG&A sold heavily to the breakers especially when world metal prices were peaking.

Attracted by the doubling of world metal price in 2007, WG&A then sold their prized ferries Superferry 15, SuperFerry 16, SuperFerry 17 and SuperFerry 18 to foreign liner companies.In the process they earned a windfall. But this is not without cost as they suddenly lacked the ships needed to carry the container vans. As a stopgap measure WG&A chartered 3 container ships, the “Myriad”, “Markella” and “Eponyma”. They then also converted SuperFerry 2, SuperFerry 9 and SuperFerry 12 into twin-cargo-deck ROPAX ships. Later the subsidiary cargo company 2GO was formed and the chartered ships were returned one by one.

At about the same time, in 2007, a very ominous development took place. Aboitiz partnered with MCC Transport of Singapore, the Asia subsidiary of the A.P. Moller – Maersk Group, the biggest container shipping company in the world and formed the MCC Transport Philippines (MCCTP). Since it met nationality rules, it was able to ply local routes and the ships invested by Maersk were given special permits by MARINA.

If the chartered ships of ATS and the ships of 2GO were a step up over local competition, the ships that came from MCC Transport were still another further step ahead in terms of size, speed and efficiency. MCCTP acted as feeder to MCC Transport which now dominates the Asia container routes. Together with the coming of more regional container ships (after APL) with direct foreign routes (like MELL, PIL, RCL and others), this completely undermined one important bread and butter of local container shipping which is the transshipment of foreign container vans. ATS and subsidiary 2GO cargo operations might have been affected by this but as a group Aboitiz is safe because they are also on the side of the winners through MCCTP.

After the sales of the four of the biggest and most modern SuperFerry ships in 2007, the fleet of ATS/CFC no longer grew. New ships have come like SuperFerry 20, SuperFerry 21, Cebu Ferry 1, Cebu Ferry 2 and Cebu Ferry 3. But ships have also been sold, lost or laid-up like SuperFerry 9, Our Lady of Medjugorje, Our Lady of Good Voyage, Our Lady of the Rule, Our Lady of Mount Carmel and SuperFerry 19.

With only six ships sailing, ATS ports of call were already down to half compared to its peak and in half of these ports the frequencies were down to once a week. CFC ports of call were also down to half and its fleet is less than a third of what it had before. CFC changed its website and no longer claimed it was the biggest Visayan shipping company (which is just a reflection of the truth). The Sulpicio Lines fleet was already bigger than the combined ATS and CFC fleets. If cargo ships are counted, Sulpicio’s fleet was almost double the combined ATS, CFC and 2GO fleets.

In 2008, KGLI-NM, the holding company owning Negros Navigation made an offer for Aboitiz Transport System. When the bank financing the take-over bid asked for more collateral the bid collapsed. This take-over bid was news for a long time because of the significance and it dragged. It was here that ATS propagated the canard that shipping is losing to the budget airlines and it obscured the fact that cargo is the lifeblood of shipping. Ironically it is this same year that regional container ships in Philippine ports multiplied. And not once did I notice Aboitiz discussing its shares in MCC Transport Philippines. But at least the Aboitiz group was frank enough to admit that the business of power generation attracts them more and that they are already heavily investing in it and if ATS is sold it will be one of their primary investment areas.

In 2010, with the assistance of the ASEAN-China Fund, Negros Navigation Company was finally able to secure the deal to buy Aboitiz Transport System and its subsidiaries especially Cebu Ferries Corporation, SuperCat and 2GO, the forwarding company. At its end as an Aboitiz company, ATS, CFC and 2GO had only 9 ROPAX ships and 2 cargo ships sailing which is not any bigger in gross tons than the company it merged in WG&A even if the SuperCats are counted. So in effect that means the bigger William Lines and Gothong sank without any replacement.

Aboitiz always says around that it has already gotten out of shipping and the maritime industry. But they completely obscure the fact that they are still in MCC Transport Philippines (MCCTP) and they completely own now the former Aboitiz Jebsens (renamed back when the Gothong and Chiongbian families withdrew from WG&A). The former Abojeb is in crewing and manning and that is one of the five recognized sectors of the Philippine maritime industry as defined by the government. MCCTP is already in expansion after Aboitiz sold Aboitiz Transport System. [Recently, Aboitiz clarified that some of their family members are engaged in MCCTP.]

Now, Negros Navigation Company owns Aboitiz Transport System and NENACO even retained the name and the brands. It will be a matter of time before it will be evident how big a bag they are holding.

The “great” merger of 1996 started out with a bang, lofty words and promises. It exited with just a whimper. But along the way it sank two great liner companies (William Lines and Gothong) and took down with it the liner industry.

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The MARINA “Magic Meter”

The MARINA “Magic Meter” is not something that can be found in a dictionary or a reference book. This is just a term by some ship spotters to describe the syndromes where:

  1. Ships from Japan will be modified and structures or scantlings are added and yet the Gross Tonnage (GT) which is a measure of the volume of the ship will stay the same/unchanged or like Ripley’s “Believe It Or Not” the GT will even go down! Or less worse, the GT will remain the same. And much less worse, the GT will marginally increase.

  2. Another variation is some of the ships (passenger and cargo) will have unmodified superstructures and yet again the GT will go down too.

  3. Still another variation is the length and/or the breadth of the ship will go down and along with it the GT (and Net Tonnage) of the ship will go down. This is the Philippine version of “shrinking” a ship without it being brought to a kiln drier.

The MARINA “Magic Meter” is of course not available for free. Like many “accommodations” in government, some kind of “transaction” has to take place. Otherwise, it would not happen. For a company to benefit, of course, the regulating agency personnel has to benefit too. With less GT, benefits can accrue like less docking cost, less towing cost (use of tugs), less insurance cost maybe and some other cost-saving benefits. Ask any nautical designer and they will tell you that.

Some companies are very good in the employment of this “tool”. Some else are not that very fond of this. However, one deleterious effect of these shavings is we have so few entries in the first edition of the book, “The Great Passenger Ships of the World” by Frank Heine and Frank Lose which was published in 2010 in Germany. Since they relied on the official GT, and the cut-off is 10,000gt, many of our otherwise-qualified ships were not included. Actually, no ship of Negros Navigation Company was included in that while Aboitiz Shipping Corp., Sulpicio Lines and even Carlos A. Gothong Lines Inc. have liners included in that book. The Philippine Ships Spotters Society (PSSS) knows because it was the contributor of the Philippine ship photos in that book and in fact because of that contribution PSSS has a complimentary copy of that book.

ray-smith

I have been asked before which among the liner companies was the most notorious for shrinking the GT. I have been coy before but the actual answer is Negros Navigation Company. Well, figures don’t lie and I am just stating the truth. Their St. Peter The Apostle, St. Joseph The Worker, San Paolo, Mary The Queen, St. Francis of Assisi, St. Ezekiel Moreno, San Lorenzo Ruiz, Princess of Negros, Sta. Florentina and Sta. Maria all had lower GTs here compared to when they were in Japan. And we all know all of them had added structures. If we go by official figures, it would be the Sta. Ana that will be their biggest ship outside of St. Michael The Archangel because it is one of the very few ships of Negros Navigation which showed increased GT after modification here. And nobody in his right mind would claim Sta. Ana was the second-biggest ship ever of Negros Navigation Company.

If comparisons of liners’ GTs between different shipping companies are made the more this will be a stuff of laughing sessions. Like the sister ships SuperFerry 2 and SuperFerry 5 made it to the book of Frank Heine and Frank Lose but the sister ships St. Peter The Apostle and St. Joseph The Worker both did not because the NENACO ships are just a little over half the size of the two Aboitiz Transport System (ATS) liners, officially (guffaw!). And the smallest original Aboitiz liner, the SuperFerry 3 is significantly bigger than the Mary, Queen of Peace, also officially. Can anybody believe that? I can make other comparisons but NENACO might cringe and sue me (they shouldn’t, they are the biggest liner company now).

Maybe many will guess that the much-maligned Sulpicio Lines is also a big violator in GT shavings, too. Well, not that much really. Only the Philippine Princess, Surigao Princess and Cagayan Princess showed declines in GT while structures were added while Princess of the Pacific, Manila Princess and Boholana Princess GTs remained the same when the three all had additional structures. Meanwhile, the old Aboitiz Shipping Corporation played it straight – all the GTs of their modified ships rose, as should be. Later, as WG&A and ATS, all the GT of their acquired ships from abroad increased too when structures were added. That also goes true for their subsidiary Cebu Ferries Corporation.

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For William Lines, the GTs of Dona Virginia, Manila City, Ozamis City, Tacloban City and the first Zamboanga City all declined. For Sweet Lines, they played generally straight although the GT increases were minimal. If the GT declined, it was the work of the previous local owner before they acquired it. The old Carlos A. Gothong Lines Inc. (CAGLI) was also good in the shaving game. Among their ships that showed GT declines while structures were added were the Our Lady of Akita, Our Lady of the Rule, Our Lady of Fatima, Our Lady of Lourdes, Our Lady of Guadalupe, Ozamis Bay 1 and Butuan Bay 1.

Among the major Cebu regional shipping companies, Trans-Asia Shipping Lines Inc. (TASLI) and Cokaliong Shipping Lines Inc. (CSLI) also played it straight generally. If scantlings were added then the GTs rose, as it should. The others, well, it seemed on some of their ships they tried to make savings through shavings (pun intended) and that included the defunct Viva Shipping Lines of Batangas. Starlite Ferries and Montenegro Shipping Lines Inc. (MSLI) were, however, generally honest.

One effect of these shavings is some ferries that should be over 1,000 gross tons have less than 1,000 gross tons officially. That means they are not in the list of Shippax International, a European database and publisher when they should be. In Bicol, however, there are ships which should be less than 1,000 gross tons that are over 1,000 gross tons. Before there was a rule that ferries over 1,000 gross tons can sail in Typhoon Signal Number 1. And so they bloated the GTs of their ships!

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This shaving of GT is not much of a phenomenon in the smaller ships including the basic, short-distance ferry-ROROs. If there was a shaving it generally happened this way – there were added structures but the GT simply did not move. And adding some structures are generally done in these ships to add some passenger space. That was the style of shaving there. Anyway, one problem maybe is there might not be people in MARINA who can compute GTs and NTs. They have more lawyers than marine engineers and what they know to compute are legal fees and dues on the ships and shipping companies. Yes, they studied fuzzy math in college.

In cargo ships, the shavings are less common. They usually don’t add structures unlike in the ferries and they just declare the Japan GTs (not in Aleson Shipping though whose local GTs of cargo/container ships are generally higher than its Japan GTs). However, some cargo ships add some extensions in the stern for the crew’s benefit. Usually this is not reflected in GT increase. Tankers and tugs follow the pattern of the cargo ships. These don’t add scantlings and decks and they just declare the Japan GT.

It is in the liner sector where shavings are the greatest. There are some liners that the true GTs are really so far off the actual GTs. However, most of that is rectified now since most of the liners came from Aboitiz Transport System. That shipping company was generally honest in GTs and the GTs were retained under 2GO.

Meanwhile, in recent years, LCTs are coming from China that have high GTs. The liners that came here that went to China first have high GTs too compared to their Japan GTs. Well, who knows if it is the correct one? Like I believe the assertion of a PSSS Moderator-mariner who said the 7,878gt of the 157-meter long, 4-deck SuperFerry 19 is too low.

When will be the time all our ships will have accurate and reliable GTs? The answer is I don’t know.

vinz

The Flagship Wars in the Manila-Cebu Route

In the first 15 years after World War II there was not much of what was later called “the flagship wars”. How can there be flagship wars when it was an ex-”FS” ship battling another ex-”FS” ship? The ex-“FS” ship were just small World War II surplus ships from the US Navy that were slow and lumbering just like the freighters. And with the basicness of the ex-”FS” ships, there was really no “luxury” to talk about when there was no airconditioning, no real amenities, no entertainment (unless one brings out a guitar and croons), no true lounges or even enough space to walk about. There were bigger ships like the Type C1-M-AV1 which were also war surplus ships from the US Navy but they were also basic ships and also lack speed (both the two mentioned types only sail at about 11 knots which was also the sailing speed of the general cargo ships). As general rule, cargo ships converted for passenger use do not produce luxury liners. If ever, it would be the former refrigerated cargo ships that can be made into luxury liners or else the best is to buy former luxury liners from Europe.

The Manila-Cebu route was and is still the premier shipping route in the Philippines. This route connects the primary metropolis and manufacturing center to the secondary metropolis and manufacturing center of the country. Hence, the movement of people and goods would be highest in this route. If there is a next premier route it would be the Manila-Iloilo route. The Manila-Cebu route is also the gateway to the routes to Northern Mindanao while the Manila-Iloilo route is the gateway to the routes to Western Mindanao and Southern Mindanao.

The early postwar liners calling on Cebu did not have an exclusive route to Cebu much like the prewar liners. From Cebu they will still go to Northern Mindanao ports or even sail to Southern Mindanao ports via Zamboanga. It was not unusual then for liners to have five ports of call in a voyage. That was why complete voyages then to Cebu and Northern Mindanao took one week and complete voyages to Cebu and Southern Mindanao took two weeks. In the latter a liner might have seven ports of call. As they say, “the better to pack ’em in.”

When luxury liners first came they funnily have the code “airconditioned” (airconditioning was rare then). And the word “luxury” also began to be bandied about. In terms of speed they were significantly better than the basic ex-”FS” ships and ex-”C1-M-AV1” ships. Some of the earliest local liners were the trio from Everett Steamship being sailed by Philippine Steamship and Navigation Company (PSNC), the Elcano, Legaspi and Cagayan de Oro which all came in 1955, the Luzon (1959) and Visayas (1963) of Compania Maritima which were doing dual local and foreign routes, the General Roxas (1960) and General del Pilar (1961) of General Shipping Corp., the President Quezon (1960) of Philippine President Lines (which became the Quezon of Philippine Pioneer Lines in 1963 and later the Pioneer Iloilo of the same company in 1965), the Governor B. Lopez (1961) of Southern Lines Inc., the Fatima of Escano Lines (1964).

If one will notice, there is no mention here of a ship of Go Thong & Co. or William Lines and definitely there is no error in the list. In that roost, the President Quezon ruled in speed department at 18 knots and the next fastest to her sailed at only 16 knots with the tailender at 12 knots which was just about the same as the ex-”FS” ships and the ex-”C1-M-AV1” ships. That was the picture of the luxury ship sector of the Philippines two decades after World War II.

In that era, there was no “flagship wars” as understood a decade later. Maybe if the better ships were all doing long routes it will be a wonder where and how they will compete. This is especially true for the luxury liners sailing to Cebu and then proceeding to many southern ports up to Davao. I noticed the tight “flagship wars” started only when there were already true fast cruisers and when the route was exclusively limited to Manila-Cebu.

It was Sweet Faith of Sweet Lines, a newcomer in liner shipping which started the true “flagship wars” in 1970. They were able to acquire that ship which was a luxury liner even in Europe and she was really fast. When she came she became the new postwar benchmark in speed at 20 knots and beating handsomely all the other contenders by at least 2 knots. Maybe she only did the Manila-Cebu route because she had to stress the capture of passengers because she can’t take in a significant amount of cargo. And with her accommodations all-airconditioned that was really more fit for the Manila-Cebu route which not only had more sector passengers and the better-off passengers were also there including the Cebu and Central Visayas rich who were afraid to take planes then. With such a kind of ship Sweet Lines really had to stress in ads her speed, her amenities and her brand of passenger service to capture more passengers.

She was very successful in that strategy and her repute spread far and wide and she earned many praises. It was really a paradigm change in how to do sailing and maybe that was a little too much for the older shipping companies to swallow the noise and swagger of the newcomer. William Lines had a brand-new ship, the Misamis Occidental in the same year she was fielded but she was clearly outmatched by the Sweet Faith because maybe when they finalized the design of the ship they did not see Sweet Faith coming to upset the chart.

The biggest shipping company then, the Compania Maritima, which had the resources to compete did not react and continued their stress on the route passing through Cebu before sailing for Western and Southern Mindanao up to Davao. That was also the response (or lack of response) and strategy of the Philippine Steamship and Navigation Co. which would be later known as Aboitiz Shipping Corp. and besides their luxury trio were already 15 years and outmatched and so maybe they thought they really have no option at all except to not really compete. Meanwhile, Escano Line’s priority was not really Cebu at all, its ships cannot really compete as they did not stress speed when they ordered their brand-new ships. Go Thong & Co. might have been too busy in their European expansion through Universal Shipping and maybe they thought getting all the copra in all the ports possible made more sense (they had lots of small ships for that purpose). General Shipping Corp. and Southern Lines Inc. were also gone and Galaxy Lines, the successor to the Philippine Pioneer Lines was also near to floundering already. Negros Navigation Company, meanwhile, was not competing in the Cebu route and it is in the Manila-Iloilo route where they were flexing the muscles of their brand-new liners.

For two years until 1972 Sweet Faith ruled the Manila-Cebu route. It will be up to a shipping company which long relied solely on ex-”FS” ships (until 1966) to challenge Sweet Faith with their upcoming newbuilding which will turn out to be the liner Cebu City. A sister ship of the liner Don Juan, the flagship of Negros Navigation Company, she was fitted with bigger engines. Since Don Juan can only do 19 knots maybe they decided on bigger engines to be able to compete with the 20 knots of Sweet Faith. Cebu City came in 1972 that began the battle royale of the two flagships whose intensity passed the two ships to shipping folklore long after both ships were gone (only the millennials would not have heard of their battles).

In 1973, the liner Sweet Home of Sweet Lines arrived to form a “tag team” to battle Cebu City. She was not as fast as the two at 18 knots but she was bigger and as luxurious as the Sweet Faith because she was already a luxury ship in Europe when she was still the known as the Caralis.

In 1975, Sulpicio Lines joined the Manila-Cebu “flagship wars” when they acquired the second Don Sulpicio from RKK in Japan. Unlike their previous ships this liner had no cargo ship origins. A fast cruiser at 18 knots and with accommodations much like the Cebu City she was also a legit contender. In this wars it is not only speed that was advertised but also punctuality of departures. That is aside from the food, the amenities and the passenger service.

In 1976, the newly-arrived Dona Ana also joined this fray. She was a sister ship of Don Sulpicio but faster at 19 knots and newer. However, she was a Manila-Cebu-Davao ship and she only competed in the Manila-Cebu leg as a “tag team” too with the second Don Sulpicio. Dona Ana also started a new paradigm on her own, the fast cruiser to Davao which she can do in only three days compared to nearly a week of the others. The flagship of Compania Maritima, the liner Filipinas was forced to respond by cutting ports of call and announcing they will sail the Davao route in only 4 days. In a sense this was also a “flagship war”. Later, the Dona Ana became a replacement flagship in the Manila-Cebu route when Don Sulpicio was hit by a bad fire in 1979 and her repairs took two years. By that time, it was another new fast cruiser of Sulpicio Lines, the Don Enrique (later the Davao Princess) that was battling the flagship Filipinas of Compania Maritima in the Davao route along with the liner Manila City of William Lines [there will be a future article on these Manila-Davao fast cruiser battles].

Sweet Faith and Sweet Home lasted just less than a decade in the Manila-Cebu “flagship wars” because they were already old ships when they first came here. Sweet Home quit earlier about 1978 and Sweet Faith quit in 1980. However, even before she quit, the new flagship of William Lines, the Dona Virginia has already arrived. She will be linked in an epic battle not with a flagship of Sweet Lines but with a flagship of Sulpicio Lines. This liner is the Philippine Princess which came in 1981. Dona Virginia had the upperhand as she was faster, bigger and more beautiful-looking and she ruled the Manila-Cebu route. Both were exclusively Manila-Cebu ferries and like those that came in the 1970s they had no cargo ship origins. In this decade Compania Maritima was no longer in the running as they no longer had new ship acquisitions and in fact they quit when the financial and political crises spawned by the Ninoy Aquino assassination broke out.

After an interregnum of two years without a dedicated Manila-Cebu liner, Sweet Lines brought out their new challenger, the luxurious Sweet RORO but she was smaller and her speed was slightly inferior to the flagships of William Lines and Sulpicio Lines. However, she was as luxurious if not more so and she trumpeted an all-airconditioned accommodations and she was a true RORO which was the new type and paradigm that was gaining already. Meanwhile, Aboitiz Shipping Corp. gave up all semblance of a fight and just concentrated in container shipping. The Carlos A. Gothong Lines and Lorenzo Shipping Corp. also withdrew from the Cebu route for practical purposes. Escano Lines were also not buying ships like Aboitiz Shipping and also were not contenders. Negros Navigation Company, like before was not competing in the Manila-Cebu route.

Suddenly, in 1988, Sulpicio Lines did what was equivalent to exploding a grenade in the competition. They were able to acquire the Filipina Princess which broke all local records in size and speed. It was far bigger and far faster than the Dona Virginia of William Lines and was a true RORO. Even though William Lines was able to acquire the RORO liner Sugbu in 1990, she was not a bigger or a faster ship than the Dona Virginia she was replacing as flagship. To rub salt on wound, in the same year Sulpicio Lines also acquired the Cotabato Princess and the Nasipit Princess which were also bigger than the Dona Virginia (and Sugbu) though not as fast. So for few years, in terms of size, Sulpicio Lines possessed the No. 1, 2 and 3 position in terms of ship size.

As to the others, in 1987, Sweet Lines was able to acquire the Sweet Baby but she was not as big as the William Lines and Sulpicio flagships nor can she match them really in speed. Soon, Escano Lines would be quitting liner shipping. There was really a big “consolidation” in the liner shipping industry, a euphemism to cover the fact that a lot of liner shipping companies sank in that horrendous decade for shipping that was the 1980’s. Again, Negros Navigation Company was not competing in the Manila-Cebu route.

With this “consolidation” it just became a mano-a-mano between Sulpicio Lines and William Lines in the Manila-Cebu route with the others reduced more or less to bystanders….

[There is a sequel to this describing the “flagship wars” of the 1990’s.]