What Has MARINA Done For The Country’s International Container Shipping?

It was in 1974 that MARINA, the Maritime Industry Authority was created by a Presidential Decree by then President Ferdinand Marcos. Its primary mandate was the development of our maritime industry. For such function it has the shipping companies, the seamen and the shipyards under it. MARINA was our maritime regulatory agency and it even has quasi-judicial powers. As such this agency is responsible for issuing franchises to ships and in approving route permits. For a long time too they decided rates and fares in the shipping industry. MARINA was in charge of the inter-island trade as well as the ocean-going trade.

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From the research of Gorio Belen in the National Library

When MARINA was created in 1974, we still had many international lines ranging from Philippine President Lines (sometimes known as United President Lines), Maritime Company of the Philippines, the Eastern Shipping Lines, Madrigal Shipping as well as an assortment of smaller international lines some of which were associated with our national passenger liner companies. In those days we were ahead of most of our neighbors in international shipping and that might have included even South Korea and China. Can anybody imagine that was possible and believable? It can even be an entry now in “Ripley’s Believe It Or Not”.

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From an newspaper found by Grek Peromingan

When Martial Law came another ocean-going company emerged in the scene, the Galleon Shipping Corporation of Herminio Disini, a documented Marcos crony (“Some Are Smarter Than Others” by Ricardo Manapat) and of the Bataan Nuclear Power Plant “fame”. He and the surging Philippine President Lines (PPL), now helmed by Emilio Yap, of the Manila Hotel and Manila Bulletin fame, had a race in the ocean-going scene, acquiring tons of big ships from the National Development Company (NDC) of the Philippine Government. Government functionaries during Martial Law simply cannot ignore what were called as “marginal notes”.

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From an newspaper found by Grek Peromingan

The two giant companies were able to accumulate a total of some 200,000 gross tons of ships totaling some 20 ships each. How big was that? The only other time that figure was approached was when the WG&A was created with the merger of William Lines, Carlos A. Gothong Lines Incorporated and Aboitiz Shipping Corporation in 1996 and that included the container ships for a total of some 60 ships.

In using government funds for development the National Economic Development Authority (NEDA) is mandated act as the validator if the project really makes sense. And I assume the input of MARINA was sought in the maritime field because supposedly it regulates this field and it is tasked for its development.

I wonder about the divergence. In the 1970’s, our neighbors were already stressing and supporting the creation of their international container lines after seeing this new paradigm develop in the late 1960’s in the more advanced countries. In our country, what the National Development Company acquired for Philippine President Lines and Galleon Shipping Corporation were the castoff bulk carriers and OBO ships of the other countries some of which were even built in the 1940’s and the 1950’s (and it was already in the 1970’s; during that period we buy ferries that were 10 years old). What was the sense in that? Well, if there is “slush”, then that is the “sense” maybe.

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Built in 1958. From the research of Gorio Belen in the National Library

Where was MARINA in all of that? They should have been the “experts” telling the government the “development” was headed in the wrong direction. Shall we lay the primary blame to NEDA? They might have MBA graduates there from good schools but that degree does not confer any maritime knowledge (well, they might not even know the difference of port to starboard or bow to stern). Was it because MARINA is full of lawyers in the upper echelons and not by true maritime experts? The government can hire consultants if they lack knowledge. Did they ever try to enroll true maritime experts in this case?

Fast forward to the great political and financial crisis of 1983 when Ninoy Aquino was assassinated and the economy was tottering, let alone the Marcos regime. Not long after this the Philippine President Lines and Galleon Shipping Corporation toppled along with the Martial Law regime that supported them. Their ships stopped sailing and most were given the fiery torch treatment of the ship breakers. Some others, the newer ones were sold abroad. Practically none survived locally except for the Galleon Tourmaline which became the Madrigal Integrity of Madrigal Shipping.

And that was really a great lost chance for Philippine shipping. It invested a lot of money in ships and all came to naught. And it is very hard to find a second chance after a venture that lost great money and simply went down the drain. The government was left practically holding nothing but just an empty bag. Or shall we say a bag with a lot of scrap metal.

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From the research of Gorio Belen in the National Library

In the 1980’s and early 1990’s, some local shipping companies still tried to engage in the international container trade at least in the short routes in the Far East. It was not really a full container service as understood in the full sense of the world. One of these was the Aboitiz Overseas Shipping Corporation (AOSC). Another was the Eastern Shipping Lines (but it was mainly operating general cargo ships). None ever engaged big container ships by international standards.

I thought Aboitiz was serious in this business when they acquired three brand-new container ships from Ukraine starting in 1994, the Ramon Aboitiz, Vidal Aboitiz and the Luis Aboitiz. The three were under Aboitiz Jebsens and were not part of the merger that produced WG&A. However, after a few years the three were sold. Maybe they found out competing with established international container lines is difficult. We don’t have much to offer the world anyway. Abaca and copra have lost importance in the world market and we have no more logs left and metal ores were in the doldrums then. Our tropical fruits and fresh produce still had limited production and markets then.

A new millennium is always greeted with great fanfare, hopes and expectations. But not in our international shipping. By this time we almost have no container ships going abroad. We practically have no bulkers or OBO ships going abroad. Of course, some small general-purpose cargo ships will go abroad if there is cargo but that is nothing to be proud of and that is not significant enough to be counted. All we had was a lot of mariners wanting to board ships somehow.

Where was MARINA in this plunge of our international shipping, I would like to ask? Where were they as developers of our shipping? Where they simply just too busy pushing papers and affixing their signatures to the regulations they impose on our seamen? Their number is nearly a million so imagine all the papers that need to be cleared. Maybe because of the weight of all of these they have already forgotten that their primary duty is to develop our maritime industry. Actually our mariners are over-certificated. Our doctors, engineers and other professionals don’t have to waste time pursuing such many certificates. In the mariner world, it is not only certificates that they have to cope with. They also have to undergo a lot of training repeatedly at their own expense. Maybe the lawyers in MARINA should be the first one to undergo and pass these trainings and be able to handle ships in the real world.

Today, we still have no international container shipping lines. Well, not even reefers which are important to our fresh fruit and fresh produce exports except for two ships I heard is chartered by Lapanday Foods Corporation of the Lorenzo family. If an innocent lad will look at the ships that call on our ports he might think our national line is Maersk as they dominate our foreign trade.

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A ship of the de facto “national” container line of the Philippines

Today our neighbors have their international container lines. We have none. So clearly in this segment MARINA was clearly a great failure after all these years. It simply dropped the ball.

What are their plans for this segment? Or is it better to just dissolve them and replace them with a body of true maritime experts (like those who know that most maritime accidents are caused by human error) who truly have the interest of our shipping in their hearts and have the vision (and who know their main job is not the export of mariners)?

The State of Philippine Shipping at the Start of 1990

The start of decades are many times an opportune way to take stock of things. Many countries do that by holding their censuses and we likewise do that. I want to focus on the year 1990 because the decade previous to that was very difficult and dangerous for the country and the economy. That decade was marked by many crises and turmoils and as a result our economy suffered tremendously. Economically and financially, the 1980’s was our second worst decade in the last century after the 1940’s in which World War II occurred. In that war decade, we were subject to invasion, occupation and devastation and our economy therefore shrank.

The crisis decade of the 1980’s was calamitous to our shipping. In terms of damage, it was even worse compared to the 1940’s. After the war, the United States of America (USA) replaced our ships that they requisitioned for the war (and which were lost). Later, Japan also paid reparations for the shipping damages they caused, in terms of new ships and soft loans, among other goods. In the 1980’s, we had none of such free replacements and we were not able to recover the wealth pillaged by the Marcos dictatorship. Our peso also lost so much value that acquiring ships became very difficult (in fact we can’t even buy new ships anymore unlike before). And that difficulty was reflected in the size and quality of our shipping fleet.

At the start of 1990, our biggest shipping company in the previous three decades, the Philippine President Lines or PPL (they also used the company United President Lines or UPL) was practically dead already. They were just acting as shipping agents and they were no longer sailing ships. And then their main rival in size, the Galleon Shipping Corporation which was a crony company was already bankrupt even before the end of the 1980’s. Another company of similar size, the Maritime Company of the Philippines/Maritime Company Overseas, the ocean-going company of Compania Maritima quit shipping at the middle of the 1980’s. These three companies, our biggest, were all in the foreign trade. The ships of these three companies which were mainly chartered from the National Development Corporation or NDC (a government-owned and controlled corporation) were all seized by or returned to the Philippine Government. Those were then sold one by one to international buyers at bargain prices. These three ocean-going companies all had well over 100,000 gross tons of ships in their fleet, a size only a very few reached in all our decades of shipping.

Another shipping company that was once big, notable and well-connected, the American-owned but Philippine-based Luzon Stevedoring Company (LUSTEVECO) also went under. But this has a myriad of reasons aside from the crisis of the early 1980’s and that included the end of the so-called “Parity Rights” (where Americans were given business and commercial rights in the Philippines as if they were Philippine nationals and they can repatriate profits to the USA 100%). This was due to the Laurel-Langley Agreement taking effect in 1974. This company was practically broken up (under pressure, some said) and its assets and ships went to different companies including the Philippine Government which then passed on its assets to its government-owned shipping companies like the Philippine National Oil Company or PNOC.

Our biggest inter-island shipping company for nearly 90 years, the Compania Maritima which has Spanish origins and which started when Spain was still ruling the Philippines was also gone by the mid-1980’s. They quit at the height of the political and financial crisis then when everybody was panicking and many companies were going bankrupt or otherwise illiquid. The owners, the Fernandez brothers who were dual citizens packed up their bags and headed back to Spain (and to think one of them was a former Senator of the Republic!). Compania Maritima was so big – aside from local ahipping they also had an international shipping line (the Maritime Company of the Philippines/Maritime Overseas Company as mentioned before) plus they owned ports and they had stevedoring and forwarding operations.

A host of our smaller shipping lines with foreign routes also went belly up or quit in the 1980’s. These included General Shipping Corporation, Northern Lines Inc., Transocean Transport Corporation, Philippine Ace Shipping Lines, Philippine Transmarine Carriers, Triton Pacific Maritime Corporation, etc. Actually, so many (as in about three dozens) of our big freighters, refrigerated cargo ships and bulk carriers owned by the National Development Corporation that were chartered to Philippine shipping companies doing overseas routes (especially Galleon Shipping Corporation, Philippine President Lines/United President Lines and Maritime Company of the Philippines/Maritime Company Overseas) were broken up in the 1980’s because they were no longer sailing. About the same number were also sold to foreign shipping companies and usually at bargain prices. The decade of the 1980’s witnessed the practical end of our ocean-going fleet and after that we only had half a dozen ships remaining doing foreign routes and those were mainly below 100 meters in length.

Along with Compania Maritima, the graveyard list of our inter-island shipping companies is really long and so I will just enumerate the them. These companies did not even make it out of that horrendous decade for Philippine shipping:

Galaxy Lines (an offspring of Philippine President Lines)
Northern Lines (referring to their inter-island operation)
North Camarines Lumber Company/NCL/NORCAMCO (they changed names)
N & S Lines
Bisayan Land Transport
Newport Shipping
Cardinal Shipping
Rodrigueza Shipping
May-Nilad Shipping
Javellana Shipping
Visayan Transportation
Corominas, Richards Navigation
Royal Line
Veloso Shipping
Visayas Lines
MD Shipping
Tomas del Rio & Co. (formerly Rio y Olabarrieta)
Balabac Navigation

This is far from a complete list as there were many regional shipping companies which went down quietly and it is hard to enumerate them all for many are indistinct.

In the liner front, two old liner companies were no longer carrying passengers at the start of 1990. These were the Escano Lines, a pre-World War II shipping company and Lorenzo Shipping, a spin-off of the old Carlos A. Go Thong & Company. Both decided to just stick to cargo and container shipping. Maybe refleeting for passenger service with liner ships was already too much for them after that crisis decade of the 1980’s.

William Lines and Sulpicio Lines seem to have been the healthiest and definitely the biggest strongest at the start of 1990. Among the shipping companies they were in the best position to take advantage of the fall of erstwhile leader Compania Maritima and the retreat of Lorenzo Shipping and Escano Lines from passenger shipping along with the withdrawal and dissolution of many other various shipping companies in the 1980’s because the two truly had national routes unlike the other liner shipping companies.

William Lines Inc. had nine liners at the start of 1990 and that included two old former FS ships still surviving. Their liners were the Dona Virginia, Manila City, Ozamis City, Cebu City, Tacloban City, Misamis Occidental, Masbate I, Don Jose I and Edward. The last two were ex-FS ships on their last legs. Their overnight ferry was the Iligan City, a former liner then just doing the Cebu-Iligan route. They also had two RORO Cargo ships that can take in passengers and these were the Wilcon I and Wilcon IV. Their other container ships were the Wilcon II, Wilcon III, Wilcon V, Wilcon X and Wilcon XI.

Sulpicio Lines Inc. had eight liners and these were the Filipina Princess, Philippine Princess, Davao Princess, Don Eusebio, Cotabato Princess, Surigao Princess, Cebu Princess and Dona Susana. Their overnight ferries were the Nasipit Princess, Cagayan Princess and Butuan Princess. Their container ships were the Sulpicio Container II, Sulpicio Container III, Sulpicio Container IV, Sulpicio Container V, Sulpicio Container VI, Sulpicio Container VII, Sulpicio Container VIII, Sulpicio Container IX, Sulpicio Container XI, Sulpicio Container XII and Sulpicio Container XIV. Aside from liners, Sulpicio Lines had more ships than William Lines in the other categories (overnight ferries and container ships).

Sweet Lines Inc. had six liners at the start of 1990, the Sweet Baby, Sweet RORO 2, Sweet Glory, the second Sweet Sail and Sweet Hope. Their liner Sweet RORO I was no longer running reliably then and would soon be broken up. Their overnight ships were Sweet Pearl, Sweet Hope, Sweet Marine, Sweet Heart, Sweet Home and the second Sweet Time which sailed Visayas-Mindanao routes. They had a separate cargo-container liner company then which was the Central Shipping Company with the ships Central Mindoro, Central Visayas, Central Cebu and Central Bohol. Another cargo shipping company they had was the Casas Navigation Corporation with the ship Casas Victoria.

Aboitiz Shipping Corporation had three old liners then, the Legazpi, Ormoc and Legaspi 1 (the former Katipunan of Escano Lines) and these were just sailing their two remaining liner routes to Capiz and Leyte. They had four overnight ships, the Elcano, Ramon Aboitiz, the first Aklan, and the ex-FS ship Picket II, which were all old, former liners in their last legs. They also had the Marcelino, an ex-FS ship and Guillermo in the subsidiary Cebu-Bohol Ferry Company. Aboitiz Shipping Corporation had the most container ships locally with twelve: the Aboitiz Superconcarrier I, Aboitiz Superconcarrier II, Aboitiz Superconcarrier III, Aboitiz Megaconcarrier I, Aboitiz Concarrier I, Aboitiz Concarrier II, Aboitiz Concarrier IV, Aboitiz Concarrier VI, Aboitiz Concarrier VIII, Aboitiz Concarrier X, Aboitiz Concarrier XI and Aboitiz Concarrier XII. Container shipping was the strength of Aboitiz Shipping because they concentrated on this when for 14 years they did not buy any liners, the reason their liner fleet wilted.

Negros Navigation Company had five liners sailing then, the Sta. Florentina, Sta. Ana, Don Julio, Don Claudio and Sta. Maria. These were just sailing five routes then – Romblon, Roxas City, Iloilo, Bacolod and Cagayan de Oro. They also had two Iloilo-Bacolod ferries, the cruisers Don Vicente and the Princess of Panay which was a former liner. This shipping company also had four cargo/container ships, the San Sebastian, Connie II, Aphrodite J and Athena J. The last two were local-built cargo ships.

Carlos A. Gothong Lines Inc. (CAGLI) had three liners then, the Our Lady of Fatima, Our Lady of Lourdes and the Our Lady of Guadalupe. Their overnight ships on Visayas-Mindanao routes were the Our Lady of Mt. Carmel, Dona Cristina, Don Calvino, Dona Lili, Don Benjamin and the RORO Cargo ship Our Lady of Hope, their only cargo ship. Together with Sweet Lines and Trans-Asia Shipping Lines, CAGLI was the dominant Visayas-Mindanao regional shipping company at the start of 1990.

Madrigal Shipping Corporation, a very old shipping company with pre-World War II origins was then attempting a comeback in liner shipping with the cruiser liners Madrigal Surigao and Madrigal Tacloban (but these were registered with the Cortes Shipping Company of Zamboanga which I never heard of). With the routes they were sailing they were, in effect, the partial replacement of the abandoned passenger routes of Escano Lines because they sailed the same routes. By this time, Madrigal Shipping had already shorn off their old liners, cargo ships and routes. They, however, had one big cargo ship sailing an overseas route, the Madrigal Integrity.

For brevity, I shall no longer mention all the cargo shipping companies for they are long because they are many. I will just enumerate and describe the cargo companies which were in the more advanced and more important container liner operations (as distinguished from the general cargo ships and those that were in tramper operations). Only three companies without passenger operations were into cargo-container operations at the start of 1990 – Lorenzo Shipping, Escano Lines and Solid Shipping. Among these three, it was Lorenzo Shipping Corporation which was the biggest with a cargo-container fleet that can match the biggest cargo-container shipping companies that had passenger operations. In their fleet they had the Lorcon I, Lorcon IV, Lorcon V, Lorcon VI, Lorcon IX, Lorcon XI, Lorcon XII (the former liner Sweet Grace which was converted into a container ship), Dona Anita, Euney, Dadiangas Express and Cagayan de Oro Express.

Escano Lines had in their fleet the Virgen de la Paz, Foxbat, Kiowa, La Lealtad, Greyhound, Harpoon, Squirrel, Terrier, Wolverine and two or three other freighters. However, only the first four were container liners (liners have fixed routes and schedules) while the rest were general cargo ships in tramping duties (let it be clarified they can substitute for the first four since practically speaking any general cargo ship can also carry container vans). Moreover, Escano Lines normally carry a mixed breakbulk cargo and container vans in their ships. Meanwhile, the Solid Shipping Lines only had the Solid Uno, Solid Dos and Solid Tres in their fleet. I am not sure if their Maligaya was still with them then. They were small because they were just a new shipping company then. However, one which was bigger than Solid Shipping and had container operations before, the Sea Transport Company, also did not make it to the 1980’s. They quit just before the end of the decade and sold their ships to other shipping companies.

From about two dozen passenger liner companies at the start of 1980, we just had a total of seven passenger liner companies left at the start of 1990 and the seventh was the comebacking Madrigal Shipping Company. Because of the fall in the number of shipping operators and with a fast growing population and the economy reviving, the Philippines at the start of 1990 had a severe lack of inter-island passenger ships. In the international front, there was almost no longer ocean-going ships to speak of. Aboitiz Shipping Company and Eastern Shipping Company were practically the only Philippine shipping companies still trying to do foreign routes then but their number of ships might just add to half a dozen and those were much smaller than the ships of Philippine President Lines, Galleon Shipping Company and Maritime Company of the Philippines. That was how precipitous was our drop in shipping in a span of just ten years because of the crisis decade of the 1980’s.

To think conditions in the other fronts were favorable for shipping as there were no budget airlines yet and so air fares were still high. There were also just a few intermodal buses then and there was a general dearth of bus units too. Because of such factors cited there were a lot of passengers for the ships. Maybe this is what some remember that liners then were full to to the brim and there were many well-wishers in ports during departures (and of course many fetchers too during arrivals). There were always tales of passengers being left behind because there were no more tickets left (I have seen that myself). And there were tales of overloading too, of course. The decade of the 1990’s was actually characterized by new great liners having a passenger capacity of over 2,000. Probably, that was the response to our lack of liners and liner shipping companies then.

And that is the story of our shipping in the 1980’s which was reflected at the start of 1990. In a future article, I will discuss in detail our failure in cargo shipping in the same period. Abangan!

[Image Credit: Gorio Belen and Business World]                                                                                     [Research Support: Gorio Belen]                                                                                                                   [Database Support: Jun Marquez/Mike Baylon/PSSS]