How The GIGO Principle Applied to Myrna S. Austria’s Paper In The Port of Batangas

We all know what GIGO or “Garbage In, Garbage Out” means. The paper of Myrna S. Austria on domestic shipping competition is one such example and I will show the GIGO of her paper in the port of Batangas. [I will also show how it applied later in her analyses on the routes from Cebu and other routes; to tackle all in one article will simply be too long.] Her paper:

http://dirp3.pids.gov.ph/ris/rps/pidsrp0302.pdf

In that paper the figures that were used were for 1998 and 1999 but the paper could have been published in 2003. So for consistency I will use data especially vessel data for 1998, primarily and for 1999, secondarily.

Batangas port in 1998-1999 was one of our busiest port in terms of passenger traffic. In those years Batangas port was behind Cebu port and Manila port (in total passengers but not in vessel departures) but it is well ahead of the other Philippine ports.

The number one route from Batangas is the Calapan route and that route will account for about 80% of the passenger departures from Batangas. Other routes then from Batangas were to the following ports : Abra de Ilog, Sablayan and San Jose (all in Occidental Mindoro); Puerto Galera (in Oriental Mindoro); Coron and Puerto Princesa (both in Palawan); Odiongan, Romblon, Banton and Simara (all in Romblon province) and Masbate.

Actually there might have been a few other routes from Batangas that I might have missed because the creation and deletion of routes was very fast in those days as competition in Batangas was really heated up. This was the era of the entry of many shipping companies which was the result of the deregulation policy and shipping incentives laid down by the Fidel V. Ramos administration. In fact, because of the dog-eat-dog competition in Batangas and the simple excess of bottoms, in a few years after 1998 a lot of shipping companies plying routes from Batangas routes will have collapsed including the biggest, the Viva Shipping Lines/Sto. Domingo Shipping/DR Shipping combine of the controversial Don Domingo Reyes.

If the paper of Myrna S. Austria is to be believed there were only three routes from Batangas served by sea vessels bigger than motor bancas in 1998 — the Batangas-Calapan route (and that is served only by SuperCat according to her paper), the Batangas-Puerto Galera route (according to her that is served only by Si-Kat, the small Cavite-built fiberglass-hulled catamaran) and the Batangas-Romblon route (which according to her is only served by Shipshape Ferry Inc.). Of course that is very, very far from the truth and actual situation and if you tell that to porters in Batangas port they will probably whistle in disbelief.

Now if her paper is correct (and it is definitely erroneous) then Batangas will only be a minor port as least as far as passenger shipping is concerned (it is another matter in cargo because Batangas hosts refineries and lot of tankers dock there).

If the paper of Myrna S. Austria is to be believed then there is only one RORO ship docking in Batangas in 1998 was the Princess Camille. And there were only three passenger shipping companies – SuperCat (or Philippine Fast Ferry Corp.), Si-Kat (which was misspelled to Sicat Ferries) and Shipshape Ferry (which owns the Princess Camille). And she says Si-Kat goes to Puerto Princesa, Palawan and not Puerto Galera, Oriental Mindoro which is wrong again. I just wonder how a small catamaran can reach Puerto Princesa from Batangas. Maybe tankers met her along the way?

So in Myrna S. Austria’s paper, Viva Shipping Lines and her legal-fiction companies Sto. Domingo Shipping and DR Shipping simply did not exist when actually it was the biggest in Southern Tagalog during that time with 33 passenger vessels from ROROs to fastcrafts and wooden motor boats (the batels). Most of its ships were based in Batangas with a few in Lucena.

In Myrna S. Austria’s paper, the Montenegro Shipping Lines Inc. (MSLI) also did not exist in 1998 together with its six ROROs and three motor boats. Starlite Ferries and its one RORO also did not exist like MSLI (Starlite added ships in 1999 like MSLI). In the paper, two Atienza clan ROROs also did not exist. That goes true for the motor boats and big motor bancas that go to Banton and Simara (when the paper of Myrna S. Austria lists motor boats and motor bancas in other places including those that just cross the narrow Davao
River).

Why was this so? That happened because the shipping companies mentioned did not bother to report to the Philippine Ports Authority (PPA) and it seems she did not consult the MARINA Database and so she did not see the list of ferries in the Philippines and its routes). I just wonder about ivory tower researchers. All they know is go to government offices when government data has a lot of leaks. They won’t bother going to the ports and see with their own eyes and hear with their own ears.

In her paper I noticed a lot of ports missing and a lot of shipping companies not listed both in passenger and cargo shipping, nationally. Once, I read that the PPA themselves admitted that only about 55% of the companies report to them. I even wonder if that is not a rose-tinted estimate especially in cargo. One of the major reason for this is they are not the maritime regulatory agency (that is the MARINA or Maritime Industry Authority) and maybe the shipping companies felt that reporting to them is not mandatory. Another major reason is there are more private ports than PPA ports and a lot of ports that are under the local government units (LGUs). There are even ports that are not registered or authorized to operate (it is the PPA themselves that pointed that out).

The PPA will also not know the passenger and cargo ships existing since they don’t maintain a shipping database. There are even unregistered ships and there are motor bancas and fishing bancas taking passengers and cargo although they are not authorized by the maritime regulatory agency. So why would they report to the PPA? The so-many Moro boats of Zamboanga, Sulu and Tawi-tawi are in the main unregistered and they number over 200.

In Myrna S. Austria’s paper, the average age of passenger ferries in 1999 was 9.98 years and these were mainly the High Speed Crafts and Medium Speed Crafts. The average age for passenger-cargo ships in 1999 was just 9.27 years (gasp!). Who can believe that!? That only happened because she missed a lot of shipping companies in her research. The true average age of our passenger-cargo ships then was over 20 years. Otherwise Senator Richard Gordon and former MARIA Administrator Maria Elena Bautista won’t be railing against the age of our ships. And I have the database to prove that our ships are really much older than Myrna S. Austria’s data.

The centerpiece of the study of Myrna S. Austria is the use of the Herfindahl-Hirschman Index or HHI to measure shipping competition.

https://en.wikipedia.org/wiki/Herfindahl_index

But what is the use of that measurement when a lot of companies do not bother to report? Almost all the computations will then be go awry and concentration will seem to be very high. There is no sense to that that index if the data is highly incomplete which was really the case.

In Myrna S. Austria’s paper, there were a lot of routes reported to be with “no competition” or only with “mild competition”. Because most shipping companies were not in the data. [I a future article I will list all the shipping companies and ships she was able to list and I will list all the shipping companies and ships she missed.]

In Batangas when Myrna S. Austria’s paper was published in 2003 a host of shipping companies there were already toppling including the biggest (the Viva-Sto. Domingo-DR combine). Others that toppled were Aquajet Maritime, Sto. Nino Maritime Services and Atienza Shipping (not the current one of Silverio Atienza). Some others left Batangas for thereafter for greener pastures(like the Atienza Shipping Lines of Silverio Atienza and ACG Express Liner) and some sold out (like the Shipshape and Safeship combine and Alexis Shipping). Except for one, all of these were not on the list of Myrna S. Austria.

The competition then in Batangas was “dog-eat-dog” or in Tagalog, “matira ang matibay”. There was rampant undercutting and underpricing and route schedules are not followed. I personally saw how that went on in Batangas when the rolling cargo rate for AUVs went down from P300 to P75 in 1995. When Viva Shipping Line implemented that nobody can follow suit to P75 because all will simply lose. P75 was just ¾ of the aircon bus fare then from Cubao to Batangas port! That was just like charging P120 in today’s (2016) money, less than a tenth of what they charge now. That was how fierce was competition in Batangas then.

Myrna S. Austria never knew that because maybe she never went to Batangas port (I believe in that otherwise she would have known the other shipping companies existing there) and for sure she is not a Batangas shipping passenger. Because of her was paper laden with great incompleteness in data, the conclusions can only be wrong — at least as far as Batangas, the coverage of this article.

Addendum

The Shipping Companies in Batangas in 1998 and Its Passenger Ships Existing By That Year That Myrna S. Austria Missed In Her Paper:

Viva Shipping Lines:

Marian Queen (IMO 7534402)

Viva Sta. Maria (IMO 6814611)

St. Kristopher (IMO 7036292)

Viva Sto. Nino (IMO 6811528)

Viva Penafrancia (IMO 7331410)

Viva Penafrancia 2 (IMO 7908639)

Viva Penafrancia 3 (IMO 7126009)

Viva Penafrancia 4 (IMO 7104025)

Viva Penafrancia 5 (IMO 6908254)

Viva Penafrancia 8 (IMO 6829197)

Viva Penafrancia 9 (IMO 8426250)

Immaculate Conception (IMO 7607974)

Viva San Jose (IMO 7225398)

San Agustin Reyes (IMO 7020774)

Viva Sta. Ana (wooden motor boat; no IMO Number)

Viva Sta. Ana 2 (woodenmotor boat; no IMO Number)

Viva Maria Socorro (wooden motor boat; no IMO Number)

Our Lady of Lourdes (wooden motor boat; no IMO Number)

Socorro II (wooden motor boat; no IMO Number)

Our Lady of the Holy Rosary (fastcraft; IMO 7914731)

Viva Lady of Lourdes (fastcraft; IMO 8895149)

Sto. Domingo Shipping Lines:

Sto. Domingo (IMO 7314266)

San Lorenzo Ruiz (IMO 7119862)

San Fernando (IMO 7852634)

Sta. Penafrancia 6 (IMO 8426224)

Sta. Penafrancia 7 (IMO 7740099)

St. Lawrence (IMO 7405273)

Our Lady of Guadalupe-Reyes (fastcraft; no IMO Number)

Our Lady of Fatima 7828947 (fastcraft; IMO 7828947)

DR Shipping:

Penafrancia 10 (local-built fastcraft; no IMO Number)

Penafrancia 11 (local-built fastcraft; no IMO Number)

Penafrancia 12 (local-built fastcraft; no IMO Number)

Our Lady of Mt. Carmel (fastcraft; IMO 7828047)

Montenegro Shipping Lines Inc.:

Maria Angela (IMO 7852919)

Maria Gloria (IMO 6726668)

Maria Isabel (IMO 6720509)

Marie Kristina (IMO 6817962)

Maria Sophia (IMO 8948519)

Marie Teresa (IMO 8021969)

Don Vicente (wooden motor boat; no IMO Number)

Don Francisco (wooden motor boat; no IMO Number)

Dona Matilde (wooden motor boat; no IMO Number)

Starlite Ferries Inc.:

Starlite Ferry 5 (IMO 6829484)

Alexis Shipping:

Ruby 2

Sto. Nino Maritime Services:

STO. 1 Ferry (IMO 9171709)

Source: Philippine Ship Spotters Society (PSSS) Database

Anybody can go to MarineTraffic or Vessel Finder and verify such ships with IMO Numbers existed.

Myrna S. Austria missed a lot, didn’t she?

 

Photo  Credit: Edison Sy

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The Sweet Lines Ships That Went to Viva Shipping Lines

Sweet Lines was a Central Visayas shipping company of Bohol origin so Bol-anons were rightly proud of her. It also had a cargo liner company (which means fixed routes and schedules) named Central Shipping Company aside from cargo ships too in the Sweet Lines fleet. Sweet Lines started from Visayas-Mindanao routes till they graduated to liner shipping. They were able to do that by acquiring half of the fleet and franchises of the General Shipping Company which moved out of passenger liner shipping in the middle of the 1960’s. From such move, Sweet Lines was able to get routes and ships to Manila.

For a generation Sweet Lines did well in liner shipping. They had all the trappings and signs then of a successful liner company including Japanese agents and big liners. One thing that distinguishes them from competition was that they have a strong Visayas-Mindanao shipping then, as a result of their origins (long before Lite Ferries they dominated Bohol routes). In this regard, they were comparable to Carlos A. Gothong Lines Inc. (CAGLI) after the complete split of the original Go Thong shipping company when Lorenzo Shipping Company parted ways with them. However, Sweet Lines was stronger than them and they had true national presence while CAGLI didn’t have that after 1978 since it was Lorenzo Shipping Company which held the Southern Mindanao routes after their final split. Besides, Sweet Lines had its own cargo shipping company which even dabbled in Asian routes for a while. In passenger shipping, they were even ahead of Aboitiz Shipping Company but the latter had a strong cargo and containerized operation which was ahead of Sweet Lines and Central Shipping.

It seems Sweet Lines did not survive well the crisis decade of the 1980’s. I am one of those which did not foresee their fall. There were some distant nasty rumors then but I found it hard to believe as there are always unfounded rumors in shipping. But then they did not acquire great liners at the start of the 1990’s when even Aboitiz Shipping Company (which had a reputation before of not buying decent liners) also bought theirs when the new administration in Malacanang of President Fidel Ramos laid out incentives for shipping purchase and modernization. That was only then when I began to have the feeling they were sliding, a feeling I got before when the old liner shipping company Escano Lines went out of passenger shipping.

When I was in Mindoro I tend to watch liners passing by. That was my pastime and it was really such a great sight and pleasure for a ship lover. There, I already noticed the liners of Sweet Lines were already being outgunned by the new and newer great liners of the competition. The passing Sweet Lines vessels were generally older, smaller and slower compared to the competition and I was not the only one who noticed that.

Sometime in 1994 I heard from dock hands in Mindoro that the brown ships of Sweet Lines seem not to be passing by. On that place, we actually didn’t know the reason why. Cebu is far from Mindoro, there is no connection between the two places as the Cebu ships just pass by without calling. Later, we heard the news that Sweet Lines stopped sailing but it was more of an unconfirmed news. A few speculated they might have just dropped their Manila route.

One day, I think it was in the month of September, I arrived nighttime in Batangas port. I noticed three brown ships tied at the far end of the quay. I asked what ships were they (it was actually dark – Batangas port was not yet developed then). The porter told me those were Sweet Lines ships sold to the Viva Shipping Lines (VSL). We were hurrying as the last bus going to Manila at 11pm is leaving so I just thought I will see them again when I come back to Batangas.

At that time, Viva Shipping Lines was the dominant shipping company of Southern Tagalog (there was no separate region of MIMAROPA yet). It had two sister legal-fiction companies, the Sto. Domingo Shipping Company and DR Shipping Company. Together, all three operated over thirty vessels including wooden motor boats called the “batel” in that area. They were so dominant the other shipping companies feared them. Below-the-belt and bullying tactics were routinely ascribed to them also. As to financial muscle, nobody doubted they were capable of buying three moderately-sized second-hand ferries.

Actually, the three vessels from Sweet Lines fit exactly the ship size needed by Viva Shipping Lines. The three vessels were also badly needed and in fact after they were fielded Southern Tagalog routes still lacked ships. That was how deep were our shortage of bottoms then in the short-distance routes when the new short-distance RORO mode was already beginning to fly. This shortage was actually the result of the calamitous decade of the 1980’s for shipping when we lost so many shipping companies, so many ships including the retirement of the former “FS” ships.

The Viva Shipping Lines had two base ports – Batangas and Lucena – and they had routes to various ports of Mindoro, the Romblon islands, Marinduque and even far-off Masbate. Their wooden motor boats (the batel) also had routes to the various island-towns in the Sibuyan Sea and to Occidental Mindoro. They also had semi-scheduled routes to Burias island and to various ports in the the southern coast of Bicol from Bondoc Peninsula in Quezon province. From Bondoc Peninsula their motor boats ranged up to Marinduque and Lucena. The origin of Viva Shipping Lines was actually Bondoc Peninsula, specifically Villa Reyes in San Narciso, Quezon.

Later, I was asked in Philippine Ship Spotters Society (PSSS) what happened to the ships sold by Sweet Lines to Batangas and what happened to them. This got me interested again in the three brown ships I saw in Batangas and to which I have sailed with the the subsequent years.

The three ships were of moderate size in the Sweet Lines fleet but in Viva Shipping they were already among the largest. The three were the Sweet Pride, the last ship ever acquired by Sweet Lines, in 1991; the Sweet Pearl, acquired in 1989; the Sweet Marine, acquired in 1988. They became the Viva Penafrancia 5, the Viva Penafrancia 3 and the Viva Penafrancia 8, respectively. Later, the Viva Penafrancia 5 and Viva Penafrancia 8 became very well known in Batangas and Calapan.

Sweet Pride was originally the Seikan Maru No. 5 of Higashi Nippon Ferry in Japan. She was built by Taguma Zosen in Innoshima, Japan in 1968 with the ID IMO 6908254. She measured 68.0 meters x 14.2 meters and 1,500gt with 2 x 1,300hp Daihatsu engines and 15.5 knots in speed. As Viva Penafrancia 5, she had a sitting passenger capacity of 900.

Sweet Pearl was originally the Ashizuri of Sukomo Kanko Kisen KK in Japan. She was built Usuki Tekkosho in Usuki, Japan in 1971 with the ID IMO 7126009. She measured 69.7 meters x 13.6 meters and 1,275gt with 2 x 2,000hp Niigata engines and 16 knots in speed. As Viva Penafrancia 3, she had a sitting passenger capacity of 802.

Sweet Marine was originally the Taikan Maru No. 3, also of Higashi Nippon Ferry in Japan. She was built by Shimoda Dockyard Company in Shimoda, Japan in 1968 with the ID IMO 6829197. She measured 60.0 meters x 12.8 meters and 913gt with 2 x 750hp Daihatsu engines and only 11 knots in speed. As Viva Penafrancia 8, she had a sitting passenger capacity of 762. This ferry was the sister ship of Asia Brunei (now Grand Unity of Navios Lines and formerly Blue Water Princess 2 of Blue Magic Ferries), Asia Indonesia (now Grand Venture 1 of Navios Lines) and Filipinas Dapitan of Cokaliong Shipping Lines Inc. I just wonder if in Batangas they realize that the ships of Navios Lines were sister ships of a ferry they once knew as Viva Penafrancia 3.

In the Sweet Lines fleet, the three were overnight ferry-ROROs and they were relatively big for that role in those days. In Viva Shipping Lines the three were converted to and became workhorses in the short-distance ferry routes of the company. In general, the three were not used for the overnight routes of Viva Shipping Lines.

The Viva Penafrancia 5, Viva Penafrancia 3 and Viva Penafrancia 8 all had successful careers in Viva Shipping Lines. Moreover, the three also became tools in the shipping wars for the continued dominance of Viva Shipping Lines in Southern Tagalog. When the three came for the company in 1994, Viva Shipping Lines still had complete dominance in the region. That was the time there was still lack of bottoms in the Southern Tagalog routes.

However, before the end of the last millennium there were already so many ferries in Batangas. Montenegro Shipping Lines Inc. (MSLI) was growing fast along with the new entrant Starlite Ferries Inc. There was also a slew of smaller shipping companies trying their luck in the area. The overcrowding was also exacerbated by the fast arrivals in the area of the High Speed Crafts (HSCs), both the catamaran and the fastcraft type and they had their own wars too. The area soon degenerated in a dog-eat-dog world or as the Tagalogs would say, “Matira ang matibay”.

As they said, no thing lasts forever. And events revealed that it was Viva Shipping Line which was “hindi matibay” (but of course, “patron saints” have their darlings too). In the early 2000’s, Viva Shipping Lines hit rock, so to say and they were in trouble. Maybe aside from “patron saints”, passenger resentments might have also tipped the scales. They gradually quit sailing and as they did that they left their ships in anchorage in Batangas Bay, in Lucena (they have a shipyard there) and in their original base of San Narciso, Quezon. They then put up their ships for sale.

In 2003, Viva Penafrancia 8 was sold to a Ernesto V. Mercado, a ship breaker followed by Viva Penafrancia 3, also to the same breaker in 2004. Meanwhile, Viva Penafrancia 5, the most regarded of the three was laid up in Elfa Shipyard in Navotas, Metro Manila. She might not be there now and she might have gone to the shipping heavens, too.

And that was the career of the three Sweet Lines ships that went to Viva Shipping Lines. They all died before their time not because they were not good. It was their companies that was not good enough for them.

Note: There was another Sweet Lines ship that went to Viva Shipping Lines in 1988, the second and Japan-built Sweet Faith, the ex-Hakodate Maru No. 11. She became the San Lorenzo Ruiz in Sto. Domingo Shipping Company. This transfer had no connection with the collapse of Sweet Lines, Inc.