Is There Enough Cargo To Move Around?

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

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An aggregates carrier LCT off Taganito, Surigao

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

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Row of newly-arrived LCTs in north Mactan Channel

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

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

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

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

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A Cargo-RORO LCT

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

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

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A deck loading ship

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

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A RORO Cargo ship

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

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

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Asian Shipping Corporation LCTs in their Mandaue port

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

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

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

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

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

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

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

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

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In the Philippines, No-Name, Shoddy Ferries Have a Better Safety Record Than Internationally-Certificated Ferries

A candidate for Ripley’s “Believe It or Not”? That’s true and so better read on.

Yesterday, it was in the news that Christopher Pastrana, The Boastful is hosting the 41st Interferry Conference that will be held in Manila starting today, October 15. There will be many sponsors for that and it is usually attended by shipping owners, shipbuilders, marine engine makers, various suppliers and other entities connected to shipping to exchange notes and learn about the latest trends and products. By the way, Interferry is not the sole organizer of maritime conferences.

A news item said the FastCats of Pastrana can provide safe ferries as do the ferries of Starlite and the implication is because those are new. Well, not so fast as it is not just the newness of the ship that is a factor in safety. May I remind too that Pastrana lost the Maharlika Dos to capsizing and sinking near Panaon island in 2014 after its engines failed and his Maharlika Cuatro, though just nearby, did not come to its rescue. And Starlite Voyager grounded and reached BER status when it was on the way to a shipyard in 2011. Are they blaming now the oldness of their vessels that sank?

I was angry when Maharlika Dos capsized and sank in 2014 because Pastrana broke the 35-year record of Bicol steel-hulled ferries not sinking while sailing ever since the RORO Cardinal Ferry 2 of Cardinal Shipping came in 1979. The Northern Samar sank in 2006 in a storm but she was not sailing and was just moored in Tabaco port. This perfect record extends to Surigao Strait because no steel-hulled ferries ever sank there since Cardinal Ferry 2 came in 1980, a record that Maharlika Dos broke infamously.

And to think the eastern seaboard short-distance ferry routes are home to the some of the most shoddy ROROs in Philippine waters led by the Maharlika ships of Christopher Pastrana and the Millennium Uno of Millennium Shipping. Well, the ships of Bicolandia Shipping then were also not topnotch and are old. But no matter what these ferries don’t sink even though the eastern seaboard straits are among the most dangerous in the country. As I have said in an earlier article it is seamanship that carried them through. The seamen there would not let their ships sink because they know that among their passengers might be their kins, their friends, their school mates or somebody known to them. But Maharlika Cuatro‘s captain didn’t know that and so he let Maharlika Dos wallow in the ever-strengthening swells until it capsized. And now since he got new FastCats, Pastrana always boasts now about safety and misses no chance to deride the “lack of safety” of his rivals. What gall!

Before Pastrana or even Cusi of Starlite Ferries, another boastful owner, gets carried away let me state that going by the records and empirically there are a lot of ferry companies which are their rivals which have a perfect safety record, i.e. they did not lose ships to sinking. In Bicol, Sta. Clara Shipping, Penafrancia Shipping, Regina Shipping Lines and 168 Shipping Lines have never lost a ferry of theirs. That goes true to the defunct ferry companies that served Bicol like Cardinal Shipping, Newport Shipping, Badjao Navigation and the short-serving Luzvimin Ferry Services. Well, even Denica Lines have not lost a steel-hulled ferry so far.

Going to Quezon, the safety record of the decrepit-looking ships of Kalayaan Shipping have a perfect safety record as do the defunct Sta. Cruz Shipping. Alabat Shipping also has a perfect safety record as do Phil-Nippon Kyoei when they were still existing. Noting these ferry companies, I purposely omitted those that have short service records like Starhorse Shipping.

In Western Visayas, Milagrosa-J Shipping and Tri-Star Megalink both have perfect safety records even though Milagrosa-J Shipping regularly crosses the Sulu Sea which has rough seas and strong winds many months of the year. And to think their sea crafts are small and are already old. It is really in the seamanship.

Batangas shipping companies have no great safety record especially Besta Shipping. But I would like to point out that for a ferry company which has a fleet of over 30, Montenegro Shipping Lines lost only one ferry in 20 years even though they can be found almost anywhere in the Philippines including those that have rough seas. They only lost the Maria Carmela when somebody threw a cigarette butt into a copra truck and thereby igniting a conflagration which was rather unfortunate. And Montenegro Lines have some of the oldest ships hereabouts.

Zamboanga is home to some of ferries that will not look so clean internally and many are also old. But two sailing companies there, Ever Lines and Magnolia Shipping, probably the Number 2 and Number 3 there have perfect safety records as they have not lost a ship even in their freighters. And Sulu, Tawi-tawi and Celebes Sea have strong seas when there is a storm somewhere in eastern Philippines or when the monsoons are blowing hard. Minor shipping companies of Zamboanga like Sing Shipping and Ibnerizam Shipping also have perfect records. The defunct Basilan Lines/Basilan Shipping of the Alanos also did not lose a ship although their Dona Ramona was bombed in Lamitan City.

Mae Wess of Davao has not also lost a ship as do the KSJ Shipping of Surigao. And as far as I know, the currently operating ferry companies of Camiguin – Philstone Shipping, Davemyr Shipping, and Hijos de Juan Corrales have not lost a ship too and it seems that also goes true for the defunct P.N. Roa and and Jade Sea Express. In Panguil Bay, Daima Shipping has not also lost a ship even though their Our Lady of Mediatrix was burned because of the firebombing of two Super 5 buses aboard her in 2000.

In Cebu, for all the size of their fleet Lite Ferries may not lost a vessel (was the Sta. Lucia de Bohol lost at sea?). FJP Lines/Palacio Shipping, defunct now, also has a perfect safety record. There are other defunct shipping companies of Cebu which has not lost a ship through accident and that includes VG Shipping, Roly Shipping/Godspeed, Kinswell Shipping, Jadestar Shipping, Goldenbridge Shipping, Maayo Shipping, Cuadro Alas Navigation, PAR Transport plus many smaller ferry companies. In the recent era, Gabisan Shipping are known for safety and the ability to “read” the waves and have not yet lost one.

If I go by routes, there was not a ferry lost in Roxas-Caticlan and Dapitan-Dumaguete even though their seas can sometimes be rough. No steel-hulled ferry was ever lost in any route in Bicol too except for the Blue Water Princess 2 which is a Quezon ferry going to Masbate and the Rosalia 2, a Cebu craft going to Cataingan, Masbate. There are many, many other routes in the country which has not seen a ship sink even though they are not using a new ship. It is all in the seamanship really. To say a new ships is “safer” is just like claiming a new car will not be involved in a collision.

Some of our HSC companies too are very safe. Oceanjet, the Number 1 now in HSCs, has not lost a ship ever and they did not always use new crafts. Weesam Express also has a perfect record. Even the defunct Bullet Express, the fastcrafts of the Viva Shipping Lines combine and the fastcrafts of A. Sakaluran have perfect safety records. The are a lot of other HSC companies which had perfect records but their service record was short like Star Crafts. Not included here is SuperCat which has lost one.

And which brings me to our liners which in the recent years are internationally-certificated, have P&I insurance and are mostly spic-and-span but unfortunately have a bad safety record. In the last 20 years, WG&A/CFC lost SuperFerry 3, SuperFerry 6 and SuperFerry 7, all to fire and Dona Virginia and Our Lady of Banneux due to grounding. Aboitiz Transport System (ATS) also lost the SuperFerry 14 to a terrorist act and the St. Gregory The Great to grounding. Sulpicio Lines lost the Princess of the Stars and Princess of the Orient to capsizing and lost the Princess of the World, Philippine Princess and the Iloilo Princess to fire and the Princess of the Pacific to grounding. Negros Navigation also lost the St. Francis of Assisi to fire.

Between the end of the World War II and 1995 I know of 75 (that is seventy-five) liners which were lost and mainly at sea. That is 75 in only 30 years! Can anybody believe that? So how can I be impressed by liners and international certificates in safety? Or in their being spic and span? The records say otherwise. And believe me I can easily name the 75 as I have my own database about maritime hull losses. This 75 does not even include regional ships like the Boholana Princess which was an overnight ship when she was lost.

The Don Juan and Cebu City were brand-new ships when they were fielded in the Philippines. But they sank in collisions at night. So Pastrana and Cusi be better warned by their boastfulness of their new ships. They better be more humble before shipping companies which have not ever lost a ship.

Newness of a ship is not a guarantee of anything except in shininess.

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Photo credit: Masahiro Homma

The Ocean Fast Ferries or Oceanjet

Many except for those from the Central Visayas do not know that Ocean Fast Ferries, more commonly known as Oceanjet is already the Philippines’ largest operator of High Speed Crafts or HSCs. This is especially true in Luzon which has only been recently exposed to the Oceanjets when they invaded Batangas. Therefore, many think the old king SuperCat is still reigning because the ads and glitz are still around and they still have the best booking service and so foreigners and tourists easily find them online. Being connected to 2GO doesn’t hurt them either.

Oceanjet actually did not start very late as some might surmise. They only came a little later than Bullet Express and SuperCat and almost about the same time as Waterjet and the Sea Angels of Negros Navigation. They were even a little ahead of SRN Fastcraft (which is more popularly known as Weesam Express) which started in Zamboanga and the SeaCats of ACG Express Liner. All of those mentioned actually came only in the mid-1990’s. The Montenegro Shipping Lines fastcrafts came significantly later than them and still much later did Star Crafts and Lite Ferries started operating High Speed Crafts.

Ocean Fast Ferries did not start with a bang. Neither did they expand very fast. They were actually on the conservative side. The other HSC operators were overly ambitious and they paid for that mistake. Some coalesced, some were driven out of business. Because of the fast expansion of the High Speed Craft sector, there came an instant overcapacity. Filipinos are still poor and so price or fare is a big decision point for them. Most are not willing to pay fares of the HSCs which were in general double the fare of the ordinary ferry. The reason for this is HSCs gobble a lot of fuel because they have oversized engines plus they don’t carry a significant amount of cargo.

Since Oceanjet did not expand fast in the early days of the High Speed Crafts, they were able to avoid the mistakes of their competitors. They only started expanding in 2001 when the dust of competition in the HSC sector already started to settle. The Ocean Fast Ferries expansion seem to come in batches. In 2001 to 2003, their brand-new Oceanjet 3, Oceanjet 5 and Oceanjet 6 which were all sister ships started arriving from Cheoy Lee of Hongkong. These were the first brand-new HSCs for Ocean Fast Ferries as the Oceanjet 1 and Oceanjet 2 which they acquired in 1996 were just bought second-hand from Japan.

These trio of sister ships brought success and recognition for Ocean Fast Ferries. They were not that fast (as in sub-30 knots while the SuperCats and Weesam Express fastcrafts were capable of speeds over 30 knots) but they were big and high. It seems these trio started a design template for Ocean Fast Ferries. Moreover, the trio also started the engine combination favored by Oceanjet which is a pair of Cummins engines with each developing 1,800 horsepower and a total of 3,600 horsepower for a speed of less than 30 knots. While not that that fast the engine combination saved fuel, the parts are easy to source (Cummins has a depot in Cebu), engineers are familiar with it and Cummins is a good engine make.

Oceanjet was also not fond of waterjets for propulsion and instead relied on the trusty propeller unlike some of their competitors. Waterjets are also more maintenance-intensive and it can foul in the dirty waters of our ports especially in Cebu and that can send schedules awry. They tend to consume more fuel too. Of course in speed they are matchless. The speed where waterjets become inefficient comes much later than that of a propeller.

It took seven years before Ocean Fast Ferries acquired another High Speed Craft. In 2010, they purchased the Oceanjet 7, an old but gold Westermoen catamaran. This was the first cat of the company and it was an antithetical acquisition. Maybe they were attracted by the solid and high reputation of a Westermoen. Maybe it was the price. Or a combination or both. I really don’t know. Suffice to say this cat proved its value to them and is still reliable.

One big supplier of High Speed Crafts in the world especially aluminum-hulled ones is Australia. It came naturally for them as they are a boating country and they were once the king of aluminium. However, in this decade Australia stopped production of High Speed Crafts because with their high labor cost and the strengthening of their currency they were no longer competitive. So what they did is they were just selling HSCs in kits to be assembled by the buyer.

One of those that took advantage of this was Ocean Fast Ferries. In Mandaue, Cebu, in their own reclaimed land they put up a related company to assemble HSC kits. This was the Golden Dragon Shipyard. In finishing they just drag the near-completed ships using rubber bellows to their shipyard in Labogon where repair works and drydocking is done to the vessels of their other shipping companies. The launching and completion of the new Oceanjets are just done in Labogon shipyard.

Out of this process came the sister ships Oceanjet 8, Oceanjet 88, Oceanjet 888 and Oceanjet 168 from 2011 to 2015. Australian engineers came to assist in the assembly of the first kit-built Oceanjet but this took the longest to be built because of their unfamiliarity (well, the first is always the hardest). These were also high fastcrafts and maybe that helped Oceanjet because there are many passengers who are not comfortable with low-lying crafts. That seems to be one disadvantage of the fleet of Weesam Express. Many passengers get the chills when they see water spray in their craft’s windows.

These four followed the same engine template favored by Ocean Fast Ferries which is 2 x 1,800 horsepower Cummins engines. Again, the speed is not that much at sub-30 knots. But Ocean Fast Ferries guessed well. Nobody was still running at over 30 knots when fuel prices really got high. While it is already lower right now still nobody runs at over 30 knots because their engines are already old. They either can’t do it anymore or they are already preserving the engines.

And that comes round to one of the strengths of Ocean Fast Ferries – they really have the financial muscle to buy new engines and they can afford to re-engine their old High Speed Crafts, an endeavor that their main competitors SuperCat and Weesam Express can no longer do because of weak financials. So Ocean Fast Ferries started being the laggard but now their HSCs are already faster than their competition with its old engines. What a reversal! It is only Weesam Express which try to give them a fight in the speed department and this might be more out of pride and not of technicals.

While acquiring these four HSCs built-from-kits, Ocean Fast Ferries also acquired High Speed Crafts offered to them by competition which quit the HSC field. In 2013, they acquired the Paras Sea Cat which already stopped operations. This was originally a Misamis Oriental-built Medium Speed Craft (MSC) capable only of 17 knots with its hand-me-down Caterpillar engines from SuperCat  and a heavier hull that was not aluminum. As Oceanjet 9, she was recently re-engined and she is now capable of 26 knots and so qualifying her as a true High Speed Craft. Incidentally, her hull design was copied from SuperCat 26 (St. Emmanuel) making them sister ships but Oceanjet will outrun her sister this time.

In 2015, Lite Shipping decided High Speed Crafts is not their cup of tea. So they sold their High Speed Crafts – the Lite Jet 1, Lite Jet 8 and Lite Jet 9 to Ocean Fast Ferries. These became the Oceanjet 11, Oceanjet 10 and Oceanjet 12, respectively. They were re-engined one by one especially the latter whose engines were not that strong after stints in Hongkong and Vietnam. They all can do 25 knots now or better. Golden Dragon Shipyard made alterations to their superstructure including on Oceanjet 9. I do not know but maybe they want a better feng shui.

Very recently, this 2016, the Oceanjet 15 arrived for them from Japan. This is to be used on their new Tuburan-Estancia route. With a growing fleet, the route system of Ocean Fast Ferries is expanding along with the frequencies. They are doing well and giving all that SuperCat can handle in the premier-for-HSCs Batangas-Calapan route along with the Bacolod-Iloilo, Cebu-Tagbilaran and Cebu-Ormoc routes. Their route system also includes Tagbilaran-Dumaguete and Dumaguete-Siquijor plus a Cebu-Tubigon route that they inherited from Lite Ferries. Recently they also opened a Cebu-Camotes route, a successor of their Goldenbridge route where once the Golden Express MSCs were sailing.

So as of today (June 2016), Ocean Fast Ferries has a total of 15 High Speed Crafts and all of those have good engines. One will almost never hear of an Oceanjet HSC having trouble while at sea. That is more than double the six or seven HSCs still sailing for SuperCat and even if the Weesam Express fleet of seven is added to that the Oceanjet fleet will still be bigger. Yes, Ocean Fast Ferries is beginning to be dominant in the HSC sector.

What is their secret? Many one cannot connect that the owning Lua family of Ocean Fast Ferries is simply loaded that they need not take any profits from the operation of Oceanjet and they can simply reinvest all profits. They also don’t have any stockholders to please and so they can take the long-term view. Their main moneymaker is actually the Nature Spring mineral water, the #1 bottle water brand in the Philippines. They have a big reclaimed land in Labogon in the Cansaga Bay of Cebu where the Golden Dragon Shipyard is located. This also hosts there Goldenbridge Shipping which they also own, one of the pioneers in the fast-gaining RORO Cargo LCT sector. That company also carries their bottled water. Part of Goldenbridge was the old Golden Express MSCs that were once Bullet Express HSCs (they were able to purchase the remains of that company after it quit operation).

They are also not new in shipping. Before Oceanjet and Goldenbridge they were already in cargo shipping using trampers. The Lua family owned Unilink Shipping Corporation and Unified Global Shipping Corporation aside from the earlier Socor Shipping Corporation, the forerunner of Goldenbridge Shipping Corporation. In these shipping corporations the Lua family has an additional 15 ships, more or less, and that includes some true cement carriers. The Lua family is big in the construction and hardware industry of Cebu and it seems they are also in trading including cement trading. That is the financial muscle of this group most people are not aware of.

SuperCat is trying to close the gap with them by ordering two new High Speed Crafts from Austal Philippines in Balamban, Cebu. But I wonder if that will be enough. For some time to come I see Oceanjet reigning in the HSC field in the Philippines.

Maybe it’s time for them to make some noise?