2GO Travel Has Stopped Its Manila-Davao Route

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

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St. Leo The Great by Mike Baylon and PSSS

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

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

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

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

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

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

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

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

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

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

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

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

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

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