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.

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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.

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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.

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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.

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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.

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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.

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

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The FastCats That Could Be Paradigm-Changing

When the FastCats first arrived I did not know how to assess them properly. It was brand-new but truckers and buses which are charged disproportionately higher (because they say of the weight) decide on the price point and not on the newness and amenities of the ship. Actually, rebates in the form of complimentary passenger tickets (which is then sold), outright discounts and cash bonuses are stronger inducements to them. The superior speed of the FastCats might not also be decisive because that can be trumped by longer waiting hours in the ports if the departure gaps are significant. And by large on many buses and trucks it is not the decision of the drivers where to board as that is a company decision if there are company-to-company arrangements and accounts. It might only be in private cars and SUVs where the FastCats might have a better pull but then most drivers will not wait if the departure time is still two or more hours away.

The amortization weight of the FastCats also played into my mind. These medium-speed ships were all loaned from the DBP (Development Bank of the Philippines) from a JICA loan window meant to modernize our shipping. I do not know the loan terms and that part not on the top of the table but it could be in the vicinity of P3 million a month, a rough guesstimate. That would translate to about P80,000 a day (it could be less if the amortization terms are longer and it could be higher if shorter or if the if it is not a soft loan) on top of operational costs and other costs incremental to operating a ship (think fuel and parts) and a shipping company (think offices and office staff) plus the mandatory taxes, insurance and registration. Add to that the expenses and downtime of drydocking which will also be in the millions of pesos.

A Moderator of Philippine Ship Spotters Society (PSSS), our Math Professor induced me to Calapan to have a firsthand look. After observation and calculation, I immediately conceded that if the route is Batangas-Calapan with its high traffic the FastCats will be profitable since ferries sail there 24/7 except on rough weather and storms. But I had my doubts then on other routes where the traffic is not so strong. Weaning away patronage from competitors is not that easy because it is not really a free market since many trucks and buses are already locked in in contracts with some shipping companies especially those which are good in the rebate, discounting and hospitality (like free meals) game. These shipping companies generally have their ships fully or nearly-fully amortized hence their break-even point could be lower even if their fuel cost is higher .

The FastCats are catamaran ROROs but unlike what they say they were not the first to field this type of craft since the Starlite Ferry and Lite Ferry 23 came ahead of them. The FastCat are not High Speed Crafts (HSCs) because they only sail at 17 knots. Hence, their classification will fall to Medium Speed Craft or MSCs. It seems the choice of their name was meant to fool those who are not very knowledgeable of sea crafts.

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The FastCats originated from a design of Sea Transport Solutions of Australia but all were built in China by different yards. These vessels feature aluminum alloy hulls for less weight which help in boost speed, lower fuel consumption and in resisting corrosion. A catamaran design means less drag but it can also be wicked in cross-swells. The FastCats do not carry their own ramp thus saving more weight and instead there is a hydraulically-activated ramp in the port which connects to the ship. The disadvantage however is they need a dedicated docking area because the ramp-in-the-port precludes the use of others of that space and so applying for a port are sometimes complicated by this requirement. The ramp can also be damaged by storm waves as shown by what happened in Calapan port.

The dimensions of the FastCat are 50.6 meters in length over-all, 47.2 meters in length between perpendiculars, 17.8 meters in breadth and 4.2 meters in depth. Originally the ship has 683 to 704 gross tons when these left China but with the added passenger deck for the Economy class on the bridge level (they call the bridge the “wheelhouse”) the gross tonnage rose and in the case of FastCat M6 it Is already 967 gross tons. The gross tonnage of the others would then not be far from that. The original net tonnage was 207 to 212 but definitely it is now far higher than that because of the additional Economy section. Generally, the declared DWT is 300 tons.

The passenger capacity of the vessel is between 275 to 290 divided into Tourist and Economy. The Tourist has cool airconditioning and airline-type seats with enough leg space and it is located on the deck below the Economy. The ship’s canteen which reminds one of a convenience store is also located there and its offerings are much better than the basic, short-distance ferry-ROROs around. The passenger service is much better too in all aspects. It seems the service personnel were recruited from Hotel and Restaurant Management course grads instead of the plain able-bodied seamen of competitions’. The passenger accommodations are located in only one side of the ship making for an unbalanced look. The bridge is located at the middle of the ship above the car deck.

The first FastCats are powered by 4 Cummins engines with a total of 2,600 horsepower while the latter ones are powered by Cummins clones built in China with the same power output. From a report I got the FastCats have 4 screws which means they are not using synchronizers. That means less weight, less complication, less power lost and there is no possibility of an unbalanced and difficult run if ever one engine loses power (as they will just shut down another engine on the opposite bank). The bridge of the FastCats are also modern like that of a High Speed Craft (not the ones from Malaysia) and for me the most notable feature is it produces its own power and is not dependent on the power supplied by the engine room (and that is a lot of safety margin).

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The FastCats were built by different companies in different yards in China. They total ten but the owner of Archipelago Philippine Ferries Corporation recently announced they will order more and will apply for routes in our neighboring countries and on additional routes in the country. The ship series was originally intended to be named “FastCat M1” to “FastCat M10” but heeding the Chinese aversion to the number “4” there is no “FastCat M4” and instead there is a “FastCat M11”. The first one in the series of sister ships arrived in 2013 and the last one arrived in 2016.

Analyzing the FastCats and comparing it to other ROROs of the same length what I noticed is the 17.8 meters breadth of the FastCats means an extra RORO lane. At 2,600 horsepower the FastCats do not use a bigger engine than many ROROs of the same length. That means the extra speed comes not in overpowering these catamaran ROROs. It was instead coming from the less weight due to the aluminum alloy hull, the less drag of the catamaran design and the minimalist superstructure. The last one might be the key along with the use of aluminum. The old-style ROROs really have a lot of steel being carried around. That will tell on fuel consumption and it will weigh down the speed. That is the reason why most ROROs in the 50-meter class with about the same or a slightly higher power output runs at only 13-14 knots. And for sure with the higher vessel weight and conventional hull design plus the age they consume much more fuel than the FastCats.

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And that is the reason why the FastCats can, at the start, match the fares and rolling rates of the competing ROROs although they are carrying a much higher amortization rate. Anyway they cannot charge significantly higher because the better amenities and passenger service will only primarily attract the private vehicle owners driving sedans and SUVs.

However, total revenues of any transport will primarily depend on the kilometers or nautical miles run. That is true for airplanes, that is true for the buses and that is also true for ships. That is one of the reasons why budget airplanes are successful now because they practically fly round-the clock with just a few hours of lay-over and to be able to do that they use double crewing. That is also the reason why Philtranco loves the Manila-Davao run because night and day the bus runs and the more kilometers and hours it run the more is its revenues.

And that brings to the tactic that Archipelago Philippine Ferries is and will be using to have enough revenue in routes not as strong as Batangas-Calapan — they will run the opposition to the ground by running the FastCats with as many trips as possible in a day like in the 44-nautical mile Dumaguete-Dapitan route where they now have 3 round trips in a day (there is no guarantee, however, that this will not change). Somehow, something has to give way and since they are running they will be able to gain load and passengers. There is really no reason for them to wait for the next ferry unless they are contracted to it as they are not faster. Everybody loves time saved as long as the rates are about the same.

FastCats can do that many trips a day because they are faster. That is the same line of reasoning why regional container ships normally sail now at 20 knots, the same speed as our SuperFerries that became saints of 2GO. With such speed they can make more voyages in a year and that means more revenues. Or put it another way the shipping operator can make the same revenue with less number of ships. Neat, huh?

Faster time is also a come-on on ferries that have close time departures. If there is a FastCat that is promising a 2.5hr sailing time in a route then dumb is the passenger of private car owner which will opt for a 4-hour sailing. Well maybe if he is related to the owner or the Captain then it is forgivable. That is the reason why then I do not take the slow Maharlika II in the Liloan-Lipata route since Super Shuttle Ferry 18 will overtake it even if it left later and I have the benefit of a ship with better accommodations. But in shorter routes the sailing time difference will be not that much great and the come-on of greater speed will be less. The time consumed waiting in the port will be the more decisive factor then.

That is why the FastCat is dangerous for the old-style ferries and even to new Starlite Ferries. Speed is their ace. I have heard that even in the Batangas-Calapan route some now opt for the FastCat rather than the SuperCat because at 17 knots versus 22 knots the travel time difference in the 24nm route is not that great and yet there is a significant difference in fare as in almost double while their facilities are just about the same. So even the High Speed Crafts which gulp a lot of fuel and do not carry any significant volume of cargo is threatened by them.

A view of some of the old-style ferries of the competition or possible competition, same size class and engine size:

King Frederick 56.8 m x 14.0m, 2400hp, 13.5 knots when new

Nelvin Jules 56.8 m x 14.0m, 2400hp, 13.5 knots when new

Maria Zenaida 54.0m x 11.4m, 2400hp, 12.5 knots when new

Reina Genoveva 59.9m x 11.0m, 2600hp, 14 knots when new

Reina Hosanna 59.9m x 11.0m, 2600hp, 14 knots when new

Super Shuttle Ferry 12 53.0m x 10.4m, 2700hp, 14 knots when new

Lite Ferry 15 60.3m x 11.4m, 2600hp, 14 knots when new

Starlite Navigator 57.3m x 13.5m, 2400hp, 14 knots when new

Lite Ferry 1 48.7m x 11.0m, 2000hp, 13.5 knots when new

Lite Ferry 7 50.8m x 10.8m, 2000hp, 14 knots when new

Maria Helena 49.0m x 12.2m, 2000hp, 14 knots when new

Maria Rebecca 49.9m x 13.2m, 2000hp, 13.5 knots when new

Hansel Jobett 51.1m x 14.0m, 2000hp, 13.5 knots when new

Star Ferry III 46.4m x 11.5m, 2000hp, 13.5 knots when new

Those ferries are already 1.5 knots down, on the average, from their speed when new. And those 2,000hp ferries will be using more fuel now per nautical mile than the 2600-horsepower FastCats. Even when new it is not sure they were consuming less fuel because of their higher weight and drag. Those 2,600-horsepower ferries will be definitely consuming much more fuel now than the FastCats.

Note also the difference in the breadth which translates to lane-meters of rolling cargo. Those ferry sampling have on the average a greater passenger capacity than the FastCats especially since all except one have two passenger decks. But on ROROs the rolling cargo earn a disproportionate share of the revenues compared to passengers and FastCats have one or two more lanes for vehicles compared to that sampling. And if the passenger capacity of the FastCats will prove lacking then another passenger compartment can be added to the vacant side of the vessel. So sometimes it is said that the FastCats are not full but their rolling cargo load might already “full” if compared to the load of that sampling which has a narrower and smaller vehicle deck than the FastCats.

There are short-distance ferry-ROROs that are in the 60-meter class that can run at 14-14.5 knots true speed if they want but on the average these feature engines that are on the average are bigger as in nearly 1,000 horsepower more. The fuel consumption difference compared to the FastCats will even be greater and actually they might be one truck longer than the FastCats but still the rolling cargo capacity of the FastCats are bigger. A sampling:

Maria Felisa 57.4m x 13.0m, 3600hp, 15.5 knots when new

Maria Vanessa 57.4m x 13.0m, 3600hp, 15.5 knots when new

Maria Oliva 64.3m x 13.5m, 3200hp, 16 knots when new

Maria Ursula 61.4m x 14.0m, 3400hp, 16 knots when new

Reina de los Angeles 60.9m x 12.8m, 3600hp, 16 knots when new

Anthon Raphael 61.4m x 14.0m, 3400hp, 15.5 knots when new

For sure this set consumes a lot more fuel than the FastCats and there is still a 2.5-3-knot disadvantage.

The only one in this size which will not be too a laggard compared to the FastCats is the Jack Daniel of the Sta. Clara Shipping Corporation. She is 65.0m x 14.0m and sailed at 17 knots when new but her engine has 4,300 horsepower already, well over the 2,600 horsepower of the FastCats. Maybe the aluminum hull and the catamaran design did a lot of magic to keep the FastCats separated from the pack.

Which brings us to the new Starlite ferries. These are 66.8-67m x 15.3m ferries and that means a car deck capacity nearly equal to the FastCats. These definitely has more passenger capacity at 750 persons but as I have said if a new passenger compartment will be built on the other side of the FastCats the current passenger capacity of 300 of the FastCats will nearly double to 600 which will not be much behind than the new Starlite ferries. These new Starlite ferries have a speed of 14.5 knots and 3,650 horsepower are needed to produce that speed. So for a possible equality in passenger and rolling cargo capacity the new Starlite ferries are using more fuel for even less speed. Now I begin to understand why there are a lot of catamaran ROROs in other countries with aluminum hulls. They are simply more efficient. And these are the aces of the FastCats.

fastcat-canteen

If all can run 100 to 150 nautical miles average in a day (that is about the back-and-forth run of the Cebu ferries to Ormoc) then they might be able to amortize their fleet, my guess. In Batangas-Calapan they have no problem with that quota. In Cebu-Ormoc, the Oceanjets and SuperCats do over 200 nautical miles in a day, to think and they are profitable (with maybe a 2/3 load) even though they guzzle a lot of fuel. That will take a lot of wrestling customers away from other shipping companies. Well things do not happen in a vacuum. With amortized ships the others could choose to lower the fares and the rates (now that will be good for the the riding public and shippers; after all rolling and cargo rates in the Philippines is really high).

But then I don’t place too much emphasis on that now. If the amortization is only P80,000 a day, if a FastCat runs 8 trips in a day that will be only P10,000 per trip and if that is Batangas-Calapan that will just mean taking out the revenues from two trucks! And it might just be one truck in longer routes! Above and beyond the operational costs like fuel, labor, etc. Dangerous, dangerous! For the competition, that is. That also shows how high our rolling rates are (as I always asked since when did MARINA learn how to properly compute rolling and container rates?)

However, in the Liloan-Lipata route I heard a disquieting report. One FastCat has left and the remaining one also cheats now on the schedule as in they compact the schedules if there is not enough load (well, useless to run and run if the load cannot justify it). The reason is the Cargo RORO LCTs there are suctioning the trucks like vacuum. That is also a phenomenon noted in the various Cebu-Leyte routes and even in the various Cebu-Bohol routes. Cargo RORO LCTs can offer rates as low as half of the conventional ROROs and for trucks that is a decisive come-on. And that is the reason why and Cargo RORO LCTs seem to be also a new paradigm change.

And besides many commercial vehicles (trucks, buses and panel trucks like those of LBC, etc.) are already locked in through company-to-company arrangements and through the use of super special rates and special rates plus other inducements. As I said it it not really a free market and the only ones that actually pay the published rates are the newcomers and the seldom travelers. The published rates are actually artificially high so as to cover all the discounts that the RORO ferry companies are giving to their regulars. This is actually a sucker’s world but the newbies do not realize that.

Which of the two paradigm changes will prevail? And will the old RORO ferry companies hold on through the locking game? Well, only the future can tell (how can we guess all their moves, counter-moves, guts and instincts?). But I love paradigm changes. With those things begin to get interesting.

fastcat-docked

Photo Credits: Carl Jakosalem, Nowell Alcancia, Mike Baylo, PSSS