Are We Heading Into The 3rd Surplus of Bottoms?

In maritime connotations, a “surplus of bottoms” means there is a general surplus of ships which can mean marginal loads to survive and worse a fare and freight war occurs. When this happens some shipping companies do not survive and so a “correction” (this term is used in Business and Economics) occurs but that can mean ships going to the breakers or being idled.

The first surplus of bottoms happened in the start of the 1980’s and that happened in the year 1980 and in the succeeding years. It became even more pronounced when the financial and political crisis hit the country in 1983 after the assassination of the opposition political leader Ninoy Aquino.

What triggered the surplus of bottoms in 1980 was the arrival of the new container ships which changed the system of carrying cargo. Before their arrival it was the passenger-cargo ships which carried the express cargo (the cargo that have to be moved fast). There were actually only a few cargo liners (cargo ships that have regular routes and schedules) before the arrival of the container ships. Passenger-cargo ships before 1980 have voluminous cargo holds (holds because there were not RORO liners before 1980 except for two, the third Don Carlos of Sulpicio Lines which arrived in 1977 and the Don Johnny of Lorenzo Shipping which arrived in 1976).

But when Sea Transport Company, Aboitiz Shipping Corporation, William Lines, Sulpicio Lines and later Lorenzo Shipping Corporation and Central Shipping Company (the vargo company of Sweet Lines) invested in container ships, suddenly the old passenger-cargo ships especially the former “FS” ships suddenly had no enough load and many were laid up and they rotted and were later sold to breakers especially during the financial and political crisis of the mid-1980s when the country’s growth rate turned negative.

Cargo is the bread and butter of shipping and it is not the passengers that make them viable. The major shipping lines were just too happy then to invest in container ships for they can move cargo without employing too many crews that go with the operation of passenger-cargo ships. With container ships there won’t be complaints about delays, insurance goes down, there is no need to stack up on food, etc. Operation became more simple with less risk. But that paradigm change meant a lot of old passenger-cargo ships will have to go because of a surplus of bottoms and that surplus became more pronounced when the mentioned crisis  hit.

There were more than a dozen shipping companies which did not survive this first surplus of bottoms especially in the crisis and among them were the old venerable Compania Maritima (which was the biggest shipping company for decades already), the various small shipping companies to Bicol and the Eastern Visayas which were also greatly affected by the development of intermodal shipping, the Northern Lines, Madrigal Shipping Company, Tomas del Rio & Company (the former Rio y Olabarrieta) and others.

The second surplus of bottoms period hit at the tail end of the administration of Fidel V. Ramos and it spilled into the terms of Joseph Estrada and Gloria Macapagal Arroyo. This period covered the late 1990s and the early 2000s and this was more pronounced in the liner sector like the first surplus of bottoms period.

The cause of the second surplus of bottoms period was actually the incentives given by Fidel V. Ramos to shipping when the acquisition of surplus ships from Japan quickened fast and many new players emerged not only in the  liner sector but also in the tramper sector which is actually in competition with the cargo liner sector. This second surplus of bottoms was exacerbated by the emergence of the budget airlines and the intermodal trucks and buses which took passengers and cargo from the liner sector.

In the second surplus of bottoms period the negative effect was more widespread. It happened in the High Speed Craft (HSC) sector when the arrival of the SuperCats, Sea Angels, Weesam Expresses, Bullet Expresses and others were simply too fast for the actual passenger growth. And this was worsened too by the Asian Crisis of 1997 which dampened business. One result was that we needed to sell High Speed Crafts outside the country.

In some short-distance ferry routes like in Batangas and Zamboanga this surplus of bottoms resulted in dog-eat-dog completion where fare and rate wars erupted. It was good for the passengers, car owners and shippers initially but this also meant that the financially weaker (but not necessarily smaller) shipping companies won’t survive. Among the notable casualties in Zamboanga were the Sampaguita Shipping Lines and SKT Shipping which later reincarnated into the KST (Kong San Teo) Shipping (but which also went under).

In Batangas, the formerly dominant Viva Shipping Lines and its legal-fiction companies also sank along with some other smaller shipping companies. In Cebu there was also a show of surplus bottoms but not as great as in Batangas and Zamboanga. Funnily, someone who has no knowledge of shipping, Myrna S. Austria made a Ph.D. thesis of this period and declared that so many routes lack competition. And the many routes and shipping companies disappeared because in truth there was so much competition (her data was incomplete and she didn’t know that parallel routes compete).

And like in first surplus of bottoms era a “correction” happened. What is sad here is we lost so many liners and liner routes. WG&A and Cebu Ferries Corporation shrank to just about a third of its former size and SuperCat to just less than half of its peak. The pioneer in fastcrafts Bullet Express (later Bullet Xpress) also disappeared along with some other High Speed Crafts operators.

After this the acquisition of ships went into doldrums that for a good ship spotter it became hard to maintain interest in shipping. But recently the ship spotters were jolted by new acquisitions especially since many are actually brand-new. The FastCat series started this trend and was followed by the Starlite series. Many other shipping companies are quickening their acquisitions including in High Speed Crafts and Medium Speed Crafts (MSCs). Competition drives many of these new acquisitions. But in the case of Island Water and Shogun Shipping theirs is trying the waters their own way.

These developments happened in the backdrop of the development of a new paradigm, the Cargo RORO LCTs which take rolling cargo away from the overnight ferries and the short-distance ferries. There are many shipping companies now in this sector and the LCTs involved here are nearing the two dozen mark. Like when the container ships first arrived, the operation of a Cargo RORO LCT is simpler than that of a ferry and they are wanted as suddenly they became the solution to the second-class treatment of trucks in ferries.

At the moment these new developments are beneficial to the passengers, car owners and truckers/shippers as there had been a lowering of rates in some routes and places. Plus there are more options and schedules now.

MARINA (Maritime Industry Authority), the regulatory body of the government with regards to the maritime sector will always push for the acquisition of new ships in their goal of ship modernization. And they will always think that more is better. And everybody is happy when a new ship arrives.

The question is will this lead to the 3rd surplus of bottoms? Well, it’s a little early to say but we know the shipping companies are still in the acquisition mood and we do not know up to when this optimism will end. The banks are open now for loans unlike before and the series of FastCats which can sail for as long as they want and the Starlites are not yet finished in arriving. Ferry companies have also discovered China sources now both in brand-new and surplus.

What is the antidote to a surplus of bottoms? That is the threat of MARINA to cull old ships, most of which are still running reliably and many of their companies have no record of losing a ship. Almost all are opposed to this and MARINA knows that. That is also not popular to the public as we are sentimental of our old ships.

We will have to see how this episode plays out.

 

The Result of the Losses of the MV Leyte, MV Guimaras and MV Dadiangas and the Scrapping of the MV Mindanao of Compania Maritima

Nowadays, those four liners of the defunct but once great Compania Maritima will no longer ring a bell to most people. Even in the years when the four were still sailing those were not among the best or the primary liners of the said shipping line except for the MV Mindanao which was actually the second ship to carry that name in Compania Maritima. And so what was the significance then of their losses? This I will try to explain.

The shipping company Compania Maritima of the Philippines (as there were other shipping companies of that name abroad and even in Spain, the country of origin of our Compania Maritima) was the biggest in local passenger shipping from probably  the late Spanish era and until just before the company folded sometime in 1984 at the peak of the political and economic crisis besetting the country then. And so, the company had a run at the top of our passenger shipping field for nearly a century and that is probably a record that can no longer be broken. Compania Maritima in English means “Maritime Company”.

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The logo of Compania Maritima (Credits to Lindsay Bridge)

When the Pacific War ended and the shipping companies were still struggling to get back on its feet they were dependent on the war surplus ships that were being handed down by the Americans. Although Compania Maritima was also a recipient of these kind of ships their rise was not dependent on it as they were capable of acquiring surplus ships from Europe using their Spanish connections (the owners of the company, the Fernandez Hermanos were dual Filipino and Spanish citizens). Their contemporaries Madrigal Shipping and Manila Steamship (the Elizalde shipping company) were also capable of that (now who remembers those two shipping companies?) but their acquisitions were old ships that I suspect were castoffs from convoy duty during the war. In comparison, Compania Maritima’s ships from Europe were just a few years old.

Right off the bat, Compania Maritima had the biggest passenger fleet in local shipping after the war and their best ships were the biggest ferries in the Liberation and post-Liberation years. Aside from their war-surplus ex-”C1-M-AV1” ships which were refrigerated cargo ships during the war, Compania Maritima had ships whose origins were as liners in Europe and it definitely has a difference over passenger ships whose origins were as cargo ships. Among the ships from Europe was their first flagship, the MV Cebu and the sister ships MV Panay and MV Jolo. The latter two were fast cruiser ships of that early Republic shipping years.

Locally, it was almost always that Compania Maritima will have the best and biggest ships and the biggest fleet. They were also among the first to order brand-new liners like the MV Luzon in 1959, the MV Visayas in 1963 and the MV Filipinas in 1968. When the three were fielded those ships were not only the biggest but also the best (as compared to the ex-”C1-M-AV1” and the ex-”C1A” types which were big but not really that luxurious). Not included in this comparison were liners whose main function were as oceangoing liners. Among these are the brand-new ships of De la Rama Steamship which were leased from the government that later will become the subject of a dispute in court.

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Credits to Philippine Herald and Gorio Belen

A ship bigger than the three mentioned was the MV Mindanao of the company which came in 1970 from Europe but was not a brand-new ship having been built in 1959. But her distinction when she was fielded was she was the biggest liner sailing then and even bigger than the flagship MV Filipinas. It was only in December 1979 when her record length will be broken when the MV Dona Virginia came to William Lines.

The MV Mindanao was the last-ever passenger-cargo ship acquired by Compania Maritima and the 1970’s was the decade when they will lose a lot of ships as casualties of typhoons. Some will sink, some will capsize and some will be wrecked. Now those three categories are all different in the determination of the loss of a ship. Not all ship losses actually result in the disappearance of the ship below water. In “wrecking” the ship will still be above water in some beach. In “capsizing”, there are many cases when part of the ship can still be above water or just below the waterline, visible and accessible. But many times also the ship will be in deep waters and so that is called “capsizing and sinking”. If the hull is holed or broke into two it will simply be “sinking”.

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Credits to Gorio Belen

The MV Leyte was a small passenger-cargo ship, technically a multi-day liner but by no means a luxury liner as she was just a former “FS” cargo ship during the war which was converted for passenger-cargo use. As a passenger-cargo ship, her career evolved mainly in serving her namesake island and province through the port of Tacloban in a route extending up to Butuan and Nasipit. There are times though when she also substituted in other routes outside Leyte. The ship was originally known as USS FS-386 in the US Army.

This small ship came to Compania Maritima in 1947. Although 53.9 meters in length over-all and 560 gross register tons this ship was lengthened to 66.2 meters with a gross register tonnage of 730 tons. Lengthening of ex-”FS” ships was common then (most were actually lengthened) in order to increase their passenger and cargo capacities. The speed of this type of ship was between 10 and 11 knots and their accommodations were rather spartan.

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Credits to Philippine Herald and Gorio Belen

The MV Guimaras was not a small liner for her time with a length over-all of 98.6 meters, a gross register tonnage of 3,555 tons and a net register of 1,868 tons. Translated to more modern measurements that is approximately the dimensions of the fast cruiser liners of William Lines of the 1970’s. She actually had the dimensions of the sank MV Cebu City and MV Don Juan which were both flagships but her breadth was one meter wider. It is hard to compare her with the ROPAXes of today as this type have greater beams than the cruiser ships of old and these are generally taller. The “fatter” MV Don Claudio is actually a nearer match but still the breadth of the MV Guimaras was bigger. The MV Guimaras was actually bigger than the flagships of the other shipping companies of her era.

The MV Guimaras was one of the former liners from Europe that came here in the 1960’s to bolster our fleets when surplus ships from the war were no longer available in the market. It was not only Compania Maritima which took this route but also Carlos A. Gothong & Company (the yet-undivided company), William Lines and Sweet Lines. These ferries from Europe actually averaged 100 meters in length over-all and that will give an approximate idea of their size (gross register tonnage is sometimes a subjective measure). On the average their speed was about 15 knots but the speed of the MV Guimaras tops that at 16.5 knots.

The MV Guimaras was the former refrigerated cargo ship Sidi-Aich of the Societe Generale des Transports Maritimes a Vapeur (SGTM) of Marseilles, France and she was completed in 1957 and so when she came she was not yet an old ship. The route of the MV Guimaras from the time she was fielded until she lost was the Manila-Iloilo-Cotabato route although at times she also dropped anchor too in Zamboanga port which was just on the way.

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The Kitala (Credits to Jean Pierre Le Fustec)

The MV Dadiangas was a bigger ship than the MV Guimaras but built in the same year and also in France where she was known as the Kitala of the Compagnie Maritime des Chargeurs Reunis. Like the MV Guimaras she was also a refrigerated cargo ship with passengers and the advantage of this type is air-conditioning and refrigeration is available from the start and so they can be refitted as luxury liners.

This ship was 109.5 meters in length over-all with a gross register tonnage, the cubic volume of 4,143 tons and a net register tonnage of 3,240 tons. For comparison, this ship is already the size of the MV Dipolog Princess and MV Iloilo Princess, both of which reached the new millennium. She came to Compania Maritima in 1969 and her first name in the company was MV Isla Verde. She was subsequently renamed to MV Dadiangas in 1976.

Like the biggest ships of Compania Maritima, the MV Isla Verde also spent part of her career on overseas routes. When she was sailing the local seas her route was to Dadiangas (a.k.a. General Santos City) and Davao. In the later part of her career she was paired with the MV Leyte Gulf of the company in the same route. She is also a relatively fast ship for her time at 16 knots.

A summer Signal No. 3 typhoon of 150-kph center wind strength, the Typhoon “Atang” caught the MV Leyte on a voyage from Manila and she was wrecked in the southwestern portion of Sibuyan island trying to reach shelter, the usual predicament then of ships without radars during the storms of those times. The MV Leyte was almost on a collision course with the oncoming typhoon and so she actually preceded the fate of the MV Princess of the Stars in almost the same area 30 years later. The ship met her sad fate on April 20, 1978.

Meanwhile, the MV Guimaras was caught by the twin storms Typhoon “Etang” and Typhoon “Gening” which intensified the habagat waves and created a storm surge. The MV Guimaras was driven ashore on July 7, 1979 a kilometer south of Turtle Island in Campomanes Bay in Sipalay, Negros Occidental. She could have been trying to reach port as Sipalay has a port or she might have been trying to seek shelter in the bay. And on July 18 of that same year she was officially abandoned. The wreck of MV Guimaras is still there today in shallow waters of about 20 feet and is already a dive site. According to a website, the wreck of the MV Guimaras is already broken now.

In studying maritime losses one lesson that can be gained is it is not a good idea to try to outrun a typhoon or even a tropical storm (the modern terminology if the center wind is below 120kph). This is what MV Dadiangas tried to do when she passed the eastern seaboard of Mindanao on the way back to Manila from Davao. A tropical storm, the Typhoon “Huaning” was also on its way to Surigao and Leyte but was still then at some distance and still weak. But sea disturbance is not confined to within the walls of the typhoon and so the MV Dadiangas ran aground and was wrecked in Siargao island and to think the maximum strength of the typhoon as it was called then was only 95kph. MV Dadiangas was wrecked on June 23, 1980 and was broken up in 1981.

Three lost ships that at first look do not have that much significance. But then the big MV Mindanao of the company was also broken up in 1980. What does it matter here now in the annals of Philippine passenger shipping?

In the closing years of the 1970’s especially in 1978, Compania Maritima, William Lines and Sulpicio Lines were already at near-parity with each other in fleet size and quality especially after the slew of purchases of fast cruisers liners of William Lines and Sulpicio Lines. Meanwhile, Compania Maritima was no longer buying ferries after 1970 and in the 1970’s the company had a lot of ship losses. That means a net decrease for their passenger-cargo fleet while the passenger fleets of her main competitors were getting bigger.

It has long been my wonder if Compania Maritima was ever overtaken as the local Number 1 before their demise. Upon further peering it seems with the consecutive losses of the MV Leyte, MV Guimaras and MV Dadiangas and the scrapping of the MV Mindanao was the tipping point in the relative parity of the three companies. After that the two Chinoy shipping companies were already ahead by a little. The acquisition of William Lines of their new flagship MV Dona Virginia in December 1979 and of the MV Philippine Princess by Sulpicio Lines in 1981 plus their good salvage job on the burned MV Don Sulpicio which became the MV Dona Paz in 1981 were the final additions that pushed William Lines and Sulpicio Lines clearly ahead of Compania Maritima and that was epoch-making as the run on the top of Compania Maritima after nearly a century was finally broken. And to think Sulpicio Lines also lost their MV Dona Paulina in a wrecking in Canigao Island on May 21, 1980 and their old MV Don Manuel had a non-fatal collision on the same year.

By 1981 Compania Maritima only had 3 original liners (the MV Filipinas, MV Luzon and MV Visayas) plus one former refrigerated cargo ship from Europe (the MV Leyte Gulf) and one former ”C1-M-AV1” ship (the MV Samar) plus a few ex-”FS” ships that were not all in passenger service. By that year, William Lines had 6 fast cruiser liners already (the MV Cebu City, MV Misamis Occidental, MV Manila City, MV Cagayan de Oro City, MV Ozamis City and the MV Tacloban City) plus a former refrigerated ship from Europe (the MV Davao City) and 10 ex-”FS” ships in liner and overnight routes. Meanwhile, Sulpicio Lines had 5 fast cruiser liners already (the MV Philippine Princess, MV Don Enrique, Don MV Don Eusebio, MV Dona Paz and MV Dona Marilyn) plus 2 former refrigerated cargo ships from Europe (the MV Dona Angelina and MV Dona Helene), 4 other ships from Europe (the MV Dona Vicenta, MV Don Camilo, MV Dona Gloria and the MV Dona Julieta), the Don Ricardo and MV Don Carlos which were from Japan, the ex-”FS” ships Don Victoriano I and the MV Don Alfredo, the MV Dona Lily from Australia which was the size of an “FS” ship plus the local builds MV Ethel and MV Jeanette. On the balance, in 1981 Sulpicio Lines might already have a very slight pull over William Lines which was a very great comeback from the split of Carlos A. Gothong & Co. in 1972.

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The remains of Compania Maritima in Cebu

To repeat, even without the MV Dona Virginia and the MV Philippine Princess, the two Chinoy shipping lines were already ahead of Compania Maritima. And if the Compania Maritima, William Lines and Sulpicio Lines had rough parity in 1978 what probably tipped the balance were the three lost ships of Compania Maritima and the breaking-up of MV Mindanao in 1980. Four lost liners without replacements. And that is the problem of losing ships and not buying replacements.

From 1981 it was no longer just a matter of passenger-cargo ships as container ships were already taking a large chunk of the liner business (and in this type William Lines and Sulpicio Lines joined the race against early pacesetter Aboitiz Shipping Corporation while Compania Maritima did not). So actually by 1983, William Lines and Sulpicio Lines were running even less liners as some old and small ships were either laid up, sold or converted to just carrying cargo.

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MINTERBRO Port, the remains of Compania Maritima in Davao

In 1982, the MV Samar was broken up and in 1983 the MV Luzon was also broken up. Compania Maritima was already near extinction then. It was just the dying dance and after that it was already a battle between William Lines and Sulpicio Lines which is Number 1.

Is There Enough Cargo To Move Around?

In the last few years there has been an upsurge in the ships that move cargo. First, that became noticeable with the LCTs that became ore carriers of the black sand mining in a few provinces and particularly in Surigao where opening of mines close to the sea boomed. That happened because of the sudden great demand then of metals in China.

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An aggregates carrier LCT off Taganito, Surigao

Just after the peak of that demand, a fleet of brand-new LCTs built in China appeared in north Mactan Channel. That happened when the demand for metallic ores in China was beginning to wane. And so initially those LCTs especially those owned by Broadway One Shipping and Cebu Sea Charterers were just anchored in the channel. Those LCTs were only known by their numbers but in size those were bigger than the average Philippine LCT. Generally, their powers and speeds were also higher and better.

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Row of newly-arrived LCTs in north Mactan Channel

With nowhere to go these LCTs including those owned by others but also built in China (like the Poseidon LCTs, the Meiling LCTs, those owned by Premium Megastructures Inc., Adnama Resources, etc.) became aggregates carriers and Cargo RORO LCTs and in the latter it challenged in the business then dominated by Goldenbridge Shipping which had a route from Labogon, Mandaue to Hindang, Leyte. Sand is gold in Cebu because of its construction needs and it is not readily available in the island in quantity because of its upraised sea floor origins which meant just a lot of limestone. And so sand is transported from Leyte whose land is volcanic in origin and thus there is plenty of sand and hard rock. Aggregates carrier LCTs go as far as Samar and some also go to Bohol.

The value of Cargo RORO LCTs was highlighted when the super-typhoon “Yolanda” struck and lots of trucks have to move to Leyte and long queues of truck formed in Matnog and Lipata ports and there was also a lot of needed bottoms for trucks crossing from Cebu to Leyte. The LCTs filled this need and suddenly the Cargo RORO LCT segment was here to stay. It challenged not only old LCT operators like Mandaue Transport and Simpoi Shipping but also the overnight ferry companies operating ROROs that Roble Shipping even felt the need to charter LCTs from Asian Shipping Corporation (ASC), owner of many LCTs for charter. Now Cargo RORO LCTs connects many islands and it is also a viable transporter now of container vans from Manila to the Visayas and Mindanao, a mode pioneered by Ocean Transport that also started by chartering LCTs from Asian Shipping Corporation before acquiring their own China-built LCTs.

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On the left is an LCT of Asian Shipping Corporation chartered by Roble Shipping

I can understand the need and value of LCTs which have proven their uses and versatility recently and that is why it is still continuing to increase in number. But in the same period I also noticed the rise in the numbers of our container ships and general-purpose cargo ships which are mainly freighters on tramper duty. In general that is a surprise for me as I know our local inter-island trade is flat and intermodal trucks have already stolen a significant portion of their cargo and that can be shown in the queue of trucks in many short-distance crossings like in the routes to Panay, the routes to Eastern Visayas and Surigao and Cargo RORO LCTs are used by these intermodal trucks along with short-distance ferry-ROROs. Cargo RORO LCTs are also used by tractor-trailers hauling container vans to serve islands where local container ships are now gone or where the service is weak or the rate expensive. Examples of these are Samar, Leyte and Bohol islands.

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A Cargo-RORO LCT

I have been contacted by a writer doing the history of Delgado Brothers or Delbros which once dominated the Manila ports and which was also involved in shipping then (it was also the first employer of my late father). Delbros happened to by one of the two dominant leasers of container vans locally together with Waterfront and they cannot resolve the problem of flat leasing for several years already and they cannot fathom the reason why. I told her the reason is simple – the intermodal trucks are stealing their business.

But in recent years I have seen our container shipping companies add and add container ships. Most remarkable is Oceanic Container Lines (OCLI) which has the most number of container ships now. Notable too is Philippine Span Asia Container Corporation (PSACC), the new name of the controversial Sulpicio Lines. Lorenzo Shipping and Solid Shipping have also added a few. There are new players which are Moreta Shipping Lines which was formerly in overnight ferries, Meridian Shipping and Seaborne Shipping and these new players are also expanding their route networks. To this might be added Trans-Asia Shipping Lines Incorporated (TASLI) which now has a container ship to Manila.

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A deck loading ship

Another notable addition is Fiesta Cargo and Logistics (this is not the exact name of the company) which operates true deck loading ships. These ships have flat decks like those in LCTs and booms for cargo handling. Aside from this and container ships, the Asian Marine Transport Corporation (AMTC) also added a few RORO Cargo ships, their forte and choice of transport.

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A RORO Cargo ship

For NMC Container Lines and 2GO there was no noticeable addition although the latter have chartered container ships from Caprotec and they also charter ships from Ocean Transport (or is it Key West?). Hard to say because of the rumored split between the two. Escano/Loadstar meanwhile seems to be exhibiting a decline in their fleet.

In general-cargo ships a few companies showed newly-acquired ones and probably topping the list is Avega Brothers which from chartering ships from Asian Shipping Corporation went on a spree of acquiring trampers that though Manila in origin they regularly anchor ships now in north Mactan Channel. Medallion Transport and Roble Shipping also both acquired a significant number of freighters. Aside from the three mentioned many other shipping companies also added freighters to their fleet.

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Asian Shipping Corporation LCTs in their Mandaue port

Asian Shipping Corporation which specializes in chartering ships and operating barges aside from LCTs needs special mention because of the rate they are adding ships annually. As of last year their fleet total is nearly 200 ships already including the lowly tugs but MARINA (Maritime Industry Authority) has noted that they already have the biggest fleet in the country in terms of Gross Tonnage (GT), the traditional method of comparing ship and fleet size and that they have already displaced 2GO from its old Number 1 perch. 2GO temporarily regained the top ranking with their acquisition of the liner St. Therese of Child Jesus but I wonder if they did not slide to Number 2 again with the sale of the liner St. Joan of Arc. For an operator of supposedly “lowly” ships the achievement of Asian Shipping Corporation certainly has to be lauded.

But all of these leads me to the question, “Is there enough cargo to move around?” I know many of the trampers are just carriers of cement and other construction/hardware/electrical materials that they are practically “cement carriers”. Some are “copra carriers”. And these trampers are also carrier of bagged flour of various kinds and also other bagged products like fertilizers and feeds. But our freighters seldom carry rice and corn now unlike in the past. Ditto for cassava – the volume now is small.

Is there really a significant rise in the volume of these products? Maybe in cement and related materials because of the construction boom. But I wonder about the others. Are there other products being carried now? What I know is a lot of grocery items is now carried by the intermodal trucks.

Coal might be big now because of the rise in number of our coal plants. But freighters do not carry that. Other types of fuel are carried by the tankers.

There are incentives now from the government on the acquisition of new ships and it even opened a loan window with the government-owned Development Bank of the Philippines (DBP). Are shipping companies taking advantage of that just to hoard ships?

What I know is shipping rates in the country are high if compared to other countries. That can cover low cargo volume. The most visible show of that are our container ships. Seldom will one see them full or even near that. Well, operating ships is expensive especially since MARINA exactions adds to the cost.

Whatever, newer ships are always good. I just want to see where this would lead. Lower rates? Probably not. Better service? That is hard to measure on cargo ships. More availability of ships? Maybe one can count on that.

Anyway, this article is just meant as an update on one aspect of our cargo shipping.

Time Will Come The LCTs Will Take Away The Business Of The Container Ships

It was a friend of mine who worked as trusted man of someone high up in shipping who told me that MARINA has set it just to 30 or 35% load for a container ship to be profitable. I was aghast by that because that will mean terrible inefficiency and high rates for the shippers. That was twenty years ago and in that same time span our local shipping industry has been under attack for very high rates and it has been pointed out that from Davao it is much cheaper to send a container van to Hongkong or Singapore which are much farther than Manila. But even after two decades there has been no change in the situation of the industry. If there was, it is the rates went up geometrically higher. And of course that was unacceptable but our bureaucrazy only acts to change things if there is already an imminent revolt.

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Intermodal trucks for loading in BALWHARTECO Port in Allen, Samar

As they say water seeks its own path and one cannot hold or bottle it forever. One big response by shippers that I saw was in the widespread deployment of intermodal trucks that use our highways and then boards short-distance ROROs at the end of the road and then continue on to the next island. The intermodal truck might then still board another short-distance RORO to another island. I found out there are even trucks whose origin is Mactan island which are bound to Manila and will traverse Cebu island, Negros island, Panay island and Mindoro island before landing in Batangas port. And of course intermodal trucks from Manila or CALABARZON find its way to Davao regularly and there are some that reach as far as Zamboanga.

Consolidation” of the local cargo shipping industry especially the container sector has long been proposed by experts both local and foreign. But it has fallen into deaf ears and the national government will not wield the proverbial stick to make this come true and so it lays until now where it started, that is as proposals. “Consolidation” would have led to greater efficiency and thus lower rates. But locally, businesses and not only shipping wants to see efficiency not to lower rates (of course, they will pay lip service to that) but to higher profits. And so greed rules and trumps everything and the higher national interest and greater good do not matter in the end.

Our different shipping companies are republics of their own and historically they have never been into cooperation, consolidation or merger (except the “Great Merger” which produced WG&A and which had been a disaster to local shipping) even though some are related by blood. If there has been a CISO (Conference of Inter-island Ship Owners) in the past, it is only because they want to present a common front vis-a-vis the government and also to make sure that the agreed rates are being observed by all (however, in other countries that will ruled as “cartelization” and subject to penalties or even jail terms; but not here as that term is practically unknown and even Economics teachers here do not know that). Oh, well, actually the cartel master locally is MARINA which sets the rates. Historically, they set the maximum rates but like what happened to LTFRB they treat the maximum rate as also the minimum and MARINA in the end serves just the needs of the shipping companies and not the general public. But before it be misconstrued that they are servile to shipping companies, the truth is shipping companies fear MARINA as their livelihood and fortune is dependent on the decisions of MARINA. If the rates are drastically brought down then they might all go down.

That is the reason why the shipping companies will fight toe and nail for the retention of the Anti-Cabotage Law which bars foreign shipping companies from sailing local or inter-island routes. If the Congress (which has the power to repeal the Anti-Cabotage Law) allows the entry of the much more efficient and capable foreign ships then local cargo rates will drastically go down but our local shipping companies will drown. Regarding the Philippine Competition Commission (PCC), that entity will not amount to anything in shipping because that only checks mergers and mergers are a near-impossibility in shipping.

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LCT Raenell of Asian Shipping Corporation in Mandaue

And so shippers and other related interests will find new ways to bring down rates some other way. One of these is the employment of the cheap and cheap-to-operate LCTs which has only 1,000 horsepower on the average which is just about a third of the power of the container ships. True, they will probably only run at about 7 to 8 knots compared to the 11 to 12 knots of the container ships. So they will take three days to Cebu where a container van will only take two days. But, hey, the bulk of cargo is not express anyway and a difference of one day will not really matter, in the main. Nowadays if one really wants it fast one takes to the plane and use air cargo which is P20/kilo at the lowest now.

It is through the use of chartered LCTs from Asian Shipping Corporation that Ocean Transport had their start. Using big LCTs (by local standards), 94 TEUs can be fitted with the container vans stacked like Lego and handled by big forklifts. The LCTs cost P70,000 a day, fuel and crew included and so the transport cost one way is just over P200,000 not including cargo handling in Manila and possible cargo handling in Cebu. Plus of course other labor, office, yard and anciliary costs and maybe insurance. Under the table money, I have only the vaguest of ideas. But in this calculation one can see the movement of a TEU to Cebu via chartered LCTs is just P4,000, starting. That will not be the actual rate but one can see how low it is via LCT when the normal commercial rate for a TEU to Cebu is probably 5 times of that. The LCT might have just a capacity of 94 TEUs and the container van has 300 TEU but if they are only a third full on the average then the actual load of the two is just about equal and the LCT has probably only has a third of the horsepower of the container ship. The LCT usually has about 100% load. So it is very easy to see which is more efficient and why an LCT can give much, much cheaper rates.

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Roble Shipping was the next to follow the shipping model of Ocean Transport and like the first they were also very quiet about it. Maybe the two fear that if it becomes known widespread that the LCT mode is successful some shipping companies will lobby MARINA and MARINA will institute a crackdown and maybe cite “safety” again which is the usual bogey of MARINA. It has been a long time that the LCTs, being flat-bottomed and not that resilient against capsizing has been tagged with safety issues. It does not help either that being open-decked and having a low freeboard some issues were also attached by some to those. [Note: Ocean Transport and Roble Shipping now operates their own LCTs regularly carrying container vans from Manila to Cebu.]

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LCT Akira of Ocean Transport by John Carlos Cabanillas

The longest route I have seen LCTs bring container vans regularly is from Manila to Cagayan de Oro. And so locally it is proven now that LCTs can be container carriers for 500 nautical miles. I do not know if they are capable of Southern Mindanao routes which is up to 800 nautical miles but I think they can do it if needed. Of course, LCTs are normally earlier to seek shelter than container ships when there are storms. But if MARINA and the Coast Guard suspends voyages at 45kph wind speed then the container ships might not have an advantage anymore.

The LCTs are looked down upon by many but they should know that China which is already the biggest shipbuilding country in the world and is already a shipping power widely uses LCTs to move their cargo internally and on shorter distances. Actually most of our new LCTs now are from China and many came here brand-new. In terms of age, our LCTs might be younger than our container ships now. And LCTs are the backbone of our Cargo RORO LCT fleet which not only move trucks but also trucks and trailers bearing container vans especially to islands that are not served well by container ships like Bohol, Leyte and Samar.

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LCT PMI-3 from Leyte

If MARINA won’t crack down, I see intermodal trucks and LCTs further taking away the business of the container ships which is still growing in number but I know their cargo volume is not increasing. Consolidation would have been easy for them if they will just open their eyes and be open-minded and it does not mean that they would have to merge, an anathema to many executives as that might mean losing their positions and careers that they have built over the years. Actually the simplest consolidation is the swapping of container vans. There is no container company that has daily departures even from Manila and the simplest is they should load their containers to their partner shipping companies which has the nearest departure. That will mean ships being fuller and at the end of the month they can reconcile their figures and charges would have to be paid for the difference but of course it should be on friendship or partner rates.

With that, less ships might have to be employed, there would be less sailings and that would have to mean savings that should be passed on to consumers if they have any integrity. With consolidation too there might be enough containers vans to ports and islands that they have already abandoned or bypassed and so the container ships can come back there and sailing level might be maintained (now isn’t that neat?). Internationally, this system I mentioned is already being used and not only in shipping. I don’t see any valid reason why the local shipping companies can’t do it. It will only be impossible if their distrust of each other is too much and their owners and executives are too obtuse. The national government should also wield the stick after incentives are laid out. They can even set the rules and the system. It is high time already as for the past two decades after constant criticisms I have not seen our local container companies try to bring down container rates to acceptable world standards. They are just being kept afloat by the blood of the shippers. And that is why forwarder companies are making great strides and container shipping is just where they were two decades before. That is also the true reason they won’t venture out to foreign waters because they simply cannot compete. Regarding their charge that our ports are too shallow that is baloney because much bigger foreign ships use the same major ports that they do.

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LCT Poseidon 15 in Verde Island Passage

I wish the LCTs well for maybe it is them that will be able to bring down container rates even though they might not look modern or beautiful. If they drown the container ships then it is the fault of the container shipping companies themselves.

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.

The Battle for the Southern Mindanao Ports After The War And Before The Era of RORO Liners

Discussing this topic, the author wishes to clarify that the discussion will be limited to the period after World War II. There are not enough research materials yet before the war and in that earlier period Southern Mindanao was not yet that economically important to the country since the great wave of migration to the region only happened starting in the 1950’s and then peaking in the 1960’s and the 1970’s.

Talking of Southern Mindanao ports, these consisted mainly of Davao, General Santos (or Dadiangas) and Cotabato (which is actually Parang or Polloc port located in another town) and to some extent also Pagadian and Kabasalan in earlier times and also Mati and Bislig. Since ships generally used the western approach, inadvertently Zamboanga port will be included in this since all ships to Southern Mindanao port using the western approach will use that as an intermediate stop since it just lies along the route and it has a good passenger and cargo volume.

1955-apr-6-schedules

Gorio Belen research in the National Library

After World War II, shipping to Southern Mindanao boomed because it was the “new frontier” of the country. There was great migration by Christians from other parts of the country and this was encouraged and supported by the government to ease the “land pressure” in Luzon and Visayas which was the fuel then for the land unrest (read: Pambansang Kilusan ng Magbubukid, Sakdalista movement, Hukbalahap, etc.). The land of Mindanao was being opened through the building of roads and the bounty of the land and the forests were being exploited (without asking the say-so of the native peoples and that fueled the unrest of the latter decades; the Luzon land unrest was “solved” to be replaced by Mindanao unrest and war – what an irony and tragedy!). And so people and goods needed to be transported and in such a situation where “ships come where there is cargo” there was a battle for the Southern Mindanao ports among the local shipping companies. Davao was the primary route and port of Southern Mindanao and almost invariably the Davao ships will also drop anchor in Dadiangas (General Santos City).

At the outset, it was Compania Maritima which led the pack to Southern Mindanao after World War II as she was the biggest liner shipping company then with the most ships, half of which were big by local standards (that means a length of about 100 meters). The company possessed ex-“C1-M-AV1” surplus ships as compensation by the US Government for their ships lost during the war and also big cargo-passenger ships from Europe while the competition had no better than the small ex-“FS” ships from the US Army which have to seek shelter when the seas begin to roil.

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Gorio Belen research in the National Library

Among the Compania Maritima competitors to the Southern Mindanao ports in the late 1940’s and early 1950’s were Philippine Steam and Navigation Company (PSNC), Manila Steamship Company, De la Rama Steamship, William Lines Inc. and Escano Lines. Most of the liner shipping companies of the day then shirked from Southern Mindanao routes because it was taxing on the fleet as the ships needed two weeks for the entire voyage. So just to be able to offer a weekly schedule, two ships of the fleet must be devoted to a Southern Mindanao route.

It was Philippine Steam and Navigation Company (PSNC), being backed by Everett Steamship of the United States, which was more competitive against Compania Maritima as it also had ex-“C1-M-AV1” and ex-“Type N3” ships. PSNC was a venture between Everett Steamship and Aboitiz Shipping (and later with the end of “Parity Rights”, it passed on to the latter). Manila Steamship Co. was competitive, too since it also had a big fleet. However, this company quit shipping after the explosion and fire that hit their flagship “Mayon” in 1955. Meanwhile, De la Rama Steamship even quit earlier to concentrate on international shipping and being an agents after some local issues.

The year that Manila Steamship quit shipping, the new liner company Carlos A. Go Thong & Company joined the Southern Mindanao battle, too. In the mid-1950’s, with some shake-out in the shipping industry, there were less competitors and ships in this decade (because some really old ships have already quit along with some very small ones). It should be noted, however, that there were ocean-going liners that were originating from Southern Mindanao that goes to Manila first before proceeding to Japan and the USA. Some of those that provided that kind of service were Everett Steamship and Compania Maritima.

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Gorio Belen research in the National Library

In the 1960’s, passenger-cargo ships from Europe that were bigger than the ex-“FS” ships began to arrive in the Philippines and many of these were fielded to the Southern Mindanao routes. Among the users of that type were Go Thong and William Lines. Go Thong was also able to acquire the big World War II surplus “C1-A” ships like the “Manila Bay” and “Subic Bay”. Compania Maritima, however, bought brand-new liners and chartered big reparations cargo-passenger ships from the government-owned National Development Corporation (NDC) and so they held on to their lead in the Southern Mindanao routes in this decade. Meanwhile, Everett/PSNC was not far behind and they even used in Southern Mindanao their new liners from Japan, the “Elcano” and the “Legazpi”. Additionally, there was a new entrant in the late 1960’s, the ambitious Sweet Lines which was one of the beneficiaries of the quitting of General Shipping Company of local routes (the other was Aboitiz Shipping Corporation).

At the start of the 1970’s, Compania Maritima was still ruling the Southern Mindanao routes. But several very interesting developments happened in this decade. First, the big Go Thong/Universal Shipping which already exceeded Compania Maritima in size had broken into three shipping companies and Sulpicio Lines Incorporated, Carlos A. Gothong Lines Incorporated and Lorenzo Shipping Corporation emerged (until 1979 the operation of the latter two were joint). In a few years time, however, Sulpicio Lines grew fast and proved to be a strong competitor. In this decade, it was already slowly becoming obvious that Compania Maritima was losing steam especially as they regularly lost ships in storms. William Lines then was in a race with Sulpicio Lines to dislodge Compania Maritima from its perch. Everett Steamship meanwhile bowed out because of the end of “Parity Rights” of the Americans (and thus they are no longer allowed to do business as a Philippine “national”) and PSNC (their partnership with the Aboitizes) was merged with Aboitiz Shipping Corporation and the latter became the surviving entity. But with no new ships, Aboitiz Shipping Corporation bowed out of Southern Mindanao liner service. However, the combined Lorenzo Shipping Corporation and Carlos A. Gothong Shipping Lines (CAGLI) and Sweet Lines Inc. were still competing heavily in the Southern Mindanao routes in the 1970’s.

Two very important developments happened before the end of the 1970’s. One, containerization began and this changed the game of shipping. Where before it was just practically the liners that carried the cargo, now the carriers split into two, the container ships and the liners. Subsequently, the passenger capacity of the liners grew as they no longer have to devote a lot of space for cargo. By this time, the massive migration of Christians to Southern Mindanao has also boomed its population and consequently more need to travel.

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Gorio Belen research in the National Library

The second development was the introduction of fast cruiser liners that call on just one intermediate port (before a liner to Davao will usually call first in Cebu, Tagbilaran, a northern Mindanao port maybe, Zamboanga definitely and Dadiangas. So where before 10-knot ships like the ex-”FS” and ex-”C1-M-AV1” ships will take two weeks to complete an entire voyage and the faster ex-European passenger-cargo ships cycles every 10 or 11 days, the new fast cruisers complete the voyage in just a week. By my definition, fast cruisers of this period were the liners capable then of 18 knots. Usually, these were not converted cargo-passenger ships from other countries (these were fast cruisers even in Japan, usually). These were also luxury liners in the local parlance and one key feature of that is the availability of air-conditioning. With that truly luxurious suites and cabins became possible.

The fast “Dona Ana” (later “Dona Marilyn”) of Sulpicio Lines which came in 1976 tried to change the game by just having one intermediate port call, in Cebu. William Lines responded with the even faster cruiser “Manila City” (the second) in 1976 which only had Zamboanga as its intermediate port. With their speed and the use of just one intermediate port, the “Dona Ana” and “Manila City” was able maintain a weekly schedule. Although the luxurious flagship “Filipinas” of Compania Maritima was also fast at 17 knots, she dropped by many intermediate ports and so she cannot maintain a weekly sailing. Compania Maritima never dropped the old style of many intermediate ports.

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Photo credits: Times Journal and Gorio Belen

Gothong+Lorenzo was not able to respond well to this challenge (though they tried) as they had no true fast cruiser liners. So, they had to use two ships for a route to maintain a weekly sailing or three ships to maintain a cycle of every 10 days. Sweet Lines also tried but like Gothong+Lorenzo they also have no fast cruisers assigned to Southern Mindanao (they had two though in Cebu, the “Sweet Faith” and the “Sweet Home”). Compania Maritima and Sweet Lines were the users of three ships to the Davao route to be able to cycle a ship every 10 days. Aboitiz Shipping, meanwhile, with no new ships simply dropped out of liner shipping to Southern Mindanao and just concentrated on container shipping.

Although William Lines and Sulpicio Lines already had fast cruiser liners to Southern Mindanao they also still used their old passenger-cargo ships to the region in the late 1970’s in conjunction with their fast cruisers liners. So with them the passengers have a choice of the fast or the slow which was also less luxurious. Fares also differed, of course.

In the container segment of shipping, the battle was toe-to-toe. Aboitiz Shipping rolled out the Aboitiz Concarriers, William Lines had the Wilcons, Sulpicio Lines fielded the Sulcons (Sulpicio Container) and later Lorenzo Shipping sailed the Lorcons (Lorenzo Container). Many of the ships mentioned were once general cargo ships converted into container ships. [The later series Aboitiz container ships were named Superconcarriers and Megaconcarriers.] Lorenzo Shipping then split with Carlos A. Gothong Lines Inc. and the latter then quit Southern Mindanao routes to concentrate on the Visayas-Mindanao routes. [Later, Lorenzo Shipping quit shipping altogether and sold out to the Magsaysay group before they were reborn as the Oceanic Container Lines.]

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Gorio Belen research in the National Library

In passenger liners, William Lines and Sulpicio Lines continued to battle in the Southern Mindanao ports in the 1980’s using fast cruiser liners. Sulpicio Lines had the edge as they had more fast cruiser liners [William Lines still had to make do with their graying former European passenger-cargo ships]. For a while until they quit in 1984, Compania Maritima was battling Sulpicio Lines more than toe-to-toe. After all, Southern Mindanao was the area of concentration of Compania Maritima and in Davao they even have their own port, the MINTERBRO port. Compania Maritima concentrated their best liners, the “Filipinas”, “Visayas” and “Mindanao” plus their passenger-cargo ships “Leyte Gulf” and “Dadiangas” in the General Santos/Davao route before the company’s life expired. While the three were battling, the other liner companies were not able to respond except for Sea Transport Co. and Solid Shipping Lines which were not operating passenger liners. One independent liner company, the Northern Lines Inc. which had routes to Southern Mindanao also quit at about the same time of Compania Maritima at the height of the political and financial crisis leading to the mid-1980’s.

Before the era of RORO liners, there were already more container ships to Southern Mindanao than passenger liners. That how strong was the growth of that new paradigm. This new dominant paradigm even forced the fast cruisers to carry container vans atop their cargo holds as that was already the demand of the shippers and traders.

In the 1980’s before the advent of RORO liners starting in 1983 there were actually only a few fast cruiser liners doing the Southern Mindanao routes. Among those was the “Dona Ana”, the pioneer fast cruiser of Sulpicio Lines to Davao. This ship was later pulled out to replace “Don Sulpicio” in the Manila-Cebu route as the ship caught fire and she was renamed to “Dona Marilyn”. However, the fast cruisers “Don Enrique” (the later “Davao Princess” and “Iloilo Princess” and “Don Eusebio” (the later “Dipolog Princess”) alternated in the Manila-Cebu-Davao route. In 1981, when the “Philippine Princess” came, “Dona Marilyn” was reassigned to the Cotabato route. She was the first fast cruiser liner in that route.

Don Sulpicio, Dona Ana and Don Ricardo

Photo by Jon Uy Saulog

On another noteworthy trivia and clarification, Sulpicio Lines also fielded the third “Don Carlos” in the General Santos route in 1977. This ferry was a former vehicle carrier in Japan and so she had a cargo deck and a ramp. However, she was not used as a RORO ship. The ramps were just used to ease the loading of livestock from Gensan. This city sends a lot of those live commodities to Manila. She was actually a “WOWO” ship (Walk on, Walk Off). However, she also takes in heavy equipment and trucks bound for Gensan dealers. So technically “Don Carlos” was the first RORO to Southern Mindanao. But she did not use container vans.

For William Lines, the second “Manila City” (the first “Manila City” was an ex-”FS” ship) was their only fast cruiser to Southern Mindanao for a long time in this decade. Most of the passenger ships they were using in the region were former European passenger-cargo ships like what Sweet Lines were using (the company was also using the “Sweet Grace” to Southern Mindanao which was a brand-new liner in 1968 but was not that fast). Approaching the end of the decade only three national shipping companies were left sailing liners to Southern Mindanao – Sulpicio Lines, William Lines and Sweet Lines. One of the reasons for that was the crisis spawned by the Aquino assassination halved the number of liner companies in the Philippines. It was not because the traffic to Southern Mindanao dropped considerably. In container shipping to Southern Mindanao before the RORO liners came there were six players – Aboitiz Shipping Corporation, William Lines, Sulpicio Lines, Lorenzo Shipping Corporation, Sea Transport Company and Solid Shipping Lines.

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MV Don Carlos (Gorio Belen research in the National Library

In 1983, a new paradigm arrived in the Southern Mindanao routes and it ushered a new era. These are the RORO (or ROPAX) liners which were even bigger and just as fast as the fast cruiser liners. And they can carry more container vans than the fast cruisers. Later, RORO liners were even faster as they can already sail at 20 knots. Can anyone hazard a guess which was the first RORO liner of Southern Mindanao?

I will discuss the era of RORO liners in Southern Mindanao in a subsequent article (as I do not want this article to be too long and unwieldy). With that, it will be a discussion of the recent history of the Southern Mindanao routes and liners.

Container Ships Also Sink Our Liners

In the past, before 1980, there was no conflict between the our liners and the container ships. First, container ships did not exist before the late 1970’s. Second, before that time, general cargo ships were not many as it is our liners that were mainly carrying the inter-island cargo that should be transported fast and were not in bulk. That was the reason why even though our production and the number of people were not yet as high like today, there were so many liners existing with as high as 90 liners at its very peak.

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Gorio Belen research in the National Library

In the early 1970’s, the Sea Transport Company came into existence. What was notable for this new company is they offered regular express cargo service to Mindanao which means a direct service and aside from loose cargo, their ships were able to carry small container vans which were non-standard as in they were offering 8-foot containers which they themselves designed (it was rectangular in shape). In due time, they also shifted to standard container vans and they fielded pure container carriers.

In 1976, Aboitiz Shipping Corporation converted one of their general cargo ships, the P. Aboitiz into a container carrier. Conversion like this was not difficult because only some internal structures need to be modified so a container van can be slot in and that also means modifying the holds and the hatches. The grabs of the booms also have to be modified by a bit so it can handle a container van.

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Gorio Belen research in the National Library

In 1978, containerization was already in full swing when Aboitiz Shipping Corporation added more container ships and William Lines Incorporated followed suit. The next year, in 1979, Sulpicio Lines Incorporated also joined the bandwagon to be followed in the next year by Lorenzo Shipping Corporation which had already split from its merger with Carlos A. Gothong Lines Inc (CAGLI). Negros Navigation Company also joined this new paradigm in 1980. In 1981, Sweet Lines Incorporated also followed suit but they used their old company name Central Shipping Corporation. Among the major liner companies then, it was only Compania Maritima which did not join this new paradigm.

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Gorio Belen research in the National Library

These new container services offered direct sailings as in there were no intermediate ports. With direct service, the container ships might be a little slower than the liners (except for the fast cruisers) but their transit times were not worse than the liners (except to Cebu) because they don’t lose time in an intermediate port or ports. With the speed, convenience, security (no pilferage), lack of damage and contamination, soon the shippers were already shifting en masse to the new container services.

In the liner crisis of 1980 when many liners were deactivated and laid up, it seems the main cause of that was the emergence and immediate success of the container ships and container shipping. Maybe the liners suddenly found they don’t have enough cargo and hence they can’t maintain the old sailing schedule and from the outside it looked like that suddenly there was a “surplus” of bottoms (actually the liners complained of that).

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Gorio Belen research in the National Library

In December 1979, the first RORO liner, the Dona Virginia of William Lines came. This RORO and those that came after her were capable of carrying container vans especially the XEU or 10-foot container vans that can be loaded aboard by the big forklifts. Soon even the fast cruiser liners were also carrying container vans atop their cargo holds especially at the bow of the ship. Some can also carry container vans on a platform in the stern.

Locally, I did not see a new paradigm take hold as fast as container shipping. The ROROs even took longer to be the new paradigm. In containerization, there was even a rush to convert general cargo ships into container ships. All the “new” container ship of Lorenzo Shipping Corporation were converts at the start. The other container shipping companies bought general cargo ships from Japan and converted them into container carriers. Our first container ships looked like general cargo ship unlike the modern container ship which does not look like general cargo ships (and nor can they handle loose cargo).

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In just a little over a year William Lines had 5 container ships (Gorio Belen research in the National Library)

The emergence of the RORO liners even pushed containerization faster as that new kind of ferry is ready-made not only for vehicles or rolling cargo but also for container vans, wheeled in atop chassis (which means atop trailers) or not (if not wheeled then big forklifts “wheeled” them in). There were not yet reach stackers in the early years of our containerization to handle the container vans.

In the 1980’s and the 1990’s, the liners can still hold off the container ships. The reason was there were no budget airlines yet (Philippine Airlines fares then were really stiff) and there were no intermodal buses yet in the bulk of the islands (it was only strong in Eastern Visayas, their pioneer area). And liners can still pack in the passengers (even up to “overloading” or overbooking point) because people has already learned how to travel and there was a great push for migration to Metro Manila (which later led to the overcrowding of this metropolis).

However, when budget airlines and the intermodal buses came in droves, the passengers of the liners dropped. The 2,000 to 3,000 passenger capacity slowly became “too big” and hence the national shipping companies no longer fielded liners with capacities such as this in the new millennium. Aboitiz Transport System (ATS) also tried to reduce passenger capacity and increase cargo capacity by converting some of their liners to have two decks for rolling cargo like what they did in SuperFerry 12, SuperFerry 9 and SuperFerry 2.

Superferry 12

Photo by Edison Sy

Can the liners compete with container ships when the passenger demand dipped? The answer is a plain “No way”. Liners usually have more than three times the horsepower of a local container ship (and it is single-engined which means less spare parts are needed) and yet the local container ship usually have three times the container capacity of a RORO liner. This even became more pronounced when the regime of high oil prices came in the first decade of this millennium. Per fuel prices alone, the container ships can carry each container van much cheaper than what a liner can.

Container vans also do not need the amenities needed by the passengers. Moreover, it does not need the service expected of the passengers which need to be fed and be given more than decent accommodations plus some entertainment. Because of that, the crewing needs of a liner is far higher than that of a container ship. All of those means more expense of the part of the liner company. Besides, a RORO liner is more expensive than a container ship for the same size and its insurance is higher.

Ever since the 1980’s, even when the passenger demand was still great, the national shipping companies were earning more from cargo than their passengers. That is true even today when 2GO admits that almost 70% of their revenues are from cargo (and to think under their roof is SuperCat which widens the passenger revenues). Definitely their investment for liners is greater than their cargo ships. Maybe it was only loyalty to their passengers and passenger shipping why they were not quitting this segment. Maybe it is also because of inertia which means just keeping doing the old things.

Lorcon Dumaguete assisted by tugs

If we look at the recent years we can see that for every liner acquired at least 7 container ships were acquired and this is even a conservative estimate. If we look at the last 10 years starting from 2006, only 11 liners came to our shores and that includes the 3 Cebu Ferries, two of which are still used as overnight ships although already converted into small liners. Meanwhile, MARINA registered 80 or more newly-arrived container ships in the same period. These are the container ships of Oceanic Container Lines, Sulpicio Lines/Philippine Span Asia Carrier Corporation, Lorenzo Shipping Corporation, NMC Container Lines, Solid Shipping Lines, Negros Navigation/Caprotec Corporation/2GO, MCC Transport Philippines (MCCTP), Moreta Shipping Lines, Meridian Cargo Forwarders, Seaview Cargo Shipping Corporation, Escano Lines/Loadstar Shipping Company and West Ocean Lines and Transport acquired in the last ten years. Now how many container lines is that compared to a sole passenger liner company?

There are few liners sailing now and all are under just one company which is 2GO (since Romblon Shipping Lines has already quit). Meanwhile, container ships are still mushrooming and more container shipping companies are joining the field. Even 20 years ago there were already more container ships than liners. Now the container ships are already outstripping the liners in number. And the trend holds true year after year.

The question is why? Well, the simple answer is the shipping companies won’t invest in liners as it does not make sense. More revenues can be earned from container shipping at less investment with less hassles from regulations and supply needs (like the food needed by the passengers). So why would they enter passenger liner shipping? Better “pets” like containers vans rather than people like the passengers who can raise a ruckus and if the ship sinks then goodbye to all the advertising and service spent for the goodwill. If a cargo ship sinks, the uneducated public and the media almost won’t mind at all.

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A Cargo RORO LCT by Asian Shipping Corporation

If cargo is the bread and butter of shipping it will now go to the container lines because they can actually offer the lower shipping rates. If not it will go to the intermodal trucks which has even lower rates. And arriving now recently are the Cargo RORO LCTs which carry container vans (even from Manila) like those of Roble Shipping Incorporated, Ocean Transport and Asian Shipping Corporation. This new paradigm can offer even lower rates than the container ships.

Sometimes it looks like liners are already passe. But I don’t want them to go because I prefer them over planes and the intermodal buses are sometimes too tiring especially those who are no longer young.

Will the liners survive? Now, that is one question I would not like to answer.

The Merged Carlos A. Gothong Lines Inc. and Lorenzo Shipping Corporation Was Still a Great Shipping Combine Before Their Break-up in 1979

In 1972, the first great break-up in Philippine liner shipping after World War II happened. The then No. 1 shipping company in the Philippines, Carlos A. Go Thong & Co. broke when its general manager Sulpicio Go decided to go it all alone. The old company then just exceeded the old No.1, the Compania Maritima which was already in a death spiral but nobody realized it then considering that as late as 1968 and 1970 Compania Maritima still purchased great liners with the one purchased in 1968 a brand-new one from West Germany (the Filipinas which became their flagship).

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The Sulpicio Lines schedule in 1974 (Gorio Belen research in the Nat’l Library)

Sulpicio Go then founded Sulpicio Lines Inc. with 16 ships coming from the old company. Of the 16, twelve were liners and the others were regional ships. Still with that size, Sulpicio Lines started with a Top 5 ranking in the local totem pole of shipping companies. Not bad for a start especially their fleet had many liners that came from Europe.

The remnant of Carlos A. Go Thong & Co. became the Carlos A. Gothong Lines, Inc. (CAGLI) which still bears the name of the founder and the other one was Lorenzo Shipping Corporation (LSC) which were owned by the siblings of the owner of CAGLI. For strength, of course, and to better withstand the tremors of the splintering, the two pooled operations but they retained different names. From the billing one can surmise that CAGLI was at the helm of the combine. But if one analyzes the fleet holdings, it would look like Lorenzo Shipping Corporation was the stronger one with more ships but this was not apparent to the public.

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The CAGLI + LSC schedule in 1974 (Gorio Belen research in the Nat’l Library)

One of the weakness of the CAGLI+Lorenzo Shipping combine was their lack of good liners. Out of the 10 liners from Europe that arrived for Go Thong in 1963 to 1969, only four went to the combine. 6 of the 10 went to Sulpicio Lines and 3 went to CAGLI but 2 of those were graying ex-“C1-A” ships which were World War II surplus ships that were broken up anyway in 1973. Only one of the 10 liners from Europe went to Lorenzo Shipping Corporation. Well, even the liner Dona Angelina (the former Touggourt) that came in 1972 also went to Sulpicio Lines.

Another retained ship of Carlos A. Gothong Lines Inc., the Sarangani Bay which came from the National Development Corporation (NDC) and was a former ship of the Maritime Company of the Philippines (the international line of Compania Maritima) was also broken up and even earlier, in 1972. Another retained ship, the Dona Paz (the former Dona Hortencia; this was a different and earlier ship than the infamous one which sank off Mindoro in a collision with the tanker Vector), Go Thong’s only liner from Japan was disposed off in 1974.

With those disposals Carlos A. Gothong Lines Inc. began buying small cruiser liners from Japan which were just in the 50-meter class, in the main, which were mainly good for the secondary lines as it were no bigger than the ex-”FS” ships. Lorenzo Shipping Corporation did not dispose much but it also began buying small liners from Japan and those were slightly bigger than what CAGLI was buying. Well, it seems the two companies were affected then by the fast devaluing peso which made ship acquisitions more expensive. Together the combined CAGLI+LSC fielded those and their few retained ex-”FS” ships against the competition.

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1977 CAGLI + LSC schedule (Gorio Belen research in the Nat’l Library)

The combine was not shabby as some might think. They just don’t have the glitz and the glitter and they used cargo ships to augment their fleets. The biggest shipping companies then can field 15 passenger-cargo ships from the mid-1970’s and the list is short: Aboitiz Shipping Corporation (including subsidiary Cebu-Bohol Ferry Company), William Lines Inc. and Sulpicio Lines Inc. The combined CAGLI+LSC was able to match that! Compania Maritima has less ships but their ships were bigger.

In reckoning, that meant CAGLI+LSC combine was in the Top 5 of the national liner shipping field and maybe even higher just before the break-up when in 1979 they had a total of 24 ships. Well, that is not bad and it is even surprising for a remnant of a big shipping company. But that will also show how big Go Thong will then be if they did not break up! If they did not then they will have over 30 liners, the same number as WG&A at its peak although admittedly the latter’s ships were bigger and better.

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1979 schedule of CAGLI + LSC (Gorio Belen research in the Nat’l Library)

What changed in the combine, however, was they were no longer challenging for the prime Manila-Cebu route as they didn’t have good liners for that. The primary liners of competition were simply better than theirs and they don’t have the fast cruiser liners (like Sweet Faith, Sweet Home and Cebu City) that were already dominating the Manila-Cebu route then. However, they were making a spirited fight in the Southern Mindanao and Northern Mindanao ports and routes. They were still not beaten.

In 1979, a new paradigm began to appear and appear fast in the local shipping scene, the container ships. Before, it was the passenger-cargo ships including the passenger-cargo liners which were carrying the cargo. If liner companies have cargo ships, it was very few and some didn’t even possess one. Now with the shift, it seems it was already de rigeur to acquire one including the associated container vans. It looked it is the only modern and safe way after all the headaches and complaints in the damages and pilferage of loose cargo loading (LCL).

If one studies the following course of events, it seems Carlos A. Gothong Lines Inc. and Lorenzo Shipping Corporation had a difference of opinion in how to handle the completely new and threatening paradigm, that of container shipping. CAGLI voted to leapfrog to ROROs while LSC voted to play in the container trade and even withdrawing from passenger shipping eventually. And this might have provoked the split between them.

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This later became the Dona Anita in the CAGLI + LSC fleet (Gorio Belen research)

The two then played not only different paradigms but also two different areas of concentration. Carlos A. Gothong Lines withdrew from the Southern Mindanao ports and routes while Lorenzo Shipping Corporation concentrated there.

But how they went from 1980 and on will definitely require a different article as the paths of the two companies diverged already.

Abangan!

Shouldn’t We Be Downsizing Our Liners Now?

In the ten years after the end of World War II, the bulk of our liners were ex-”FS” ships with a sprinkling of former “F” ships, former “Y” ships and former small minesweepers of the US Navy which were even smaller ships. The first-mentioned ship was only 55 meters in length. Passenger capacity then of 200-300 were normal. The built capacity was not too high as our population was still small then with a little over 20 million people and besides, the country and the economy were just beginning to recover from the devastation of the Pacific War

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An ex-“FS” ship (Photo credits: Manila Chronicle and Gorio Belen)

In the next decade after that, there came the lengthened former “FS” ships which are over 60 meters in length with three decks. Passenger capacities then rose a bit. The lengthening of ex-”FS” ships, which was still the dominant liner type then was a response to the growing capacity need because the population was beginning to increase and trade was also on the rise. In 1960, our population already rose to 27 million.

In this period, there were no other sources yet of new liners as the European market was not yet discovered except by Compania Maritima and practically there were no surplus ships yet from Japan. It is true that we then already had some big ships mainly in the form of ex-”C1-M-AV1” ships which were US surplus from the war and former European passenger-cargo ships in Compania Maritima’s fleet. These big liners (by Philippine standards) averaged some 100 meters in length.

1971 MV Samar

An ex-“C1’M-AV1” ship (Photo credits: Philippine Herald and Gorio Belen)

In passenger capacity, however, those big liners then were not even double in passenger capacity compared to lengthened ex-”FS” ships. It was normal for them to have cargo holds in the bow and in the stern of the ship with the passenger accommodations in an “island” at the middle of the ship or amidship. Those big liners normally had only about 500 persons in passenger capacity.

Actually, when the European passenger-cargo ship Tekla came in 1965 to become the Don Arsenio of Carlos A. Go Thong & Co., she was then already tops in the Philippines in passenger capacity at about 700 persons. To think Go Thong has the tendency to maximize and pack it in and that ship was already 110 meters in length and one of the biggest in the country. [Well, liners of the 1990’s of that length already had more than double of that in passenger capacity.]

ELCANO (3)

Elcano by suro yan

In the middle of the 1960’s, big ships from Europe started to arrive for Go Thong and William Lines and also for Compania Maritima which had been buying ships from Europe right after the end of the war. These shipping companies had the long routes then which extended up to southern Mindanao which had many intermediate ports. Hence, big capacity matters to them. PSNC (Philippine Steam and Navigation Company) which also had routes to southern Mindanao was using ex-”C1-M-AV1” ships or if not they were using their luxury liners Legazpi and Elcano which were 87 meters in length (the two were sister ships).

It was the pattern that as the years went by the ships got bigger and its passenger capacities rose. That was a function of our country’s population increasing and hence also its trade because more population needs more commodities and goods. I am actually interested in the trivia which liner first had a 1,000 passenger capacity but right now I don’t have that data. Maybe that ship emerged sometime in the 1970’s.

In 1970, we already had a population of 37 million. And one change was Mindanao was already colonized, its population was growing fast and its new people had to connect to the rest of the country because this time most of the population of Mindanao were no longer native-born as in they were migrants from other parts of the country.

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Don Sulpicio  (Research by Gorio Belen in the National Library)

One benchmark in capacity was the Don Sulpicio which became the Sulpicio Lines flagship when she came in 1975. She had a passenger capacity of 1,424 (this could be the latter figure after refitting from a fire). But her sister ship Dona Ana has a bigger net tonnage and might had a bigger passenger capacity especially since her route was Davao while Don Sulpicio‘s route was only Cebu. The Don Sulpicio later became the infamous Dona Paz which supposedly loaded 4,000 plus passengers (guffaw!)

These two ships were only in the 90-meter class but one thing that changed with the arrival of the cruisers that were not formerly cargo or cargo-passengers ships is that they had full scantling already so the passenger accommodation stretches from the bridge to the stern of the ship. And one more, the liners became taller with more passenger decks and it is even up to bridge or navigation deck.

Of course, their spaces were not as big as the big 1990’s liners. Riding a 1970’s liner, one would find that all the spaces are “miniaturized” from the size of the bunks to the spaces between the bunks, the tables and the restaurants and the lounges. They were simply a different beast than their counterparts two decades later where spaces and amenities were really ample.

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Research by Gorio Belen in the National Library

In the early 1980’s, passenger capacities of over 1,000 was already commonplace with the biggest liners in the 110 and 120 meter class and with some featuring four passenger decks already. Actually as early as 1979 with the arrival of the sister ships Don Enrique and Don Eusebio which were southern Mindanao specialists, their capacities already touched 1,200 and yet they were only in the 110 meter class. The two were the latter Iloilo Princess and Dipolog Princess, respectively.

Actually, passenger maximization was already the game then as even 70-80 meter liners built in the 1970’s and early 1980’s, both cruisers and ROROs, already had capacities averaging 800 or so persons. These were the pocket liners in the 1980’s when the former smallest, the lengthened “FS” ships were already bowing out. In 1980, the country’s population already reached 48 million. With the development of the roads even the people of the interior were already traveling.

1980 Dona Virginia

Photo credits: Daily Express and Gorio Belen

On December of 1979, the first ship to reach 2,000 in passenger capacity arrived. This ship was the flagship Dona Virginia of William Lines. It was also the longest liner then in the country with a length of 143 meters, the longest then in our ferry fleet. And to think the Dona Virginia was not even a tall ship.

In 1988, further bigger liners arrived in the country. The Cotabato Princess which was also a southern Mindanao liner also reached 2,000 in passenger capacity. Its sister ship Nasipit Princess also had the same capacity. Both were 149 meters in length. But the new champion was the very big Filipina Princess which had a passenger capacity of over 2,900. This great liner had a length of 180 meters.

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In the 1990’s, liners of 2,000-passenger capacity or a little less became commonplace. The liner with the biggest ever capacity that existed here was the Princess of the Orient with a passenger capacity of 3,900. It was the longest-ever ship that sailed here at 195 meters. Other ships of this era that had passenger capacities of over 3,000 were the Princess of the Universe and the Princess of Paradise. Both were over 165 meters in length. All the ships mentioned from Cotabato Princess up to Princess of Paradise were liners of Sulpicio Lines.

Even with these high capacities of 2,000 and over the liners were able to pack it in in the 1990’s. I was once a passenger of the Princess of the Paradise on a Christmas trip when all bunks were taken (maybe if there were vacancies it was in the cabins). I also had a same experience on a June trip aboard the Our Lady of Akita (the latter SuperFerry 6) and the crew had to lay mattresses in the hallways because the ship was overbooked. And that ship have a passenger capacity of over 2,600. [Maybe we were technically not “overloaded” as there might have been vacancies in the cabins.]

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Princess of the Orient from Britz Salih

But things began to change in the new millennium. Maybe there was already a surplus of bottoms because there was a race then to acquire liners in the term of President Fidel V. Ramos as it was encouraged and supported. But budget airlines also came along with the intermodal buses. The demand for ship bunks began to slacken and the liners can no longer pack it in like before.

This trend was reflected in the liners fielded starting in 2000. Among the liners of the new millennium only SuperFerry 17 and SuperFerry 18 reached 2,000 in passenger capacity and just barely. And to think they are 174 meters in length. The new liners of Aboitiz Transport System already had two wagon decks instead of four passenger decks. But on a look-back the two wagon decks were also not fully loaded.

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Photo credit: port of douglas

The liner acquisitions of Sulpicio Lines in the new millennium both did not reach 2,000 passengers in capacity. Not even the very big Princess of the Stars, the Philippines’ biggest liner ever. So even Sulpicio Lines recognized that passenger demand was already declining. But unlike Aboitiz Transport System (ATS), they did not convert liners to have two cargo decks. Well, unlike ATS, Sulpicio Lines have many container ships to carry the container vans.

After 2005, only Aboitiz Transport System, Negros Navigation and latter 2GO still acquired liners (excepting Romblon Shipping Lines). None had a passenger capacity that reached 2,000. Some even had passenger capacities of less than 1,000. Most had two wagon decks that does not get full.

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SuperFerry 21 by Nowell Alcancia

If liners can no longer get full in passengers and in container vans then what is the use of acquiring liners of 150 meters length and with over 20,000 horsepower? It is useless. Liners should have lower horsepower now because fuel is the number one expense in shipping. There is also no use now running them at 19 or 20 knots. The overnight ferries have shown the way. Even though their ships are capable of higher speeds they just use economical speed now. No more racing.

Actually, the new overnight ships like what Cokaliong Shipping Lines is acquiring could be the new liners. These average 80 meters in length. Or maybe ships a little bigger than those could be acquired. And that will be like the former Cebu Ferries that were pulled out from the Visayas-Mindanao routes. Their length averages 95 meters. The engine power of all of these are all not topping 9,000 horsepower and yet they are capable of 17-18 knots if needed and that was the range then of many liners in the 1990’s.

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Our Lady of Lourdes by Ray Smith

I think the new size paradigm of the liners should just be about 100 meters maximum with a horsepower of 10,000 or less and a speed of no more than 18 meters. That will be like the smaller liners of the late 1980’s like the Our Lady of Fatima and the Our Lady of Lourdes of Carlos A. Gothong Lines Incorporated (CAGLI) which were 101 meters in length and had 8,200hp. The Tacloban Princess of Sulpicio Lines in that era was 98 meters in length had engines of 8,000hp total. Yet, all three were capable of 17 knots here.

Maybe another and probably better paradigm were the former Our Lady of Medjugorje and the Our Lady of Sacred Heart also of CAGLI. Both were former RORO Cargo ships in Japan but were beautifully refitted here. Both were 123 meters in length but only had 9,000 and 8,000 horsepower, single-engined. The passenger capacity of the two even averaged over 1,500 passengers. They might not be too speedy at about 16 knots but we have to be practical and have to scale back. In amenities and space, the two were good. The former SuperFerry 3 of Aboitiz Shipping Corporation is also a good model. At 118 meters, 9,300 horsepower, 16 knots she was a credible liner then with a passenger capacity of 2,000 . All the quoted speed were when they were already running here when they had additional metal and the engines were no longer new

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Our Lady of Medjugorje from Britz Salih

But technology has improved and for the same engine horsepower a ship can be faster. Take for example the Trans-Asia 3 of Trans-Asia Shipping Lines Incorporated. At only 9,000 horsepower and 110 meters in length, she is still capable of 18 knots here.

If liners are smaller with smaller engines then maybe weaker routes abandoned might be viable again. I think Aboitiz Transport System and 2GO had to scale back on routes because their liners and its engines were too big for the weaker routes. They tried to shoehorn a 150-meter liner in the like of Tagbilaran. No liner of that size did a Tagbilaran route before. Like even at the peak of passenger shipping no shipping company sent a liner of that size to Roxas City.

But government also has to help. Maybe, one possible step maybe is to limit the number of container ships. There might be too many of them sailing already. It is growing at a rate much ahead of our trade and production growth. So it simply diminishes the capability of a liner to be viable.

In the past before 1978, our cargo is being carried by the passenger-cargo ships. That was the reason why there was so many liners then as in over 60 in total and even 90 in the 1960’s when ships were smaller and ex-”FS” ships still dominated. What happened next is while our inter-island container fleet is growing, our liner fleet was also growing smaller because cargo is also being carried by the container ships.

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Research by Gorio Belen in the National Library

On the same route there is no way a liner can carry cargo cheaper than container ships. For the same length the container ships have much less smaller engines, the acquisition cost is much less, insurance is smaller and crewing is much smaller too and there is less regulation. Of course, they are slow. But let upon liners in competition they can practically sink the liners. I heavily doubt if our government functionaries understand this relationship and history.

It might be anti-competitive but if the government does not intervene I think our liner sector will sink and be wiped out. One possible intervention even is to decree that vehicles can only be carried by the liners. This will be added revenue for the liners. Or that liners should have fuel that is cheaper. Of course some will balk at that and suspicions of fuel diversion will always be aired. But good controls can be put in place. Unless we as a people is really that corrupt and bribable.

As it is, 2GO is profitable now when the world market prices of oil plummeted. But then one thing that worries me is their fares on the average are not lower than the budget airlines and the intermodal buses. With longer time of travel they cannot compete with budget airlines in the long run. And with frequencies that are not daily the passengers will not really wait for them.

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Maybe we should go back to this size

If the government wants the liner sector to stay it cannot just be verbal encouragement. Press or praise releases and promises are also next to nothing. There should be concrete steps and a program if they really want to save this sector. But is there anybody in government high enough that really understands this sector?

The government can put out all the verbal encouragement for other entities to enter this sector but I don’t think those who know shipping will enter this segment as things stand now. Downsizing is maybe one step that can arrest the downslide of passenger liner shipping.

The Last Stand of Compania Maritima

In the postwar years, Compania Maritima stressed routes going to southern and western Mindanao (because ships going to southern Mindanao dock in Zamboanga first). It was easy for them since they had liners bigger than former “FS” ships, a luxury not available to their competitors and they had more ships (which is needed since the route were long and takes time to come back). That period Compania Maritima was the biggest shipping company in the Philippines and half of their fleet were big ships. In terms of big ships, they then had the most in the country.

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Photo credits: Manila Chronicle and Gorio Belen

Most ships running the southern Mindanao routes were former “FS” ships which were once small cargo ships of the US Army in World War II. In those routes, Compania Maritima were using former passenger-cargo ships from Europe and there was a whale of a difference between those and the former “FS” ships. The extra space and speed matters a lot and smaller ships were simply more bouncy in inclement weather or when the monsoons are blowing hard.

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Their competitors William Lines and Go Thong were just using former “FS” ships in the route and in the case of the latter it was even using lengthened ex-”F” ships. PSNC (Philippine Steam and Navigation Co.) meanwhile has mixed ex-”FS” and ex-C1-M-AV1” ships in the southern Mindanao routes. In 1955, when Everett Steamship’s duo of brand-new luxury liners which were sister ships arrived, the Legazpi and the Elcano, PSNC withdrew the former “C1-M-AV1” ships in the Davao route (Everett SS was then operating through PSNC in partnership with Aboitiz Shipping Corporation).

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A former ex-“C1-M-AV1” ship (Photo credits: Phil. Herald and Gorio Belen)

Compania Maritima was dominant in the southern Mindanao routes because their ships were simply bigger, better and faster. Their only worthy competition were the Legazpi and Elcano but still their ships which were former European passenger-cargo ships were bigger than those and has more cargo capacity, an important feature then since more cargo meant more revenue.

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(Photo credits: Phil. Herald and Gorio Belen)

In those routes to the south, Compania Maritima followed what was in vogue or normal then, that is the ships pass so many intermediate ports (as in up to six) and Cebu or Iloilo will be one of them. The ships will then dock in other Visayan ports like Tagbilaran, Dumaguete or Pulupandan or northern Mindanao ports like Cagayan de Oro, Iligan or Ozamis, among others. In the early ’70’s, Sweet Lines pioneered the route through the eastern seaboard of Mindanao. But just the same their ships docked first in Visayas ports.

That was the reason why ships then took nearly two weeks to complete a voyage and two ships had to alternate in serving a route to southern Mindanao so a weekly schedule can be maintained. Most had Davao as end port and some had Gensan as end port. Those still going to Davao usually docked also in Gensan (it was called Dadiangas then). A few ships had Cotabato as the end port (it was actually the Polloc port in Parang, Cotabato).

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MV Dona Ana (Wikimedia Commons)

However, in 1976, the new paradigm, that of fast cruiser liners came also to Mindanao. Bringers of it were Sulpicio Lines with the Dona Ana and William Lines with the Manila City. These fast ships only took three days to Davao compared to the six days of the liners before. These new ships only had one intermediate stop, Cebu for Sulpicio Lines and Zamboanga for William Lines. Fast cruisers of that era meant a ship can do 18 knots sustained. These fast cruisers had prompt departures and usually they will arrive at the posted ETA.

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Photo credits: Times Journal and Gorio Belen

Aside from the Dona Ana, Sulpicio Lines also introduced small passenger-cargo ships with direct Davao sailings and these ships only took five days for the voyage. In 1978, Sulpicio Lines introduced the fast cruiser liners Don Enrique and Don Eusebio to Southern Mindanao routes. Even with these fieldings, Sulpicio Lines and William Lines maintained their old ships with multiple intermediate ports which took six days and with two ships alternating. But passengers who can’t afford or who don’t want to take the plane suddenly has a faster and more luxurious passage. These moves of Sulpicio Lines and William Lines put a lot of pressure on the other operators.

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Photo credit: Gorio Belen

These new liners of Sulpicio Lines and William Lines, being fast and taking fewer days forced changes in the sailings of the other companies. Sweet Lines then assigned three ships rotating to the Davao route and by using the shorter eastern seaboard route and with just one intermediate port was capable of reaching Davao in 4 days. Sweet Lines cannot match Sulpicio Lines and William Lines because they have no fast cruiser liners (they will try to match in 1983 when they acquired the fast RORO liner Sweet RORO 2).

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Photo credit: Times Journal and Gorio Belen

The combined Carlos A. Gothong Lines Inc. (CAGLI) and Lorenzo Shipping Company tried a new tack. They simply dropped passenger service to Davao and offered direct cargo sailings (hence, their ships can almost match the sailing times of the Sulpicio and William fast cruisers). Aboitiz Shipping Corporation meanwhile had already dropped Davao and Gensan even before and their ships were sailing up to Pagadian only (which they will also relinquish and abandon southern Mindanao). The other liner companies were not involved in this battle like Escano Lines, Negros Navigation and the minor liner companies because they had no southern Mindanao nor western Mindanao routes even before.

Compania Maritima which like the others used doubling of ships to Davao or Gensan also used the approach of Sweet Lines, that is to triple the ships in a Davao route so their sailings time will be reduced to four days. Their ships are faster than Sweet Lines’ but although they pruned the number of intermediate port they really can’t bring it down to just one port (so they are not faster to Davao than Sweet Lines). By this time Compania Maritima was already using their best and fastest ships to the Davao route and their next echelon of ships were also doing the other southern Mindanao routes. With this tactic Compania Maritima had a very thin coverage of their old northern Mindanao and Eastern Visayas routes.

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The Compania Maritima flagship (Photo credits: Evening News and Gorio Belen)

If Compania Maritima thought they can hold fort with this tactic they were sadly mistaken. In 1978, Aboitiz Shipping Corporation boldly came back to the southern Mindanao routes with its container ships, a new paradigm in Philippine shipping and they were offering direct sailings which means no intermediate ports. With that they can offer a faster (than Compania Maritima and Sweet Lines) and more secure shipping of goods with less damage. William Lines and Sulpicio Lines, not to be outdone, matched this new offering of Aboitiz Shipping Corporation the next year and this was followed soon by Lorenzo Shipping Corporation. Not to be left out was the new Sea Transport Company, a pure cargo company which offered direct container services to southern Mindanao even ahead of the national liner majors.

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Photo credits: Times Journal and Gorio Belen

As mentioned before, Sweet Lines also followed suit with a fast service to Davao with the Sweet RORO 2 in 1983. If Compania Maritima was also strong in Cebu cargo before, by this period the national liner majors also had direct and dedicated container ship sailings to Cebu. Cargo is actually the bread and butter of shipping and since Compania Maritima never invested in container ships in due time they were already badly outgunned. Their competition already had fast cruiser liners and it had containers ships too, both new paradigms that Compania Maritima never possessed and they were still stuck to the old cruisers and old way of sailing.

I don’t know if Compania Maritima ever thought of getting aboard the new paradigms. Whatever, events soon decided things for them. President Marcos’ grip on power was loosening, his health was deteriorating and soon Ninoy Aquino was gunned down in the airport in his return in 1983. Political crisis and financial crisis were soon raging in the land, the peso was sinking very fast and production and trade suffered. Even prime companies were tottering on the edge then because of crushing debt loads when lending from the banks was nearly impossible. In this period, even the local operations of the major car assemblers collapsed – Toyota, Ford, General Motors. Other big companies were closing shop too.

The next year Compania Maritima’s answer to the crisis became known to all. They simply ceased operations too like the motoring majors and soon their dual-citizen owners were on their way back to Spain. Compania Maritima’s ships were laid up but soon they were sold to the breakers one by one. By 1988, none of Compania Maritima’s ships were still existing.

And that was how the old and long No.1 in Philippine shipping ended its life.

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Compania Maritima building in Cebu