2GO Travel Has Stopped Its Manila-Davao Route

A few weeks ago, the liner St. Leo the Great of 2GO Travel plied its last voyage to Davao amid some send-off ceremony. That liner started again the Manila-Zamboanga-General Santos City-Davao route after a request from the Philippine President who changed his mind after saying right after he was elected that Davao does not need a liner. Now, Davao City is his own city and it recently produced a shipping great in Dennis Uy who was one of President Duterte’s supporters in his presidential campaign and they are close.

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St. Leo The Great by Mike Baylon and PSSS

A liner to Davao has been a debated thing in the last few years and the quirk is after our liner companies were decimated through various reasons, only one was left to serve the route if they wish and that is the company 2GO which changed ownership from Negros Navigation to the Chelsea Logistics of Dennis Uy. When the Aboitizes were still the owners of the predecessor company of 2GO, the Aboitiz Transport System, it seems they were discouraged by the Davao route. It was true that there were only a few passengers left and they are being beaten in cargo, they being who charge the highest and there was a secret reason for that.

I have long argued that liners should be downsized now because passenger loads of 2,000 people were already a thing of the past when the budget airlines came and it made the plane fare low as in to the level of liner fares. A voyage of over two days suddenly became passe and undesirable even though the meals are free. The availability of intermodal buses added to the pressure against the liners. That mode is not comfortable but they depart daily whereas the liner became a weekly thing when at its peak the liners have six sailing to Davao in a week.

The over-all situation is actually not favorable now to the liners even in other parts of Mindanao and even in the Visayas as there are alternatives already. So that impacts the capacity of the liner companies to invest in new liners. As of now, it is already obvious that liners are oversized even in the cargo capacity. I think it should go back to 110- or 120-meter length of the 1980s. The 155-meter liners of today are just relics of the 1990s when passenger shipping was still good. Engine capacity should also be downsized from the 25,000 horsepower currently to half of that like that of some 25 or 30 years ago. Speeds might go down from 19 knots currently to the 16-17 knots of before but that might not be a very big thing. What is important to consider is fuel is no longer as cheap compared to a generation ago because of US wars.

And this actually where 2GO might be headed. I heard a ferry in the 110-meter range is coming but it seems it is headed to a sister company, the Trans-Asia Shipping Lines Inc. (TASLI). I will not be surprised if Trans-Asia Shipping goes into liners like they are already in cargo liners with their container ship fleet still growing. TASLI also might turn out to be cheaper to operate than 2GO. I heard the new ferry is destined for Davao so Dennis Uy can still fulfill his promise to President Duterte.

A 115-meter ferry with a passenger capacity of 1,000 to 1,200 passengers and a container capacity of about 60 to 70 TEUs is what might be needed by liner shipping today. The 2,000-passenger capacity is already archaic and so do the 100-TEU container capacity as liners can no longer fill that up now. Why field a full-size bus or truck when a midibus or a minitruck will do? However, I wish that that ship will have a mezzanine so cars can also be loaded without taking much space. The space or deck below that will still be usable.

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Princess of Negros by Chief Ray Smith of PSSS.  A 110-meter ROPAX of the past.

But if we really want to revive our liner industry then MARINA should change its rules. Exhortations from MARINA or the Department of Transportation will not do the trick and they should realize that.

In the 1980s, when the ROROs came (or ROPAXes to be more exact) the liners were allowed to charge more for the same cargo so that the passenger fares can be subsidized. It was simpler then because the liner companies were also the dominant players in the containerized cargo business and so the playing field was more or less equal. There were just a few container shipping companies which were not in the passenger liner business.

The liners can charge extra because it was treated as express cargo. They actually arrive in the destinations earlier than the container ships which just sail at half their speed and are not constrained to wait for cargo so that the ship will have more load.

But the problem is things changed as time went by. Lorenzo Shipping, Escano Lines, William Lines, Gothong Lines and finally Sulpicio Lines got out of the passenger liner business for one reason or another and a slew of new container lines emerged (it was no longer Solid Shipping Lines alone although there were other small container lines before them). The container ships can already undercut the express rates very significantly. Now most cargoes can actually wait and if one needed it really fast then one goes to the forwarding companies using airlines and their own panel trucks. This segment of the cargo business actually boomed in the last three decades. Aren’t they present in all malls now?

In truth, the container shipping companies do not want to do any passenger business anymore and the reasons are various. One, without passengers they can delay the departures of their ships and there are no passengers which will complain. Second, container vans do not need accommodations, nor food and nor passenger service. The crewing needs for passengers is actually great and restaurants and pantries will be needed plus a food supply system. A container van can be handled roughly and nobody will complain. The carrying of passengers actually has potential problems public relations especially in this time of social media. If the Princess of the Stars was a simple container ship then the furor and backlash would not have been that great. Life is much simpler for container lines and even their office staff is leaner.

How do we revive liner shipping? It’s simple. Oblige the container lines to operate liners. The size and number should be proportional to their container ship fleet. That will level the playing field and 2GO, our sole and remaining liner company will breathe easier. At the rate it is going, getting cargo was already difficult for 2GO. Even here in Davao, there are a lot of new container lines and some are even using LCTs and deck loading ships which are even less expensive to operate thus they are capable of charging less.

Now, I wonder if the current crop of MARINA officers knows the history of the rates they approved or its rationale. I am not even sure if they really care for liner shipping because after all they do not ride ships (they take the plane, of course). Maybe they do not even realize that the more container ships they approve the more liner shipping goes down. Cargo is the lifeblood of shipping and the passenger liners are no longer competitive in that.

I hope the liners rise again. And I wish they will come back to Davao and be profitable at the same time.

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Starlite Ferries Has A New Fastcraft

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Photo credit from our Chinese Broker Friend: Fred Li

In the past, when Starlite Ferries was still owned by Sec. Alfonso Cusi, it also operated fastcrafts the first being the Super Seabus which was a cast-off when the Viva Shipping Lines (VSL) of Don Domingo Reyes (DDR) collapsed early this millennium. Actually, she was not owned by Viva Shipping but by its legal-fiction company which was DR Shipping.

Super Seabus has a checkered history. She was first owned in the country as the Island Cruiser II of Sun Cruises that made Manila Bay cruises up to Corregidor Island. But when Bullet Express and SuperCat made its appearance in the Batangas to Calapan route, Viva Shipping had to respond and they forced the acquisition of two fastcats from Sun Cruises in 1994.

Super Seabus  as Island Cruiser II did not serve very well with DR Shipping as she was already old and her motors were always  forced to the maximum as her competitors were really way faster than her. The difference in horsepower was the biggest reason for that.

More than a decade later, Starlite Ferries acquired the Starlite Juno which they used in the Batangas to Puerto Galera route when that route had a revival of sorts a few years ago after nearly dying at the hands of the Sabang motor bancas that went direct to the resort area of Puerto Galera. The motor bancas got tourists to their destination faster and cheaper and that can’t be beaten unless they go down.

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Now, at the hands of new owner Dennis Uy of Chelsea Logistics, Starlite Ferries has just acquired a new fastcraft from China, the Starlite Sprint  1 (is that the beginning of a ship series?). The fastcraft is equipped with Yanmar engines and is supposedly capable of 24 knots (that is the usual speed now of the SuperCats). Even at one passenger deck only, she can take in 250 passengers.

I heard it will be initially used in the Iloilo-Guimaras route which experienced a knee-jerk response after three motor bancas went down in a single day a few weeks ago and MARINA, the country’s maritime agency and the Department of Transportation diverted many ferries to the route after they suspended the voyages of the Iloilo-Guimaras motor bancas.

I just wonder how long will the Starlite fastcraft will stay in the route as the transferred ferries have to charge double or more than double than the motor bancas and with that it is not even assured that they will break even. Really, it is hard to replace the cheap and cheap-to-acquire-and-operate motor bancas although there is no question that they are less safe than the other types of ferries.

As for the final route of the new Starlite fastcraft, I am not sure where it will be. However, a new ferry is always good news to our maritime industry.

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N.B. Photos courtesy of the broker – Fred Li

The Asia Philippines

Just recently, I was on a tour and I took the Trans-Asia Shipping Lines ferry Asia Philippines on the way home by plan. I strove to sail with her since I want to compare her with her sister ship, the Danica Joy 2 of Aleson Shipping Lines of Zamboanga which is probably sadly gone now since she was no longer salvaged after she capsized in Zamboanga port due to a mistake in the unloading of the ship almost exactly a year ago on September 2016 (she is now gone from Zamboanga port having lain there on her side for some time).

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In the comparison I found that the Danica Joy 2 had the superior accommodations and better amenities between the two. Asia Philippines is no better than the sold-now former Asia Indonesia which formerly plied the Cebu-Masbate route for Trans-Asia Shipping Lines. The two are basic overnight ferries for maybe just the purpose of having sleeping accommodations while sailing and their early 1990’s refittings are clearly evident. There is an air-conditioned Tourist section alright plus a Cabin by the bridge deck in the officers’ cabin row and the usual Economy and a basic kiosk and a restaurant that offers hot food at a high price but nothing much else and there is not even a proper lounge for passengers. 

I found out that the appointments of the Danica Joy 2 are a little better. There are Cabins and the Tourist is larger and with more room to walk around plus there is a lounge and I got the feeling that with a limited space Danica Joy 2 tries to make the passengers more comfortable as its route to Sandakan is longer that it can also qualify as a liner route as it is more than an overnight route. The canteen is also better and hot food can be ordered also plus there is a separate restaurant for the crew in the aft of the navigation deck. What is more it is female attendants that attend to the canteen.

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The two ships have the same origins as both are former vessels of the Shikoku Ferry in Japan which links Shikoku island with Japan’s largest island of Honshu. The Asia Philippines was the Orange Star in Japan while the Danica Joy 2 was the Orange Hope.

The Orange Star was built by Nakamura Zosen in their Matsue yard in Japan in 1975. Her keel was laid in November 1974 (thus her IMO Number is 7434262) and she was completed in April 1975. She is a RORO ship with bow and stern ramps and a single car deck between the ramps. The Length Over-all (LOA) of the ship is 67.2 meters and the Length Between Perpendiculars (LBP or LPP) is 60.3 meters with a Beam or Breadth of 14.2 meters which means she is wider than most ferries of that length. Originally, the ship’s Gross Register Tonnage (GRT) was 997 tons with a Deadweight Tonnage (DWT) of 413 tons.

Of course, the hull material of the ship is steel alloy and she has 2 masts and two funnels at the top signifying she has two engines which are two sturdy Daihatsu marine engines of 2,000 horsepower each for a total of 4,000 horsepower which is better than most of the ships this size at the approximate period the ship was built. As such the design speed was 15.5 knots which was better than most for ferries of this size built in the mid-1970’s. Incidentally, she was the last ship built by Nakamura Zosen in the Matsue yard (the Danica Joy 2 was built by Nakamura Zosen in their Yanai yard in 1982).

The Asia Philippines came to the country in 1994 when Trans-Asia Shipping Lines Inc. (TASLI) was acquiring a lot of RORO vessels and expanding and has already disposed of their old cruiser vessels (the company was among the regionals which was early in shifting to ROROs from cruisers). The Orange Star was the replacement of an earlier cruiser Asia Philippines of the company which was sold to Cokaliong Shipping Lines Inc. (CSLI) which became their Tandag, the first steel ferry of the company (now who can believe that just over 20 years ago such is the disparity of the two companies that Cokaliong was just buying cast-offs of Trans-Asia then when now they are already the leading company?).

The first route of the new Asia Philippines was the Cebu-Cagayan de Oro route in tandem with the beautiful and bigger Trans-Asia (1), the best overnight ship then from Cebu to Northern Mindanao. That pairing assignment lasted until 1975 only when the sister ship of Trans-Asia (1), the Asia China arrived and Asia Philippines was then reassigned to the Cebu-Iloilo route of the company. Now, until just recently the Asia Philippines was still doing that route at times, the concrete indication of the lack of progress of Trans-Asia Shipping Lines over the decades when nearly ten years ago the Asia Philippines already had to battle the much-superior Filipinas Cebu of Cokaliong Shipping Lines in the important Cebu-Iloilo route.

When I rode her, the Asia Philippines is the regular of Trans-Asia Shipping Lines in the Cagayan de Oro-Tagbilaran route, a minor route which she plies with three round trips a week every night with a diversion to Cebu from Tagbilaran once a week. As of now the Asia Philippines is already the lowermost in the totem pole of the Trans-Asia ships because the equally old Trans-Asia 2 is bigger and considered superior to her and holds the more important Cebu-Ozamis route. In size, the Asia Philippines is roughly approximate to the Trans-Asia 8 of the company but the is a newer ship than her with better appointments and speed.

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Asia Philippines Tourist section

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Asia Philippines Economy section

The Asia Philippines has only two passenger decks with a small Tourist section in the lower passenger deck ahead of the restaurant which is located at the middle of that deck and behind that is Economy section. The upper deck is an all-Economy accommodation. As mentioned earlier the ship has no lounge and no Cabin either (did I simply not saw it?) and there is just a small front desk at the front of the restaurant on the opposite side of the kiosk. The basic restaurant is air-conditioned and it is beside the mess for the crew and that area is also where they cook the food called the galley in a ship. With a tight space the crew eat standing up or otherwise they bring their meals on styropor boxes elsewhere and usually in the passageway either standing or crouching.

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Asia Philippines restaurant

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Asia Philippines crew lunch

Like in other overnight ferries linen is complimentary in the Tourist section and there is none for the Economy class. At first the aircon in the Tourist that not seem strong enough but as the night deepens one will also need the blanket provided free of charge. One very noticeable weak point of the ship is the toilet and bath. It is simply to small for the passenger capacity and at times one has to queue especially in the morning. And there is practically no provision for showering. Near the front desk and the canteen are two sofas which serves as the “lounge” of the ship.

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Asia Philippines canteen. The ship galley is behind that.

The ship is equipped with a side ramp and a gangway on the side. I found out this is what they use in Tagbilaran port when they do side docking. At the stern of the ship is the usual two gangways for the passengers, a facility so that the cargo operations of the ships is unimpeded and this is a necessity since at times the ramp of the ship is over a meter below the wharf apron in low tide.

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Asia Philippines stern

The car ramp of the ship is the usual clipped or shortened type commonly found in Cebu overnight ferries that are better for the Cebu-type of forklift operation. This is so because almost all of the cargo of the ship is loose cargo or palletized and forklifts are used to move those. In Cebu overnight ferries one forklift at the wharf and another forklift at the car deck pass to each other the cargo and the lip of the ramp is just danger to the forklift above especially when wet or muddy. And besides the ship don’t ballast anyway like most Cebu overnight ships and when the tide is low there is no way to deploy the ramp to the wharf and so the ramp just resides at the side of the wharf and the lip will then just be an obstruction and so they just remove it.

The problem with clipped ramp happens when a car has to be loaded. It is not too difficult when the ramp can be deployed atop the wharf when the tide is high. The problem arises when the ramp can’t be deployed atop the wharf. That is what happened to us in Cebu. Light vehicles won’t depress much the ramp when the weight of the car is transferred to the ramp but loaded trucks are another matter. Of course the company has already mastered the art of making this difficult loading possible.

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The Asia Philippines is getting old and obsolescent already for Trans-Asia Shipping Lines. I don’t know if the company is already thinking of disposing her now that TASLI has already a more moneyed owner, the Udenna group of Dennis Uy that also controls now 2GO, the only liner company left in the country. Maybe Udenna will find out now that the amenities of Asia Philippines is already deficient by the standards of today and certainly far from their former Cebu Ferries ships. But then the company will always find out that this lesser ferry still fits their Cagayan de Oro-Tagbilaran route and will even fit their Cebu-Masbate route, a route where the passenger service of Trans-Asia Shipping Lines stopped (but not the cargo service) because they lacked ferries for some time now especially when the beautiful sister ships Trans-Asia (1) and Asia China were sold without replacements. However, if she is retained for a while for service in the minor routes I think it will be be better if her accommodations are improved and 2GO is an old  master of such improvements.

But should the coming five more ships of Starlite Ferries (a shipping company now also owned by the Udenna group) is diverted to Trans-Asia Shipping Lines then the Asia Philippines will be disposable and not necessarily to the breakers. She is still too good for the broken up and she can be sold to carriers in the eastern seaboard (or maybe to another overnight ferry company in Cebu). My only comment is her engines is a little big for the routes there where speed is not really that much needed there (and even with 4,000 horsepower Asia Philippines can’t seem to get much speed nowadays anyway). I remember that was also the problem of the Trans-Asia Shipping Lines’ Asia Japan with has the same 4,000 horsepower from two Daihatsu engines and of about the same size. Well, with the shorter Cagayan de Oro-Tagbilaran route that lack of speed will not be a problem. But in the Cebu-Masbate route it will be, a little.

With the entry of the Udenna group, I really can’t guess the future of Asia Philippines but it might not be the same as the other old ships of the company which is continually run because there are no new ships anyway. And the entry of big Udenna group is good because Trans-Asia Shipping Lines will be injected with new life again, for sure.

Wither Asia Philippines? We will see that in the coming days.

Chelsea Shipping Is The New Goliath of Philippine Shipping

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The Chelsea Dominance. The declaration of intent?

When the “new shipping world” was being built there was Phoenix Petroleum first which was not into shipping anyway. Many thought Phoenix Petroleum would end up like the “independent” oil players then which had a few gasoline stations here and there but were never a threat to the major oil players which have foreign genes. But with the smiling face of the world-famous Manny Pacquiao as mascot, Phoenix Petroleum grew until it challenged the Big 3 which were Petron, Shell and Chevron (which was the former Caltex and Mobil). That was blasphemy for the oldtimers which saw Filoil never got anywhere before.

Phoenix Petroleum got far because they changed the rule of the game. Where before local oil companies had to invest in local refineries to be granted permission to operate, Phoenix Petroleum simply had to import fuel from Singapore and it so happened in Southeast Asia oil prices are only high in the Philippines because a lot of taxes are tacked on to the price of fuel as oil is the milking cow for taxes of the government which rules a vast horde of people exempted from paying taxes because they are too poor.

Along the way to being the fourth Oil Major, Phoenix Petroleum established Chelsea Shipping to handle their fuel transport needs and the company operated a fleet of tankers. But Chelsea Shipping never operated the biggest tanker fleet in the country and their fleet never exceeded ten tankers.

But this year, 2017, Chelsea Shipping made a lot of sea-shaking moves in shipping. Early this year rumor leaked out already that they have already acquired majority control of Trans-Asia Shipping Lines Inc. (TASLI), a Cebu-based regional shipping company with Visayas-Mindanao routes. A bare few months later a boardroom fight erupted in 2GO, the only national liner shipping company left when Dennis Uy, the principal of both Phoenix Petroleum and Chelsea Shipping tried to claim what they felt was their rightful representation after buying shares and the old management group represented by Sulficio Tagud, the old top honcho resisted. But in the end Tagud and company waved the white flag after 2GO gained market value because of the fight and Dennis Uy took control of 2GO.

Weeks passed and the local shipping world was rocked again by a new development when it was announced that Chelsea Shipping is acquiring Starlite Ferries Inc., a Batangas-based regional shipping company lock, stock and barrel. Starlite Ferries has routes to and from Mindoro and its fleet is being reinforced by newbuilds from Japan acquired from a loan from a government-owned bank. It seems the coffers of Phoenix Petroleum and Chelsea Shipping are overflowing to the brim. Is there another acquisition in the making?

Chelsea Shipping now has foothold to the top three passenger shipping hubs in the country which are Cebu, Manila and Batangas. In tankers they are also strong in another hub which is Davao which has the cheapest fuel in the whole country courtesy of Phoenix Petroleum and which piqued Ramon Ang enough that he chopped the fuel prices of Petron. And so Davao fares remained among the highest in the country. Does it make sense? Nope. Maybe it is the moves of Chelsea and Dennis Uy which only makes sense.

I do not know if a second “Great Merger” will happen in Philippine shipping after the first “Great Merger” of 1996 which created William, Gothong and Aboitiz or WG&A, the predecessor company of 2GO. That first one ended in disaster and it only resulted in the death of two great historical shipping companies.

Will history repeat itself? I have my doubts. This time around there is only one top honcho which is Dennis Uy unlike before there was a big merged company with three heads pursuing some kind of a mirage. Actually it could be great for Philippine shipping as Dennis Uy and his patron are both loaded and might have the money to make moves in shipping without going to the banks. Who knows if the moribund shipping industry is revived with their coming?

Now if only Manny V. Pangilinan (MVP) bought out Negros Navigation Company (NENACO) outright some 15 years ago instead of being just a “white knight”. NENACO is one of the merged companies in 2GO. We really need investors with deep pockets in shipping. That is what might turn things around and not due to some government blah-blah.

Is there a renaissance of Philippine shipping in the horizon?