Philtranco Always Tried Horizontal Integration

Horizontal integration is the setting up or the acquisition of a company at the same level of the value chain and that is meant to help the company compete. It can be a competitive strategy where economies of scale, more efficiency and increase of market power are the objectives. Companies engage in horizontal integration to benefit from possible synergies. But sometimes the resolution of a problem or a bottleneck prods a company into horizontal integration.

Philtranco Service Enterprises, Inc. (PSEI), the leading bus company in the Philippines then tried this strategy over a generation ago. From running a big fleet of buses from Manila to the southern part of the Philippines up to Davao City, they established their own RORO companies in the San Bernardino Strait crossing that linked Sorsogon and Samar. However, the results were certainly very mixed, to say the least, and controversial.

16070468655_6976b4ab06_k

The Cardinal Ferry 1. Research by Gorio Belen of PSSS in the National Library.

Since 1979, Philtranco buses (they were still known as Pantranco South then) have been rolling across already to Eastern Visayas via the San Bernardino Strait using the newly-fielded RORO Cardinal Ferry 1 of Cardinal Shipping. Newport Shipping which had ferries and cargo ships from Manila to Samar then followed with their Northern Star and Laoang Bay.

This reaction of Newport Shipping was very understandable as Newport Shipping was not really doing well with their Manila to Samar route and maybe they felt they have to defend their home turf as the owner of Newport Shipping is from Laoang, Northern Samar. They might have also felt that this new intermodal route might kill them in the long term and so they have to join the fun.

"Maharllika 1" Ferry unloading Bus

MV Northern Samar. Formerly the MV Northern Star before she was refitted. Photo by Lindsay Bridge of PSSS.

Before the ROROs arrived it was the motor boats of Bicolandia Shipping Lines (this company has legal-fiction companies like E. Tabinas) which dominated the route across San Bernardino Strait. But with the buses now rolling the passengers no longer have to cut their bus trip to Matnog and they do not take a local bus to Allen, Northern Samar to take the lancha (motor boat). Convenience is what the intermodal system offered. Cargo of the passengers that was once a hassle became less with the bus for it afforded less handling and haggling.

Immediately, there was a surplus of bottoms in San Bernardino Strait as the government-owned Maharlika II (later replaced by Maharlika I whom it replaced earlier) was also plying the official Matnog to San Isidro, N. Samar route. Moreover, the passengers to Eastern Visayas did not immediately shift to the buses especially the passengers to Leyte. They were still content with the liners of Sulpicio Lines and William Lines which had calls in Calbayog, Catbalogan, Tacloban and other ports in Leyte and Southern Leyte. In terms of comfort the bus is actually inferior to the liners which has its own toilets and baths, are equipped with bunks with mattresses and even linen (called “beddings”) plus the meals are free and the rice servings are generous. However, they only call in ports unlike buses which roll through the various towns.

Maharlika I

The Maharlika I. Photo from Edison Sy of PSSS.

In the aftermath of that surplus of bottoms, Cardinal Shipping and Newport Shipping teetered especially when Eugenia Tabinas got into the RORO act starting when she was able to acquire the Northern Star in 1981 which she then renamed into the Northern Samar. Eugenia Tabinas was in a strong position as she dominated the intra-Bicol routes with her motor boats and so she can compete in one of her routes at just break-even.

However, with many buses crossing San Bernardino Strait, Philtranco thought they could save money if they operated their own ROROs where they will always have priority. And so they also got caught in the RORO act (they were still strong then and they have just re-fleeted into Hino) and they thereby acquired the Laoang Bay of Newport Shipping which was renamed into the Black Double. In 1984, this became the Philtranco Ferry 1 of Philtranco Services.

1984 0915 MV Philtranco Ferry I

The Philtranco Ferry I. Research of Gorio Belen of PSSS in the National Library.

It is here that things began to get interesting and lively. Eugenia Tabinas or Bicolandia Shipping smelled that Philtranco was operating without a Certificate of Public Conveyance (CPC) and complained to MARINA, the Maritime Industry Authority which is the country’s maritime regulatory agency and which has quasi-judicial powers. Philtranco countered that since they were only loading their own buses then there is no need for them to get a CPC. Now, if MARINA agrees with that then Philtranco will be the only sea carrier without a CPC and that has great implications.

Along the way, Black Double got unreliable as she was built in 1962 and diesel engines were not yet as reliable (with changes in design and technology that changed in the mid-1960s especially when Daihatsu marine engines became dominant). She was sold to Badjao Navigation and she became the Badjao and she plied a route from Cebu island to Leyte.

While the case was pending (as it reached the higher courts as MARINA quasi-judicial decisions can be appealed in the Court of Appeals and the Supreme Court), Philtranco acquired the salvaged Mindoro Express from Prince Valiant Navigation which then became the Christ The Saviour and Christ The King. The RORO became the Luzvimin Primo because she was now under the Luzvimin Ferry Services, the new ferry company of Philtranco.

Mindoro Express ( now Maharlika Cinco )

The Mindoro Express just before she became the Christ The King and Luzvimin Primo . Photo by Edison Sy of PSSS.

In due time (which means a long time), the Supreme Court sustained the ruling of MARINA that a shipping company cannot carry passengers without a CPC and the ferry service of Philtranco stopped. By that time Philtranco was already toppling and it was fast losing its Hino buses.

Philtranco then fell into the hands of transportation mogul Pepito Alvarez who then equipped Philtranco with his new MAN and Nissan buses. Soon, he was able to reach a deal with the administration of President Fidel V. Ramos to operate the already-weak Maharlika ferries which in that time consisted only of Maharlika I and Maharlika II (this one was not in San Bernardino Strait but in Surigao Strait).

After settling in, Pepito Alvarez added the Maharlika Tres, Maharlika Cuatro and Lakbayan Uno (this was later sold to Millennium Shipping). And then the Luzvimin Primo became the Maharlika Cinco. Later, the Maharlika Seiz and Maharlika Siete were also also added to be followed by the Grand Star RORO 1 and Grand Star RORO 3 which came from Phil-Nippon Kyoei. This time Philtranco was already careful about the CPC. In these moves, Pepito Alvarez worked through his protégé Cristopher Pastrana.

Liloan ships

Maharlika Cinco and Maharlika Seiz. Photo from the PPA.

The horizontal integration of Philtranco was not necessarily beneficial for the passengers unless maybe in its early years when the dominant Bicolandia Shipping Lines engaged in what is locally-known as “alas-puno” system of departures when a ferry will only leave if it was already full of rolling cargo (and that was the cause of their downfall later). With that system, the buses and its passengers lose time and it could be in the hours.

But when ROROs bloomed in San Bernardino Strait, horizontal integration became a negative because Philtranco buses have to wait for the ferries (Maharlika ferries were not so reliable and it tried many routes in the country including in Catanduanes, Masbate, Marinduque, Batangas and Panay and so its presence in San Bernardino Strait and Surigao Strait was actually diluted and trips were few) as Philtranco buses have no freedom to sail in competing ferries.

I was once a passenger aboard a Philtranco bus from Davao. Our driver was driving fast so we can board the morning RORO of Maharlika in their Dapdap port (owned by sister company Philharbor). We arrived at 8:30am only to see the ferry has just left. There was only one Maharlika RORO then there and we waited for its return. Finally, we left Dapdap port at 1:30pm and everybody was so pissed up including the drivers as we saw several ferries leaving the competing BALWHARTECO port ahead of us. If our Philtranco bus had freedom, we would have been aboard the first of those that left BALWHARTECO port and saved several hours of waiting time.

Dapdap port

Grand Star RORO I and Maharlika Tres in Dapdap port. Photo by Mike Baylon of PSSS.

The Philtranco driver/conductors also didn’t like that they have no freedom to load the buses in competing ROROs. The reason is they can’t avail of the “rebates” offered by the competing shipping companies. This comes in the form of free ferry tickets that can be sold by the driver/conductors to their passengers. Even if only half the tickets are free that can come up to an average of P1,500 for the driver/conductors in additional income.

When Archipelago Philippine Ferries, the name of the shipping company established by Pepito Alvarez) weakened and they just had a limited number of ROROs running, Philtranco finally allowed its buses to ride the competing ferries as passengers began to shun them. However, when the FastCat ROROs came for Archipelago Philippine Ferries, the Philtranco buses were no longer allowed that again. There was also the experiment where the Philtranco buses were no longer boarded aboard the FastCat ROROs and only the passengers and their cargo were loaded. In that system, a Philtranco bus will be waiting at the opposite port.

Philtranco 1833 and 1710

Philtranco buses that disembarked from a FastCat. Photo by Mike Baylon of PSSS.

Now, Philtranco’s fleet is whittled and it is already far from its number in the 1980s after they re-fleeted from Leyland to Hino. And the tables turned already. It is so-many FastCats that needs them now and not the other way around.

Now, did you know that founder A.L. Ammen tried horizontal integration too?

Advertisements

The MV Eugene Elson

The MV Eugene Elson of Penafrancia Shipping Corporation of Bicol is one of the oldest ROPAXes (Roll-On, Roll-Off Passenger ship) still sailing in Philippine waters but she is still very reliable and well-appreciated. As a 1965-built ROPAX from Japan she has the looks and lines of the small ROPAX of that era which means she is a little chubby in looks and not that angular like the MV Melrivic Seven of Aznar Shipping which was also built in 1965. However, those looks do not detract from her primary purpose and mission which is to ferry passengers and rolling cargo (i.e. vehicles) safely and reliably.

Eugene Elson 1

Photo by Dominic San Juan of PSSS

This ship’s usual route is Tabaco, Albay to Virac, the capital and main port of the small island-province of Catanduanes. Tabaco City is the gateway to the province and the size of MV Eugene Elson is just right for that route as there are almost no ferries that is 50 meters in length there (except when there rotations due to drydocking). And also there are no 30-meter ferries in that route out of respect for the waves in the sea between the two provinces and besides single-engine ferries are not liked there, for safety and maneuvering reasons. So the MV Eugene Elson with its two engines and screws fits the bill well there too.

The MV Eugene Elson is a RORO ferry built by Hashihama Zosen of namesake city Hashihama in Japan where their yard is located. As said earlier, she was built in 1965 but her IMO Number is already 6601517 (in those days the first two digits of the IMO Number indicate the year the ship was built but that is not the case anymore nowadays). She was completed in December of 1965 and completion date is the date when the ship is already equipped and ready to sail. Her external measurements are 41.7 meters in Length Over-all (LOA), a Registered Length (RL) of 38.5 meters and a Length Between Perpendiculars (LPP) of 37.5 meters. The ferry’s Breadth is 14.6 meters locally although in Japan it was only 12.5 meters (the first one might be the more accurate one). Her Depth is 3.0 meters. As a whole she is not a big ship and a ship that is only a little larger than a basic, short-distance ferry-RORO (by the Philippines Ship Spotters Society definition) which in general is only 30 meters or so in length and sometimes even shorter.

In Japan, her Gross Tonnage (GT) was 526 (tons is no longer affixed in GT) but locally it was only 488. Her declared Net Tonnage (NT) which is the usable space of the ship for passengers and cargo is 118 which is rather suspiciously low. The ship’s Deadweight Tonnage (DWT) is 138 tons and she has a passenger capacity of 484 persons, all in sitting accommodations. The MV Eugene Elson is actually the smallest ferry in the fleet of the Penafrancia Shipping Corporation (PSC) which was the successor company to the defunct Bicolandia Shipping Lines which used to own her. However small, this ferry still has two passenger decks with an airconditioned Mabuhay Class.

Eugene Elson bridge

Photo by Dominic San Juan of PSSS

The ship’s hull material is steel. She has one mast, two funnels and two RORO (Roll-on, Roll-off) ramps for ingress and egress of vehicles but the bow ramp is also the one used by the passengers for the same purpose as ferries in Bicol do not have separate passenger ramps (the stern ramp of this ship seems to have been welded shut already). The bow ramp of this ship is extended to better cope with low tide conditions. This ferry has a raked stem (which was what was usual in the era) and a transom stern (which is still what is common nowadays).

The MV Eugene Elson is powered by two Daihatsu marine engines with a total output of 1,100 horsepower. This is sufficient to propel her at 11.5 knots when new but nowadays she just chugs along at about 10 knots, the reason she takes four hours for her route which is less than 40 nautical miles. That is not a shame as most ferries in the route have about the same sailing time although some are faster than her.

Our group, the Philippine Ship Spotters Society (PSSS) is familiar with this ship as once the group has already toured her when she was drydocked in Nagasaka Shipyard in Tayud, Cebu and the master then, Captain Jun Benavides was gracious and hospitable enough to let us roam his ship and use her as a ship spotting platform (yes, passengers can reach the roof of this ship which is also the Bridge deck). Of course, he had also shared plenty of stories to us. We whiled our time there savoring the cooling breeze of the late afternoon until it was time to go for daylight was soon dimming.

Eugene Elson

Photo by James Gabriel Verallo of PSSS

This ship, when newly-built was first named as the MV Shimotsui Maru of the Kansai Kisen K.K. of Japan In 1976, under the same name, she was transferred to Kansai Kyuko Ferry K.K. Then in 1984, before her 20th year (the time Japan begins replacing its old ferries), this ferry came to the Philippines as the MV San Agustin of May-Nilad Shipping, a Manila ferry company that was always short in routes. Later, she became the MV Eugenia of Esteban Lul.

After a short time, this ship was transferred to Eugenia Tabinas of E. Tabinas Enterprises under the same name MV Eugenia. I just wonder about the relationship of Eugenia Tabinas and Esteban Lul. E. Tabinas Enterprises and Bicolandia Shipping Lines which are synonymous and the same is headquartered in Tabaco, Albay. These dual companies took over the ships and operations of the pioneering Trans-Bicol Shipping Lines which was then just operating wooden motor boats or MBs then which otherwise were called as lancha in the region.

During its heyday, E. Tabinas Enterprises/Bicolandia Shipping Lines was the dominant Bicol shipping company and had routes from all the relevant Bicol gateways, i.e. Tabaco, Matnog and Bulan (which are both in the province of Sorsogon and Masbate. However, in 1999 a new shipping company with deeper pockets appeared in the critical Matnog-Allen, Samar route. This is the Sta. Clara Shipping Corporation (SCSC) which challenged the claimed “pioneer” status of Eugenia Tabinas’ shipping companies. “Pioneer status” supposedly confers exclusivity to a route.

Eugenia Tabinas and Sta. Clara Shipping Corporation fought initially from MARINA (Maritime Industry Authority), the Philippines’ regulatory agency in shipping and then all the way to the Supreme Court. When Eugenia Tabinas finally lost she offered a lock, stock and barrel sell-out to her enemy which was accepted and so she forever bowed out of shipping. This was the reason why MV Eugenia was transferred not to Sta. Clara Shipping Corporation but to the Penafrancia Shipping Corporation which was created specifically for the take-over of E. Tabinas Enterprises and Bicolandia Shipping Lines. This take-over and hand-off happened in 2006 and from then on the twin companies Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation were already the dominant shipping companies in Bicol (and until now).

Eugene Elson Virac

MV Eugene Elson in older livery in Virac port. Photo by Edsel Benavides

Under Penafrancia Shipping Corporation, all the former ferries of Eugenia Tabinas were renamed (except for the sunk MV Northern Samar) and so the MV Eugenia became the MV Eugene Elson. In the fleet of Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation which has combined operations, she is the smallest in terms of Gross Tonnage and Length. But she is not the smallest ever ROPAX to operate in Bicol as there were and are a few that are even smaller than her.

As mentioned before, the Tabaco-Virac route along Lagonoy Gulf is her main route now, a route known for rough seas during the amihan (northeast monsoon) season as that route is exposed to the open sea. But even  though small, she proved capable for that route although once a bus lain to her side even though lashed from the top when a rogue wave hit her in the bow. In the said route she would leave Tabaco port at daybreak and arrive in Virac at mid-morning. She would then depart Virac port after lunch and arrive in Tabaco at about 5pm and lay over in Tabaco port for the night. It is the buses’ schedules that dictate such departure times and buses and its passengers are the priority loads of the MV Eugene Elson like the other ROPAXes based in Tabaco. Nowadays, she always leave full as so many buses and trucks already cross to Catanduanes from the Bicol peninsula.

Eugene Elson top lash

Over-the-top lashing is de rigueur in the Catanduanes route

All in all, the MV Eugene Elson had a successful career and it seems she is destined for many more years of sailing (well, unless MARINA loses its mind and cull old ships as that has been their threat for many years already). Barring that scenario, I hope she still sails and sails and sails. And keep the record as the oldest sailing ferry  in Bicol.

The King Frederick and Nelvin Jules

The King Frederick and Nelvin Jules of Santa Clara Shipping Corporation are actually sister ships which look like each other save for some minor differences. When trying to identify them I try to look for the name lest I might be mistaken in the identification (anyway, one of the two has a longer name).

22196907979_dd29ef1015_z

Both of these ships arrived in the country in 1999 and they were the opening salvo in the challenge of the newly-established Santa Clara Shipping Corporation in the Matnog-Allen route long dominated but badly served by Bicolandia Shipping Lines and its legal-fiction companies like E. Tabinas and Eugenia Tabinas. When the sister ships arrived they were not larger than the bigger ships in the route. However, they were the newest and the fastest and even newer than the government-owned Maharlika I which was built in 1982.

32933136415_27e6703f7b_k

With such an advantage the reigning Bicolandia Shipping Lines immediately cried foul and tried all the legal means to drive out King Frederick and Nelvin Jules because their old ships which were mainly acquired from other local shipping companies and were built in the late 1960’s and early 1970’s were clearly inferior already in all respects. And Bicolandia Shipping Lines has the dead weight of a bad reputation originating from their ships having the wont of not sticking to departure times and trying to get full as much as possible before departure. Plus, of course, clients always want the new.

Bicolandia Shipping Lines failed in their opposition at the level of MARINA (Maritime Industry Authority), the maritime regulatory agency and which has quasi-judicial function and all the way to the Court of Appeals and the Supreme Court. And so the King Frederick and Nelvin Jules were not driven out from route and began to beat their opposition (there were other players in the route aside from Bicolandia Shipping and Maharlika I) until the day came when Bicolandia Shipping Lines surrendered and sold itself to Sta. Clara Shipping Corporation and became the Penafrancia Shipping Corporation.

The King Frederick,  the newer of the two sister ships was supposedly named after the top gun of the combine owning Santa Clara Shipping Corporation, Frederick Uy. She and the Nelvin Jules are ROPAX (RORO-Passenger) ferries built by Kanda Shipbuilding Co. in their Kawajiri yard in Japan. The two ferries both measured at 58.6 meters in Length Over-all (LOA), 55.5 meters in Length Between Perpendiculars (LPP or LBP) with a Beam or Breadth of 14.0 meters. Originally, the sister ships had a similar Gross Tonnage (GT) of 699 with a Deadweight Tonnage (DWT) of 308 tons. By the way, the King Frederick was the last ever ship built by Kanda Shipbuilding in their Kawajiri yard.

The King Frederick‘s original name was Sagishima and she was built in 1987 and the Nelvin Jules’ original name was Kurushima and she was built in 1985 making her the elder ship of the two. When the two arrived in 1999 they were still both relatively young at 12 years and 14 years old, respectively. King Frederick has the IMO Number 8704315 while Nelvin Jules has the IMO Number 8504404 which both reflects the year when their keels were laid up. The sister ships have a steel hull, a box-like housing at the bow which protects against the rain when loading and unloading and also keeps the car deck less wet and muddy when it is raining. They both have a transom stern and ramps at the bow and at the stern. The ships both have two masts and two funnels at the top of the ship.

The sister ships are powered by two Daihatsu marine engines with a total of 2,400 horsepower and these gave them a sustained top speed of 13.5 knots when still new. In their 11-nautical mile Matnog-BALWHARTECO (Allen) route, the sister ships were capable of crossing the San Bernardino Strait in just under one hour when newly-fielded if the notorious waves of San Bernardino are not acting up. BALWHARTECO port was the choice of Santa Clara Shipping in Allen as it was a shorter route than the official Matnog-San Isidro route of the government. The San Isidro Ferry Terminal is the official government RORO port while the BALWHARTECO port is a private port and along time Santa Clara Shipping Corporation (SCSC) had a hand-and-glove relationship with the management of BALWHARTECO (Balicuatro Wharfage and Terminal Corporation).

6823289382_a00f13e083_k

BALWHARTECO Port, the original home of King Frederick and Nelvin Jules

Before fielding here a new passenger deck was built on the bridge level of both ships. However, the Gross Tonnages (GT) of the sister ships dropped to 694 which is more likely an under-declaration. The declared Net Tonnages (NT) of the two ships is 357 (a clarification, both the GT and the NT have no units). The passenger capacities of both ships are 750 persons reflecting their almost similar internal arrangements. The Depths of the two ferries are both 3.8 meters which is about average for ships their size.

The new passenger deck became an all-Economy accommodation with fiberglass seats. On the lower deck, at the front portion was the old accommodation in Japan which became the Tourist section as it was air-conditioned and had better foamed seats. That section is also where the canteen was located. All passengers have access to that canteen.

10434459006_4eb1ef24d5_z

The canteen inside the Tourist section of the King Frederick

When the gusts are up in San Bernardino Strait along with its wind-driven rains and this can be often in the peak of the habagat (the southwest monsoon) and amihan (the northeast monsoon) that section is a welcome cover especially for the more vulnerable passengers like the small children, the pregnant and the old. The habagat and amihan are both fierce in San Bernardino Strait, it affects the area more than half of the year and ships crossing the strait sometimes have to take a dogleg route lengthening the transit time and producing seasickness in many passengers.

Behind this Tourist section is another Economy section with fiberglass seats also that were built in a former promenade deck of the ship when it was still in Japan. Many prefer this in inclement weather as it does not rock as hard as the deck above and it seems the winds can be less fierce here. Of course there is one less deck to climb or descend and that matters maybe in a short route when some passengers like me don’t bother to sit at all (too many views to enjoy from the ships to the seascape to the mountains and of course the ports and its activities). Maybe the reason they put the karaoke in the upper deck is to enjoin passengers to climb there.

Below this passenger accommodation is the car deck of the RORO ships. One advantage of the two sisters is the wide beam of 14.0 meters which allows four lanes of trucks or buses on either side of the “island” in the middle of the car deck which actually houses ladders going up and down and below the car deck are crew accommodations and the crew mess which are all air-conditioned.

33611635712_da40c4c00a_z

A crowded Nelvin Jules. See the “island” in the middle of the car deck

With 55.5 meters in LPP up to five rows of trucks and buses can be accommodated. Of course, though trucks and buses dominate the load in their routes, still smaller vehicles like cars and utility vehicles will normally be in the rolling cargo mix. These ships will normally be full because Santa Clara Shipping mastered the art of giving discounts and pay-later schemes, the reason a lot of trucks and buses are tied up to them. Tied-up buses which carry passengers that cannot be delayed even have priority in loading in them. The sisters have ramps front and bow but normally it is only the bow ramps that are deployed and employed, the reason vehicles have to board the ship backwards. One thing I cannot understand with the sister ships’ bow ramp is they are off-center. I do not know what is the advantage of it. Actually in cargo loading it only tends to affect the balance of the ship.

6322034520_16e66c1b1a_z

King Frederick in Masbate. See the off-center ramp.

Along time especially with the arrival of other ROPAXes for Santa Clara Shipping Corporation, King Frederick and Nelvin Jules were also assigned to other routes of the company especially their new Masbate-Pio Duran route. There is no permanent fielding for them and the sister ships generally rotate between the two routes. Another route where King Frederick has been fielded is to their newest route, the Lipata-Liloan route which became a Lipata-Surigao route when a quake damaged the Lipata port (however, they are back now recently to Lipata Ferry Terminal).

Over-all, the sister ships proved very successful and became proven moneymakers for Santa Clara Shipping. Although 18 years sailing now locally, the two are still very sturdy and very reliable and almost no breakdown can be heard from them. What I only wish is Santa Clara Shipping make some sprucing in the ships so they will come back to like when they were still new here.

Even when the two sister ships are in San Bernardino Strait, they are no longer docking now in BALWHARTECO port as their company has a new, owned port now in Jubasan in the same town of Allen, Northern Samar. However, when this article was written none of them were there as Nelvin Jules was in the Masbate-Pio Duran route pairing with the ship Jack Daniel of the same company and they with their cargo RORO LCT Aldain Dowey are dominating the Masbate route.

33882061353_b30ca593e9_z

Nelvin Jules leaving Masbate port

I see many, many more years of sailing and service for the two sisters if the gauge is how sister company Penafrancia Shipping Corporation is taking care of the older ferries acquired from Bicolandia Shipping Lines. Both are equipped with tough and lost-lasting Daihatsu marine engines and simply put their company has the revenues and moolah to take care of them well. It has even a stake in Nagasaka Shipyard in the Tayud row of shipyards in Cebu where they are given priority.

16611852613_80ba8e3a23_z

Nelvin Jules in Nagasaka Shiyard

If 50 years is the gauge now of longevity of ships, they will still be around in 2035, knock on wood.

Allen is the King of Samar Shipping

Allen, a small town in the northwest tip of Samar island is the king of Samar shipping if measured by the number of ports existing and by the number of vessel arrivals and departures and even in the passenger throughput. This has not always been so because in the past Calbayog and Catbalogan have been the kings of Samar shipping. That was the time of cruiser liners and when the intermodal system did not yet exist.

Allen has been the connection of Samar to Sorsogon even before World War II when motor boat (lanchas) was the king of connections between near major islands. That was simply because Allen is the nearest town of Samar to the Sorsogon landmass. Additionally, Allen was also the connection then of the northwestern part of Samar to Calbayog when there was still no road connecting those two parts of Samar.

8659486219_84b71ff068_z

Credit to Gorio Belen and Times Journal

The BALWHARTECO (Balicuatro Wharfage and Terminal Corporation) port was THE port of Allen even then. This port is a private port and founded by the father of the current owning Suan family. From a port handlings lanchas, BALWHARTECO port evolved into a RORO port with the coming of the ROROS. When it did, the Matnog-Allen lanchas gave way to the ROROs until they became extinct. With that, gone too was the cumbersome mano-mano cargo handling system done by the porters.

In the past, liners from Manila docked in Calbayog and Catbalogan mainly and also in Laoang, Caraingan, Allen and Victoria. But with the finishing of the Maharlika Highway, the buses and also the trucks came to Bicol and suddenly there was a need for a RORO to cross them across San Bernardino Strait to Samar which Cardinal Shipping through Cardinal Ferry 1 provided in 1979. This was followed by other companies with ROROs like Newport Shipping whose owner is from Laoang town. Other companies followed such as the Philippine Government through Maharlika Uno in 1982 and by the Bicolandia Shipping of Eugenia Tabinas.

When the intermodal buses and trucks came, the bottom suddenly fell out of Northern Samar ports and ships and in a few years they were gone. Calbayog and Catbalogan proved more resilient but the BALWHARTECO private port in Allen grew by leaps and bounds as the years showed consistent annual increase of trucks, buses and passengers crossing the San Bernardino Strait. From a wooden wharf BALWHARTECO port was converted in a concrete causeway-type wharf. Moreover, additional buildings were added to BALWHARTECO port and it housed pasalubong shops, eateries and various offices plus a lodge and a disco above.

5116550165_6ef7d09d61_z

BALWHARTECO in earlier days. Photo by Lindsay Bridge.

When BALWHARTECO and the San Bernardino connection grew, others were tempted to also have their own like the Dapdap and Jubasan ports. Dapdap is owned by Philharbor Ferries and the new Jubasan port is owned by Sta. Clara Shipping Corporation. So now Allen has three ports and very rare is a town that has three private ports catering to ROROs.

Meanwhile, the old dominant ports of Calbayog and Catbalogan no longer have liners from Manila nor overnight ferries from Cebu with the exception of the new Manguino-o port in Calbayog which hosts Cokaliong Shipping Lines. In the main they have already lost to the intermodal trucks from Cebu which use ports in the western seaboard of Leyte as entry like Palompon, Isabel, Ormoc including GGC, Albuera and Baybay.

These changes only showed the complete triumph of the new paradigm, the intermodal system where vehicles (buses, trucks, cars, etc.) are now just rolled into ROROs including LCTs and the traditional way of shipping cargo has already been superseded.

5514038028_991bbdfaf3_z

BALWHARTECO port

In a day, Allen has nearly 20 ROROs dockings and an equivalent number of departures for a total of about 200 vehicles of at least four wheels either way so not counted here are the likes of motorcycles. Near ports of cities like Tacloban, Masbate, Legazpi and Tabaco do not even have such volume. It actually exceeds even the port of Ormoc, the greatest port in the western shores of Leyte. So that is how big is the traffic of Allen and probably many do not realize that. Additional some 2,000 passengers a day pass each way in Allen for a total of about 4,000 passengers. North Harbor of Manila doesn’t even have such passenger volume.

However and sadly, such growth, such traffic are not transferred in the locality. Where before a port confers prosperity because the big bodegas and trading houses will be there, this is not in the case of the intermodal system because the cargo, which is rolling cargo at that, just passes through. There are no bodegas or trading houses in Allen. And that is the case of all the short-distance ports in the eastern seaboard from Matnog to Allen to Liloan to San Ricardo and Lipata.

Maybe it is not right to expect to have bodegas in Allen. That is impossible as the cargo trucks will simply roll on. But there must be a way to grab some business from all those passing vehicles. Like fuel sales if the pump price is right. Or restaurants like Jollibee. There are passengers like me who desire such kind of restaurant which serve a standardized quality of food in an air-conditioned accommodation.

6969422601_465583995f_z

BALWHARTECO offices and eateries. The lodge and disco are located above.

Well, maybe even hotels or lodging houses. But the price should be right otherwise the travelers will just continue on (Allen is known to travelers as having high lodging rates). BALWHARTECO port has a lodge and that shows this is possible. The best type will be a SOGO-type of hotel that offers 12-hour accommodation for half the price.

Pasalubongs and novelty items like T-shirts are also possible. Like in lodgings the price should be right. Novelties must have the reputation of being cheaply-priced. Tourism? Maybe not. The transients did not come to Allen for that.

Allen is king of Samar shipping but it is poor. As of today it is just a fourth-class municipality which means an income of just P25-35 million yearly. Its population is still small. So it means people are not moving in for maybe there is really no growth and progress.

32697120411_83e06a9c23_z1

Jubasan port of Sta. Clara Shipping Corp.

What Allen is famous for is its illegal exactions (illegal because the Supreme Court has twice declared it is so and that is the final authority on legalities) on the vehicles and passengers. They will charge the vehicles when arriving and when departing. At P75 per truck (their rate) and and about 300 trucks and buses passing daily both ways that would have been an easy P20,000 per day net or P7 million a year. Add to that the P5 per departing passenger. That would be about another P10,000 per day or P3.5 million a year. It seems these collections are not reflected properly in Allen’s income. At P10 million a year times for 30 years there should already been an infra that Allen can be proud of but it seems there’s none as Allen still has the look of a small town.

Allen has ports that is doing good business except Dapdap. Truth is its ports are the best infra in the town. Its incomes should have been a good addition too.

33043811966_147cc320d4_z

Dapdap port of Philharbor

But Allen is still poor. Like Matnog, Liloan and San Ricardo although all have illegal exactions. Me and Rey B. called that the curse of the illegal exactions.

Sometimes they say the king is poor. Maybe that is Allen.

The Biggest Shipping Combine in Bicolandia

The Bicol Region has a handful of shipping companies of significant size and that includes the Candano Shipping Lines that is probably the most well-known before and it has clout because they also own the only significant shipyard in the Bicol region, the Mayon Docks in Tabaco, Albay. But among this handful, the biggest is the shipping combine of Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation which have practically the same group of partner-owners. This handful does not include the Archipelago Ferries Philippines Corp. which no longer acts as a Bicol shipping company and is in fact willing to forget and shut the doors on their Bicol roots because they know it is not something they cannot be proud of.

Sta. Clara Shipping Corporation, like Penafrancia Shipping Corporation is into RORO ferries and not cargo ships. Sta. Clara Shipping Corporation antedates Penafrancia Shipping Corporation because of the peculiar circumstances wherein they were born. Sta. Clara Shipping Corporation was formed in 1999 in order to challenge the then-dominant (dominant as in a near-monopoly) Bicol ferry company, the Bicolandia Shipping Lines which was known by other names like Eugenia Tabinas, E. Tabinas or Eugenia Tabinas-San Pablo (well, using legal-fiction companies is not uncommon in inter-island shipping). When Sta. Clara Shipping Corporation came into the Bicol shipping picture with its superior ships, Bicolandia Shipping Lines argued they are entitled to “protection” using what was known as the “prior operator rule”. That was interpreted by shipping companies being challenged as an equal to a near- and legalized monopoly — they argued that nobody else can enter their routes (ahem! ahem! and wow!). If there is a need to increase ships, they argued that they should be the ones that should add ships (hey, aren’t the saying they “bought” the route already?).nm-dominic-san-juan

In this fight, Sta. Clara Shipping Corporation had the backing of the Eastern Visayas mayors especially those from Leyte because their populace had already enough of the lousy service of Bicolandia Shipping Lines which practiced the “alas-puno” system wherein ships depart when it is already full or near-full, in contravention of the published times of departures. However, the Bicolandia Shipping Lines lost in the sala of the maritime regulatory agency, the Maritime Regulatory Agency or MARINA which actually has quasi-judicial powers and can become the court of first instance in maritime cases. That was the turn of the decision because that time the liberalization policy of Fidel V. Ramos on shipping was already the new norm.

Bicolandia Shipping Lines then appealed to the higher court, the Court of Appeals and upon losing again there they brought the case to the highest court of the land, the Supreme Court which also ruled against them. The Supreme Court held any incentive given by government does not mean a company gaining monopoly rights (obviously, I say). Having lost in the courts and being also losing in the seas of Bicol not only to Sta. Clara Shipping Corporation but also to other newcomers like Regina Shipping Lines (which also has deep pockets, heavy political clout and a bus company) and 168 Shipping Lines, Bicolandia Shipping Lines offered to sell themselves lock, stock and barrel. Maybe it was a good move instead of finding themselves depreciated or worse bankrupt in the long run. Sta. Clara Shipping Corp. was losing because its ships were already older than competitions’ and besides having tried the patience of the customers with their always-delayed departures they had already lost the goodwill of the public.

It was Sta. Clara Shipping Corporation that had the pockets deep enough to buy Bicolandia Shipping Lines lock, stock and barrel. They might be new but their stockholders were already established in other businesses and that even included shipping. But instead of buying Bicolandia Shipping Lines and integrating its fleet with theirs, Sta. Clara Shipping Corporation decided to form the Penafrancia Shipping Corporation for said acquisition. Penafrancia Shipping Corporation has almost the same ownership group as Sta. Clara Shipping Corporation. When the acquisition was complete Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation acted just like one company much like one or the other is a legal-fiction company. Their scheduling are united and their ticketing, berthing, crewing and supplies are unified too. That also goes through for their customer relations, the corralling of vehicles to contracts, negotiations and arrangements with the different ports and LGUs (local government units) and the maintenance of friendly relations with MARINA, the maritime regulatory agency. Drydocking and repairs are also unified.dh

Sta. Clara Shipping Corpo and Penafrancia Shipping Corporation operates four routes which are all short-distance ferry routes using ROROs. Their primary one is the Matnog-Allen route and the other routes are the Tabaco-Virac route, the Masbate-Pio Duran route and the Liloan-Lipata route, their recent expansion. In serving these routes, Sta. Clara Shipping Corp. has six ROROs and Penafrancia Shipping Corp. has four ROROs. The two companies do not operate cruisers and practically all their load are rolling cargoes which means trucks, buses, panel trucks, jeeps, cars and SUVs and even long vehicles and heavy equipment (though they don’t prefer the last two).

The six ROROs of the Sta. Clara Shipping Corp. are the following:

King Frederick: IMO 8704315. Built in 1987 by Kanda Shipbuilding Co. in Kawajiri yard, Japan. 58.6m x 14.0m x 3.8m. 694gt, 357nt, 304dwt, 750 pax. 2 x 1,200hp Daihatsu, 13.5kts when new.

Nelvin Jules: IMO 8504404. Built in 1985 by Kanda Shipbuilding Co. in Kawajiri yard, Japan. 58.6m x 14.0m x 3.8m. 694gt, 357nt, 304dwt, 750 pax. 2 x 1,000hp Daihatsu, 13.5kts when new.

Hansel Jobett: IMO 7927075. Built in 1979 by Kanda Shipbuilding Co. in Kawajiri yard, Japan. 51.1m x 14.0m x 3.4m. 610gt, 288nt, 208dwt, 580 pax. 2 x 1,000hp Daihatsu, 13.5kts when new.

Mac Bryan (ex-Ever Queen of Pacific): IMO 7034452. Built in 1970 by Shimoda Dockyard Co. in Shimoda yard, Japan. 54.0m x 12.0m x 3.8m. 499gt, 239nt, 2 x 900hp Niigata, 14kts when new.

Nathan Matthew (ex-Asia Japan): IMO 7326582. Built in 1973 by Naikai Zosen Corp. in Taguma yard, Japan. 64.0m x 13.1m x 3.3m. 1,030gt, 359nt, 443dwt. 2 x 2,000hp Daihatsu, 16kts when new.

Jack Daniel: IMO 8848604. Built in 1990 by Fujiwara Zosensho Co. in Omishima yard, Japan. 65.0m x 14.0m. 965Gt, 252dwt. 2 x 2,150 Niigata, 17kts when new.

The four ROROs of Penafrancia Shipping Corp. are the following:

Don Benito Ambrosio II (ex-Princess of Mayon): IMO 7629520. Built in 1967 by Hashihama Zosen in Imabari yard, Japan. 64.0m x 11.3m x 3.6m. 1,010gt, 686nt, 175dwt, 494 pax. 2,000hp Daihatsu + a Yanmar replacement engine, 13kts when new.

Don Herculano (ex-Princess of Bicolandia): unknown IMO Number. Built in 1970 by Shin Nihon(?) in Japan. 46.4m x 12.0m x 2.8m. 1,029gt, 454nt, 855pax. 2 x 1,000hp Daihatsu, 13.5kts when new.

Eugene Elson (ex-Eugenia): IMO 6601517. Built in 1965 by ImabariShipbuilding Co. in Imabari yard, Japan. 41.7m x 14.6m x 3.0m. 488gt, 118nt, 138dwt, 484 pax. 2 x 550hp Daihatsu, 11.5kts when new.

Anthon Raphael: IMO 8921781. Built by Naikai Zosen Corp. in Setoda yard, Japan. 61.4m x 14.0m x 3.2m. 1,093gt, 688nt, 270dwt, 400pax. 2 x 1,700hp Daihatsu, 15.5kts when new.

Note: Sta. Clara Shipping Corp. and Penafrancia Shipping Corp. do not use single-engined, single-screw ships because of its weakness in handling the strong swells of Bicol especially during the habagat (southwest monsoon) season.

ee

Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation are very good in locking in the buses. That means the buses are contracted to be loaded in them in contracts. That also means these buses are paying what is called in the trade as “special rates” or even “super special rates” or even better. In this trade, the charge on buses are way lower than the published rates because the fares of the passengers makes additional revenue. With these contracts, the buses have guaranteed loading even in peak season and the ships will even wait for them if they are a little late. The driver/conductors need not even go to the windows to transact. The “Super Angels” of Sta. Clara Shipping Corporation will then just go to them inside the car deck of the ship and if it is a company account then all they have to do is just sign and it will be settled company-to-company.

scsc-super-angels

Sta. Clara Shipping Corporation also gives the driver/conductors what is called in the trade as “rebates”. That consists of complimentary tickets that can then be sold to the passengers and the equivalent money will go to the driver/conductors as extra income for their kabuhayan (meals and many other things for their upkeep and pleasure). This practice is recognized and tolerated by the bus companies as incentives to their their driver/conductors but the general riding public does not know that (that, however, is open knowledge in the ports). So even without a contract the driver/conductors themselves will herd their buses to Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation except for Philtranco driver/conductors who are locked in to Maharlika ships without the discount their counterparts in other companies enjoy. In this world, the greatest advertisement is actually cold cash.

And I give respect to Sta. Clara Shipping Corp. for developing this practice of rebates to the bus companies and drivers/conductors. With it, development of routes is easier because the bus company need not shoulder all the expenses of bringing the bus across the strait since by rules and previous decisions they cannot charge that to the passengers. Oh, well, only slyly in case, in such a way that passengers won’t notice. But how can the passengers there in Bicol notice when fares are discounted almost whole year round? Well, with this practice the ships of Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation are almost always full of vehicles. This duo really knows their business.

The duo are also very good in locking in the trucks. The system works the same as in buses but the discounts are not that steep because there are no passengers as additional revenue. And in terms of priority in loading they come second to the buses because unlike the buses they don’t have that tight schedule to meet and there are no passengers that will complain when a ferry is missed. There are also company accounts where only the signature of the driver is needed (no payments are made) and it is settled company-to-company. There are discounts for the suki (regular customers) which can be enjoyed by the truck crew especially by the driver. As suki these trucks get priority boarding over other trucks and private vehicles.hj

This then brings us to the complaints of the driver-owners of private vehicles which only cross during vacations. When they arrive in the port they think the system is on a first-come, first-served basis and they grit their teeth and vent their frustration even over the media when they see buses and trucks that came later than them board first. Their charge is “favoritism” but they do not understand that like in many other things reservations trump their case and these suki or company accounts are just like reservations. Actually, dozens of kilometers away these priority boardings already confirm their coming arrival and in case of buses or panel trucks the reservations can be year-round and if it will not be availed they cancel the reservations over the cellphone so their space can be given to others. Reservations works in the airlines, the shipping industry, in theaters or concerts, in restaurants and in many other industries. It is otherwise called as “bookings”.

Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation are very good in cultivating the drivers. Aside from rebates, they can arrange a lot of personal services aboard the ships be it massage, manicure, services that are more personal, a good sleeping place and that also include free meals that are good. When I had access to their hospitality area inside Hansel Jobett I saw three viands for lunch including sugpo (tiger prawns) and those were free and the mess was airconditioned. That area was beneath the car deck on the engine level and I was surprised it existed. If Hansel Jobett has that then King Frederick and Nelvin Jules also have that since the three ships are related in design. It is not accessible to ordinary passengers but I was a VIP then (ehem! ehem!) and they gave me use of one the cabins. It was the equivalent of a first-class cabin of a liner although smaller.

hj-hospitality

Sta. Clara Shipping Corporation are also very good in cultivating relationships with owners. Aside from hefty discounts and priority boardings with their trucks (and no hours lost waiting in ports means extra available trucks, satisfied customers and less labor cost) there are other benefits too like company-to-company singilan (reconciliation of accounts) which in effect means a loan. I heard settling takes months and that is extra working capital for forwardersand truckers while that might just be empty space for the ship otherwise. Even if the truck crew has no more money to board the ship they will not be denied boarding. Now that is one big utang na loob.

Sta. Clara Shipping Corp. had a long, beneficial and mutually supportive relationship with BALWHARTECO, the operator of the premier port in Allen, Northern Samar which is a private port. They grew together and had a relation like brothers. Sta. Clara Shipping Corp. and Penafrancia Shipping Corporation brought in traffic to BALWHARTECO not only because they had the most number of ships but with the support of the duo to buses and trucks the traffic volume increased and BALWHARTECO earns with wharfage and other port fees.

With their cooperation together, the duo and BALWHARTECO were able to trump the other ports in Northern Samar that link to Matnog. First to be defeated was the official government port, the San Isidro Ferry Terminal. Though vehicles see San Isidro first it had an Achilles heel — it was by far the most distant port from Matnog at 15 nautical miles compared to the 11 nautical miles of BALWHARTECO and the 12 nautical miles of the Dapdap port of Philharbor which was the second to be defeated and not by distance alone since the distance difference is not significant.dba-nj-edsel

In port and ferry patronage, one that wins is the one with the most number of ships because that means there will be no long waits before departures. And it is reassuring to drivers if there are always ships in port and with multiple ones (which means a choice). That became the weakness of San Isidro port and Dapdap port even though they come into view earlier as the vehicles won’t come to them if it sees that there are no ships in port. The driver soon had the mentality to go straight to BALWHARTECO since there are always ships there.

With the acquisition of Bicolandia Shipping Lines plus other ship acquisitions, Sta. Clara Shipping Corp. became the dominant shipping company in Bicol engaged in RORO operations. They defeated the Archipelago Ferries+Philharbor Ferry combine which were more known as the Maharlika ships. That duo had no focus, were lousy in maintaining ships and were also lousy in competing, all the diseases prevalent in former crony companies. That combine supported another lousy sister company, the Philtranco Service Enterprises Inc. but their pairing actually doomed them both. Philtranco buses would wait in the port even though there are no Maharlika ships in port thus losing hours, And with a captive bus company, Archipelago Ferries+Philharbor Ferry did not learn how to play well the rebate-vehicle locking game (in fact they never seemed to learn it).

The stockholders of Sta. Clara Shipping Corporation+Penafrancia Shipping Corporation might not really need to take profit, so to speak. They are very good in their other businesses and their owners are established businessmen with some dominant in their regional sphere. Some are even engaged in shipping too. In shipping, I glimpse the method they use in their other businesses especially the locking game.

jd-aris

Soon, the duo’s owners engaged in horizontal expansion. They were able to establish a partnership with the Villono Shipyard in Tayud, Cebu. With the creation of that partnership, they withdrew patronage of the Mayon Docks in Tabaco City, Albay and brought their ships for drydocking and maintenance in the far-off Tayud. Maybe one of the benefits of this partnership is they then had a reputation of taking care well of of their old ships. Well, with a profitable operation and well-heeled owners that might not be a surprising thing.

The duo has also shown they can defend and hold turf and can also expand. The stronger Montenegro Lines (Montenegro Shipping Lines Inc. of Batangas) came but they did not buckle. At the same time they were also able to expand like when they tried the Pasacao-Masbate route being promoted by MARINA (they soon withdraw from this route). The also tried the Bulan-Masbate route which made no sense for bus passengers and for the trucks as it is farther from Manila (they can’t operate in the Pilar-Masbate route because they have no basic, short-distance ferry-ROROs and the Pilar port is shallow). However, they struck gold in the Masbate-Pio Duran, Albay route. With rebate support the buses were able to roll into Masbate even though the land kilometerage within Masbate island is short to be able to recoup the rolling cargo rate (this was the failure of the Maharlika ferries + PSEI attempt a decade before them). Recently they also went to Liloan-Lipata route.

In recent years, the duo tried another horizontal expansion, the building and operating of a port in Allen, Samar too where BALWHARTECO is also located.

This led to the split of Sta. Clara Shipping Corporation+Penafrancia Shipping Corporation and BALWHARTECO. Sta. Clara Shipping Corporation said they resented the coming of 168 Shipping in BALWHARTECO (or was it the entry of Montenegro Lines that broke the camel’s back actually?) which supposedly was against an agreement (sorry, I cannot verify this). Or maybe they also saw how profitable is a port operation and the formula they already saw in the operation of BALWHARTECO. And so they built their own port in Jubasanbut this was stopped by the Mayor of Allen who happened to be the owner of BALWHARTECO. Construction continued even though the gates were shuttered and the knowledgeable knew the Mayor will lose since a Mayor’s permit can be demanded thru a court mandamus (or even ask the Department of Interior and Local Government for his suspension). The Mayor actually has no legal leg to stand on and jurisprudence said they always lost. And so Sta. Clara Shipping Corporation was able to finish the port and it is now operating.

However, I have doubts if that is a good move in the long term. They no longer have the backing of BALWHARTECO and the Mayor of Allen town and it might just lead to a war between them. After all they both know the formula and bad blood exists now. Admittedly, Sta. Clara Shipping Corporation might have the edge as they have the ships and can do transfer pricing, that is, charge low in the rolling cargo to attract the vehicles and they can “correct” in port charges. Both of them know how to make a port attractive – loading even if the truck has no budget (but here Sta. Clara Shipping Corporation can do it both ways not only in port charges but also in shipping charges), diesel fuel loan, other rebates, the presence of shops along with eateries, lodging and a blaring disco along with many personal services to the drivers.

The problem of the two is they are not competing in a vacuum. They actually have a threat in the Fastcats, the big Montenegro Lines and the new Cargo RORO LCTs. Montenegro Lines will always be around as it has a big fleet and a deep bucket and probably supported by a heavyweight (literally and figuratively) former powerful figure, a “patron saint”. Recently, it was able to get a franchise for the Masbate-Pio Duran route and that can cut into the income of Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation. Montenegro Lines can also apply for the Tabaco-Virac route especially since Regina Shipping Lines abandoned this in favor of the Tabaco-San Andres route (hence, there is an apperance of a “monopoly”). After all this is the era of liberalization. And Sta. Clara Shipping Corporation can find itself in the shoes of Bicolandia Shipping Lines before, that is defending turf via the “legal” way. Actually they are already doing the denial game with their blocking of the entry of FastCats in Allen.

The FastCats could be the more serious threat in the long run as it has new ships, a new paradigm that could be dangerous if it is able to run many trips a day which they will certainly do. What they are showing is they will not play the old game of running just a few trips a day. It seems they will try to run to the ground the opposition because that is the only way they can win because they are carrying a lot of amortization weight.

ar-mb-nj-aris

Actually it seems duo lacks the ships now especially since they have to respond to the moves of Archipelago Philippine Ferries Corporation with its FastCats which is a different animal than they competed with in the past. Montenegro Shipping Lines presence in Bicol is also increasing as Archipelago Ferries collaborated with them and recently they even were able to get a franchise in the Masbate-Pio Duran route. In Liloan-Lipata route they had to bring a better RORO to be able to compete with the speed and newness of FastCats. The will have to respond in Masbate-Pio Duran by maybe with also plying a route to Pilar port which is improved now. They will need three ships in Masbate, one in Liloan, two in Tabaco and that will leave them with just four ships in Samar and not all might be running because of drydock requirements and the sometimes trouble like what happened to the Nathan Matthew recently which is docked in San Isidro port for repairs. Remember one of the most important factor to attract drivers is the always-presence of ships waiting in the port. They might be stretched too thin now unless they acquire new ships (they have the financial capability for that).

Another new threat also and a possible paradigm change is the new Cargo RORO LCTs that are plying routes in Matnog-Allen and in Liloan-Lipata. NN+ATS (euphemistically called “2GO” but that is near the truth) operates them by chartering big China-made LCTs. Cargo RORO LCTs is the recent bane of short-distance ferry-ROROs and overnight ferry-ROROs because these can offer rates as much as half off the current rates because they have no investment in passenger comfort and service, they are fuel misers albeit slow and they have to discount to gain rolling cargo.

What I see is a lot of labu-labo (free-for-all) in Bicol in the coming years. Many will be bruised and I don’t know which will fall to the ground. Well, I just wish it will not turn out that Sta. Clara Shipping Corporation bit more than what it can chew.

hj-cabin

Photo Credits: Dominic San Juan, Edsel Benavides, Aris Refugio, Mike Baylon, PSSS

The Pioneering But Hard-Luck Cardinal Shipping

This article could be considered a tribute to Cardinal Shipping Corporation because among all shipping companies I consider them the true pioneers of island connections using short-distance ferry-ROROs (to distinguish it to the earlier LCTs). This is also an attempt to set the record straight because some government functionaries who have no knowledge in shipping repeat and repeat that the government-owned Maharlika ships first connected Luzon, Visayas and Mindanao through short-distance ferry-ROROs when that is simply not true and factually incorrect. Personally, I hate historical revisionism in any form and that is actually what these dumb government functionaries are actually doing and then some clueless young members of media take after what they say. If this is not checked, we will see a kind of Goebbels syndrome in shipping.

As they say, research and documentation are the most important things in making claims or in debunking claims and the Philippine Ship Spotters Society (PSSS) was fortunate a co-founder, Gorio Belen, took time to research in the National Library and found the proofs needed to back up what we oldtimers knew that there were ferries that antedated the government-owned Maharlika ships and sometimes one good proof are newspaper advertisements and photos of their ship docked in Allen port. Well, maybe another good proof would come from some retired bus drivers that loaded their ships aboard Cardinal Ferry 1 and those were mainly Pantranco South bus drivers. I myself is a secondhand source because some of these drivers bought merchandise from us to be sold in Calbayog and Catarman. Of course, another good source will be the Allen and Matnog LGUs (local government units). They will know, definitely, especially some of their retired local politicians and local government employees. Add to that also some retired or still active porters.

Cardinal Shipping Corporation actually started in cargo shipping with the Cardinal V. This is a small cargo ship built in 1968 that was formerly the Ryusho Maru in Japan and that ship engaged in tramper shipping. In 1979, Cardinal Shipping branched out into RORO shipping when they brought out the Cardinal Ferry 1 to do a Matnog-Allen RORO route to the consternation of the wooden motor boats doing the route like the MB Samar and MB Sorsogon of Eugenia Tabinas (later of Bicolandia Shipping Lines). The ports they were using were not yet the modern Matnog Ferry Terminal but the old municipal port of Matnog and in Allen, they used the old BALWHARTECO wharf. Both are no longer existing. The two ports were just near the Matnog Ferry Terminal and the present port of BALWHARTECO.

Cardinal Ferry 1 was one of the many Tamataka Marus that came to the Philippines and one of the earliest. She was Tamataka Maru No. 21 and she was acquired from Shikoku Ferry of Japan. The other Tamataka Marus in the Philippines are the Reina Emperatriz (Tamataka Maru No. 71), Reina Genoveva (Tamataka Maru No. 75), Reina Hosanna (Tamataka Maru No.78), all of Montenegro Shipping Lines Inc. and Marina Ferries, Queen Helen of Arrel Traders (Tamataka Maru No. 31), Golden Arrow of Arrow Shipping (Tamataka Maru No. 51), Viva Penafrancia of Viva Shipping Lines (Tamataka Maru No. 52) and the Dona Isabel of SKT Shipping (Tamataka Maru No. 32).

Cardinal Ferry 1 was a RORO ship built by Sanuki Shipbuilding & Iron Works in Sanuki yard, Japan in 1964. She was just a basic, short-distance ferry-RORO at 39.2 meters by 9.1 meters with a gross register tonnage (GRT) of 355 tons. Cardinal Ferry 1 had a passenger capacity of 400 persons in sitting accommodations and she was powered by a single Niigata diesel engine that gave her a top speed of 10 knots when new. She possessed the ID IMO 7743118.

In 1980, Cardinal Shipping fielded the Cardinal Ferry 2 to sail the Surigao-Liloan-Maasin route. There was no Lipata Ferry Terminal then yet and they used what is known now as the Verano port now in Surigao City. In Liloan, they used the Liloan municipal port as there was no Liloan Ferry Terminal yet. Liloan, Surigao and Maasin were better ports than Allen and Matnog infra-wise as both hosted overnight ships to Cebu. With the fielding of Cardinal Ferry 2, for the first time ever Luzon, Visayas and Mindanao were connected and a vehicle can roll from any part of Luzon to Mindanao and vice-versa. This was the fulfillment of the dreams of many including the late President Diosdado Macapagal in whose administration the JICA-backed Pan-Philippine Highway project (later renamed as Philippine-Japan Friendship Highway because Japan will partly fund the mega-project and war reparations to be paid by Japan will be used in it) first took shape. During Martial Law, this morphed into the Maharlika Highway. However, the government’s version of connection happened only in 1984 with the coming of Maharlika II and that was 4 years after Cardinal Shipping did it.

Cardinal Ferry 2 was the former Shikishima Maru No. 1 in Japan and she was built by Imabari Shipbuilding Company Ltd. in Imabari shipyard, Japan in 1960 (therefore she was older than Cardinal Ferry I) and she possessed the ID IMO 5322867. She was bigger than Cardinal Ferry 1 at 50.1 meters length by 7.8 meters breadth by 3.9 meters depth. The ship has 491 tons in Gross Register Tonnage (GRT), 302 tons in Net Register Tonnage (NRT) and 800 tons in Deadweight Tonnage (DWT). This ferry was powered by a single Makita engine of 640 horsepower and the top speed was 9.5 knots.

The next year, in 1981, Cardinal Shipping laid out the Cardinal Ferry III which was the former Sanyomarugame Maru No.1 of Sanyo Kisen in Japan. She was fielded in the pioneering RORO route of San Jose de Buenavista, Antique to Puerto Princesa, Palawan! [I really wonder until now what sense this made. Maybe a Cebu-Bohol or a Cebu-Leyte connection would have more sense.] This ferry was built by Kanda Shipbuilding Company in Kure yard, Japan in 1965. Her dimensions are 44.5 meters length by 10.0 meters breadth by 2.9 meters depth. Her original Gross Register Tonnage (GRT) was 495 tons with a Deadweight Tonnage (DWT) of 190 tons. The passenger capacity was 350 and she had twin Niigata engines of a total 1,700 horsepower. The ship’s top speed was 13.5 knots which is fast for a small RORO then. The ship’s ID is IMO 6607848.

In the same year of 1981, Cardinal Shipping acquired the former Taysan of Seaways Shipping Corporation which was an old cargo ship built way back in 1956 by Sanoyas Shipbuilding Corporation in Osaka yard, Japan. This became the Cardinal VI in the Cardinal Shipping fleet and like the Cardinal V she engaged in tramper shipping.

The last ferry and ship acquisition of Cardinal Shipping was the Cardinal Ferry Seven in 1982. She was the former Azuki Maru in Japan of Kansai Kyuko. This RORO ship was built in 1964 by Hashihama Zosen in Hashihama yard, Japan. She measured 41.7 meters length by 12.6 meters breadth by 3.6 meters depth. The original Gross Register Tonnage was 473 tons with a Deadweight Tonnage (DWT) of 165 tons . Her passenger capacity was 650 persons (that is a little big!). The ship was powered by two Daihatsu engines of 1,100 horsepower and the top speed was 12.5 knots. The ship’s ID was IMO 6502191.

Although pioneering, Cardinal Shipping was not successful for long. Even before the  Maharlika I arrived in Matnog-San Isidro route in 1982 and the Maharlika II in Lipata-Liloan route in 1984, she was already under pressure. There were already other competitors that came in the two routes especially in Matnog-Allen route like the Northern Star and Laoang Bay of Newport Shipping (before this Newport Shipping has already been sailing a route from Manila to Samar). Eugenia Tabinas also got into ROROs when she was able to acquire the Eugenia from Esteban Lul of the Visayas. Later, she was able to acquire the Northern Star from Newport Shipping which became the Northern Samar after conversion in Cebu.

It was really hard to compete against the new Maharlika ships which did not need to show a profit as it was government-owned (that is how government always worked and the usual hackneyed reasoning is it is “public service”. However, there was no denying that the Maharlika ships were better as it was much newer. Cardinal Shipping also had ships that were not only old but built in the 1960’s when engines were still not that long-lasting as microfinishing was not yet in great use and metallurgical research was not yet that advanced. Their route to Palawan also did not make sense in that period. In San Bernardino Strait, they soon had a dogfight in their hands with many entrants. Not long after, the ships of Cardinal Shipping began losing to competition.

Cardinal Shipping did not completely go away however and it had a rebirth in the form of Cardinal Philippine Carrier which was based in Iloilo City. They were able to retain the former Cardinal Ferry 3 which was now known as Palawan Traders. Before this she was known as the Kanlaon Ferry, a name maybe given so she will stick in her revised route. They then added a pioneering ferry, a catamaran High Speed Craft, the Bacolod Express in 1989 to do the Bacolod-Iloilo route. This was very notable because before her only Manila had High Speed Crafts in the early 1970s. Some of those were even hydrofoils and they were used in a route to Corregidor which was being heavily promoted then as a tourist destination. 

The Bacolod Express was the former Quicksilver I and she was built by NQEA Australia in Cairns, Australia in 1986. She arrived in the country in 1989 and she was formerly known as the Princess of Boracay and in 1990, she became the Bacolod Express. This aluminum-hulled catamaran measured 29.0 meters length by 11.0 meters breadth by 3.2 meters depth and with a gross tonnage of 318 and a net tonnage of 105. She had a passenger capacity of 356 and she was powered by two MWM engines of 2,700 horsepower which gave the High Speed Craft a top speed of 27 knots. This ferry was one beautiful catamaran.

Bacolod Express was successful in her route for a few years. The first sign of trouble came when BREDCO, the incomplete reclamation area then but her port in Bacolod suddenly began refusing her docking. She cannot dock in Banago port because that was controlled then by Negros Navigation Company, a competitor of theirs which operated conventional ferries between Iloilo and Bacolod, the Don Vicente and the Princess of Panay. Definitely, Bacolod Express was taking traffic away from NENACO which had no equivalent at the start to Bacolod Express (they later fielded the St. Michael). Everybody knows NENACO’s board were powers magnificent then in Western Visayas and could make things happen (or not happen).

Not long after, Bacolod Express also began experiencing engine troubles (in less than 10 years of operational life?) thus unreliability plagued her. That was deadly when new competitors came into her route. With Bacolod Express no longer able to carry the flag, Cardinal Philippine Carrier soon quit the business. They sold the Palawan Traders to E.B. Aznar Shipping where she became the Melrivic Seven. Today this ship still sails the Tanon Strait crossing between Escalante and Tabuelan where she once sailed before. She is the only remnant left and living reminder that once there was Cardinal Shipping but many people do not know that. Maybe not even her crew.

That was the sad tale of Cardinal Shipping which was pioneering in very many ways but which lost in the end. I doubt if many still remember them.

cardinal-shipping

Photo Credits: Gorio Belen, Times Journal and Philippine Daily Express