Container Ships Also Sink Our Liners

In the past, before 1980, there was no conflict between the our liners and the container ships. First, container ships did not exist before the late 1970’s. Second, before that time, general cargo ships were not many as it is our liners that were mainly carrying the inter-island cargo that should be transported fast and were not in bulk. That was the reason why even though our production and the number of people were not yet as high like today, there were so many liners existing with as high as 90 liners at its very peak.

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Gorio Belen research in the National Library

In the early 1970’s, the Sea Transport Company came into existence. What was notable for this new company is they offered regular express cargo service to Mindanao which means a direct service and aside from loose cargo, their ships were able to carry small container vans which were non-standard as in they were offering 8-foot containers which they themselves designed (it was rectangular in shape). In due time, they also shifted to standard container vans and they fielded pure container carriers.

In 1976, Aboitiz Shipping Corporation converted one of their general cargo ships, the P. Aboitiz into a container carrier. Conversion like this was not difficult because only some internal structures need to be modified so a container van can be slot in and that also means modifying the holds and the hatches. The grabs of the booms also have to be modified by a bit so it can handle a container van.

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Gorio Belen research in the National Library

In 1978, containerization was already in full swing when Aboitiz Shipping Corporation added more container ships and William Lines Incorporated followed suit. The next year, in 1979, Sulpicio Lines Incorporated also joined the bandwagon to be followed in the next year by Lorenzo Shipping Corporation which had already split from its merger with Carlos A. Gothong Lines Inc (CAGLI). Negros Navigation Company also joined this new paradigm in 1980. In 1981, Sweet Lines Incorporated also followed suit but they used their old company name Central Shipping Corporation. Among the major liner companies then, it was only Compania Maritima which did not join this new paradigm.

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Gorio Belen research in the National Library

These new container services offered direct sailings as in there were no intermediate ports. With direct service, the container ships might be a little slower than the liners (except for the fast cruisers) but their transit times were not worse than the liners (except to Cebu) because they don’t lose time in an intermediate port or ports. With the speed, convenience, security (no pilferage), lack of damage and contamination, soon the shippers were already shifting en masse to the new container services.

In the liner crisis of 1980 when many liners were deactivated and laid up, it seems the main cause of that was the emergence and immediate success of the container ships and container shipping. Maybe the liners suddenly found they don’t have enough cargo and hence they can’t maintain the old sailing schedule and from the outside it looked like that suddenly there was a “surplus” of bottoms (actually the liners complained of that).

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Gorio Belen research in the National Library

In December 1979, the first RORO liner, the Dona Virginia of William Lines came. This RORO and those that came after her were capable of carrying container vans especially the XEU or 10-foot container vans that can be loaded aboard by the big forklifts. Soon even the fast cruiser liners were also carrying container vans atop their cargo holds especially at the bow of the ship. Some can also carry container vans on a platform in the stern.

Locally, I did not see a new paradigm take hold as fast as container shipping. The ROROs even took longer to be the new paradigm. In containerization, there was even a rush to convert general cargo ships into container ships. All the “new” container ship of Lorenzo Shipping Corporation were converts at the start. The other container shipping companies bought general cargo ships from Japan and converted them into container carriers. Our first container ships looked like general cargo ship unlike the modern container ship which does not look like general cargo ships (and nor can they handle loose cargo).

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In just a little over a year William Lines had 5 container ships (Gorio Belen research in the National Library)

The emergence of the RORO liners even pushed containerization faster as that new kind of ferry is ready-made not only for vehicles or rolling cargo but also for container vans, wheeled in atop chassis (which means atop trailers) or not (if not wheeled then big forklifts “wheeled” them in). There were not yet reach stackers in the early years of our containerization to handle the container vans.

In the 1980’s and the 1990’s, the liners can still hold off the container ships. The reason was there were no budget airlines yet (Philippine Airlines fares then were really stiff) and there were no intermodal buses yet in the bulk of the islands (it was only strong in Eastern Visayas, their pioneer area). And liners can still pack in the passengers (even up to “overloading” or overbooking point) because people has already learned how to travel and there was a great push for migration to Metro Manila (which later led to the overcrowding of this metropolis).

However, when budget airlines and the intermodal buses came in droves, the passengers of the liners dropped. The 2,000 to 3,000 passenger capacity slowly became “too big” and hence the national shipping companies no longer fielded liners with capacities such as this in the new millennium. Aboitiz Transport System (ATS) also tried to reduce passenger capacity and increase cargo capacity by converting some of their liners to have two decks for rolling cargo like what they did in SuperFerry 12, SuperFerry 9 and SuperFerry 2.

Superferry 12

Photo by Edison Sy

Can the liners compete with container ships when the passenger demand dipped? The answer is a plain “No way”. Liners usually have more than three times the horsepower of a local container ship (and it is single-engined which means less spare parts are needed) and yet the local container ship usually have three times the container capacity of a RORO liner. This even became more pronounced when the regime of high oil prices came in the first decade of this millennium. Per fuel prices alone, the container ships can carry each container van much cheaper than what a liner can.

Container vans also do not need the amenities needed by the passengers. Moreover, it does not need the service expected of the passengers which need to be fed and be given more than decent accommodations plus some entertainment. Because of that, the crewing needs of a liner is far higher than that of a container ship. All of those means more expense of the part of the liner company. Besides, a RORO liner is more expensive than a container ship for the same size and its insurance is higher.

Ever since the 1980’s, even when the passenger demand was still great, the national shipping companies were earning more from cargo than their passengers. That is true even today when 2GO admits that almost 70% of their revenues are from cargo (and to think under their roof is SuperCat which widens the passenger revenues). Definitely their investment for liners is greater than their cargo ships. Maybe it was only loyalty to their passengers and passenger shipping why they were not quitting this segment. Maybe it is also because of inertia which means just keeping doing the old things.

Lorcon Dumaguete assisted by tugs

If we look at the recent years we can see that for every liner acquired at least 7 container ships were acquired and this is even a conservative estimate. If we look at the last 10 years starting from 2006, only 11 liners came to our shores and that includes the 3 Cebu Ferries, two of which are still used as overnight ships although already converted into small liners. Meanwhile, MARINA registered 80 or more newly-arrived container ships in the same period. These are the container ships of Oceanic Container Lines, Sulpicio Lines/Philippine Span Asia Carrier Corporation, Lorenzo Shipping Corporation, NMC Container Lines, Solid Shipping Lines, Negros Navigation/Caprotec Corporation/2GO, MCC Transport Philippines (MCCTP), Moreta Shipping Lines, Meridian Cargo Forwarders, Seaview Cargo Shipping Corporation, Escano Lines/Loadstar Shipping Company and West Ocean Lines and Transport acquired in the last ten years. Now how many container lines is that compared to a sole passenger liner company?

There are few liners sailing now and all are under just one company which is 2GO (since Romblon Shipping Lines has already quit). Meanwhile, container ships are still mushrooming and more container shipping companies are joining the field. Even 20 years ago there were already more container ships than liners. Now the container ships are already outstripping the liners in number. And the trend holds true year after year.

The question is why? Well, the simple answer is the shipping companies won’t invest in liners as it does not make sense. More revenues can be earned from container shipping at less investment with less hassles from regulations and supply needs (like the food needed by the passengers). So why would they enter passenger liner shipping? Better “pets” like containers vans rather than people like the passengers who can raise a ruckus and if the ship sinks then goodbye to all the advertising and service spent for the goodwill. If a cargo ship sinks, the uneducated public and the media almost won’t mind at all.

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A Cargo RORO LCT by Asian Shipping Corporation

If cargo is the bread and butter of shipping it will now go to the container lines because they can actually offer the lower shipping rates. If not it will go to the intermodal trucks which has even lower rates. And arriving now recently are the Cargo RORO LCTs which carry container vans (even from Manila) like those of Roble Shipping Incorporated, Ocean Transport and Asian Shipping Corporation. This new paradigm can offer even lower rates than the container ships.

Sometimes it looks like liners are already passe. But I don’t want them to go because I prefer them over planes and the intermodal buses are sometimes too tiring especially those who are no longer young.

Will the liners survive? Now, that is one question I would not like to answer.

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The Merged Carlos A. Gothong Lines Inc. and Lorenzo Shipping Corporation Was Still a Great Shipping Combine Before Their Break-up in 1979

In 1972, the first great break-up in Philippine liner shipping after World War II happened. The then No. 1 shipping company in the Philippines, Carlos A. Go Thong & Co. broke when its general manager Sulpicio Go decided to go it all alone. The old company then just exceeded the old No.1, the Compania Maritima which was already in a death spiral but nobody realized it then considering that as late as 1968 and 1970 Compania Maritima still purchased great liners with the one purchased in 1968 a brand-new one from West Germany (the Filipinas which became their flagship).

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The Sulpicio Lines schedule in 1974 (Gorio Belen research in the Nat’l Library)

Sulpicio Go then founded Sulpicio Lines Inc. with 16 ships coming from the old company. Of the 16, twelve were liners and the others were regional ships. Still with that size, Sulpicio Lines started with a Top 5 ranking in the local totem pole of shipping companies. Not bad for a start especially their fleet had many liners that came from Europe.

The remnant of Carlos A. Go Thong & Co. became the Carlos A. Gothong Lines, Inc. (CAGLI) which still bears the name of the founder and the other one was Lorenzo Shipping Corporation (LSC) which were owned by the siblings of the owner of CAGLI. For strength, of course, and to better withstand the tremors of the splintering, the two pooled operations but they retained different names. From the billing one can surmise that CAGLI was at the helm of the combine. But if one analyzes the fleet holdings, it would look like Lorenzo Shipping Corporation was the stronger one with more ships but this was not apparent to the public.

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The CAGLI + LSC schedule in 1974 (Gorio Belen research in the Nat’l Library)

One of the weakness of the CAGLI+Lorenzo Shipping combine was their lack of good liners. Out of the 10 liners from Europe that arrived for Go Thong in 1963 to 1969, only four went to the combine. 6 of the 10 went to Sulpicio Lines and 3 went to CAGLI but 2 of those were graying ex-“C1-A” ships which were World War II surplus ships that were broken up anyway in 1973. Only one of the 10 liners from Europe went to Lorenzo Shipping Corporation. Well, even the liner Dona Angelina (the former Touggourt) that came in 1972 also went to Sulpicio Lines.

Another retained ship of Carlos A. Gothong Lines Inc., the Sarangani Bay which came from the National Development Corporation (NDC) and was a former ship of the Maritime Company of the Philippines (the international line of Compania Maritima) was also broken up and even earlier, in 1972. Another retained ship, the Dona Paz (the former Dona Hortencia; this was a different and earlier ship than the infamous one which sank off Mindoro in a collision with the tanker Vector), Go Thong’s only liner from Japan was disposed off in 1974.

With those disposals Carlos A. Gothong Lines Inc. began buying small cruiser liners from Japan which were just in the 50-meter class, in the main, which were mainly good for the secondary lines as it were no bigger than the ex-”FS” ships. Lorenzo Shipping Corporation did not dispose much but it also began buying small liners from Japan and those were slightly bigger than what CAGLI was buying. Well, it seems the two companies were affected then by the fast devaluing peso which made ship acquisitions more expensive. Together the combined CAGLI+LSC fielded those and their few retained ex-”FS” ships against the competition.

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1977 CAGLI + LSC schedule (Gorio Belen research in the Nat’l Library)

The combine was not shabby as some might think. They just don’t have the glitz and the glitter and they used cargo ships to augment their fleets. The biggest shipping companies then can field 15 passenger-cargo ships from the mid-1970’s and the list is short: Aboitiz Shipping Corporation (including subsidiary Cebu-Bohol Ferry Company), William Lines Inc. and Sulpicio Lines Inc. The combined CAGLI+LSC was able to match that! Compania Maritima has less ships but their ships were bigger.

In reckoning, that meant CAGLI+LSC combine was in the Top 5 of the national liner shipping field and maybe even higher just before the break-up when in 1979 they had a total of 24 ships. Well, that is not bad and it is even surprising for a remnant of a big shipping company. But that will also show how big Go Thong will then be if they did not break up! If they did not then they will have over 30 liners, the same number as WG&A at its peak although admittedly the latter’s ships were bigger and better.

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1979 schedule of CAGLI + LSC (Gorio Belen research in the Nat’l Library)

What changed in the combine, however, was they were no longer challenging for the prime Manila-Cebu route as they didn’t have good liners for that. The primary liners of competition were simply better than theirs and they don’t have the fast cruiser liners (like Sweet Faith, Sweet Home and Cebu City) that were already dominating the Manila-Cebu route then. However, they were making a spirited fight in the Southern Mindanao and Northern Mindanao ports and routes. They were still not beaten.

In 1979, a new paradigm began to appear and appear fast in the local shipping scene, the container ships. Before, it was the passenger-cargo ships including the passenger-cargo liners which were carrying the cargo. If liner companies have cargo ships, it was very few and some didn’t even possess one. Now with the shift, it seems it was already de rigeur to acquire one including the associated container vans. It looked it is the only modern and safe way after all the headaches and complaints in the damages and pilferage of loose cargo loading (LCL).

If one studies the following course of events, it seems Carlos A. Gothong Lines Inc. and Lorenzo Shipping Corporation had a difference of opinion in how to handle the completely new and threatening paradigm, that of container shipping. CAGLI voted to leapfrog to ROROs while LSC voted to play in the container trade and even withdrawing from passenger shipping eventually. And this might have provoked the split between them.

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This later became the Dona Anita in the CAGLI + LSC fleet (Gorio Belen research)

The two then played not only different paradigms but also two different areas of concentration. Carlos A. Gothong Lines withdrew from the Southern Mindanao ports and routes while Lorenzo Shipping Corporation concentrated there.

But how they went from 1980 and on will definitely require a different article as the paths of the two companies diverged already.

Abangan!

The Times of Trouble for Philippine Liner Shipping in the Past

In Philippine liner shipping, obviously the first time of trouble was when the Pacific War erupted after Japan attacked the Philippines and the United States. Liners were requisitioned by the US on the promise that it will be replaced when the war ends. The order then was if the ship cannot reach Australia it has to be scuttled to prevent it from falling into the invader’s hands. Most of our liner fleet then was lost to scuttling and to enemy fire. Some of it were captured and were pressed into enemy service and when Japan was already losing they sank into the bottom of the sea due to US submarine and aircraft attacks.

These liners that were lost during the Pacific War were good liners and many were built in foreign shipyards just in the Commonwealth Era which means they were still new. The older ones were mainly built in the 1920’s. And they were not necessarily small. Many of the good liners before the war were in the 80-meter class (when internationally a 120-meter was already grand).

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A prewar liner, the MV Don Isidro (Photo credits: Commerce and Gorio Belen)

When the US replaced our lost fleet as promised the number might have been right but the quality is different. The former “FS” ships were not the equal of our former liners even in size and to be able to use those they have to be converted and refitted first as they were not really liners but basic cargo ships. “FS” meant “Freight and Supply” after all.

Former “Y” ships were also given as replacement and these were former tankers but still a handful were converted to passenger use by removing the tanks. The former “Y” ships were slightly smaller than the former “FS” ships. For the lost regional ships, the US gave as replacement the former “F” ships, both the steel-hulled and the wooden-hulled types. Former minesweepers were also given as replacement. None of them were passenger ships to begin with and so conversion and refitting still had to be done.

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A former “FS” ship (Photo credits: Philippine Herald and Gorio Belen)

To replace the bigger liners, the US gave Type C1-M-AV1 , Type C1-B and Type N3 ships as replacements but those were also cargo ships and not liners and so they also have to be converted and refitted. None of all these types can match the luxury and comfort of our prewar liners. Were we shortchanged in the deal? I think the answer is obvious. We had purpose-built liners before the war and the replacement were surplus cargo ships that had no use for them anymore because the war has already ended.

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A former C1-M-AV1 ship (Photo by Rufino Alfonso)

The second times of trouble for Philippine shipping was the crisis decade of the 1970’s when continuous devaluation of the peso dominated the economic situation. It was the time that taking out big loans was fraught with danger since nobody can foresee when will be the next devaluation (which means in peso value the loan balloons). Because of this uncertainty and risk, the taking out of loans to order brand-new ships completely stopped. There were no more brand-new ships after the Cebu City of William Lines came out in 1972.

If the mid-1960’s was marked by acquisition of second-hand passenger-cargo ships (most were not really liners) from Europe, in the 1970’s the shipping companies were looking for right direction. Inadvertently, Sweet Lines showed the way with the acquisition of the Sweet Faith in 1970 and the Sweet Home in 1973. This started the era of fast cruiser liners in our seas. However, due to the fogs of uncertainty in the economic climate, few realized this was the new paradigm, the fast cruiser liners.

Sweet Lines ad - "Inimitable Mates" (Sweet Home and Sweet Faith)

Photo credit: Jon Saulog

Among the liner companies, only William Lines took up the challenge early with the Cebu City. In the middle of the 1970’s, Sulpicio Lines followed suit and acquired fast cruiser liners beginning with the Don Sulpicio and Dona Ana. William Lines also kept in step by successively acquiring fast cruiser liners which were named after cities, the Manila City, Cagayan de Oro City, Ozamis City, etc.

What happened then to the other liner companies especially the other top guns? In the decade of the 1970’s, Compania Maritima was already in its death spiral but few realized it then because they were held in such high regard because they have been No. 1 for so long. Actually, there might have a death wish in them already. Compania Maritima never bought another liner after the second-hand but big Luzon in 1970 until their demise in 1984. At the same time, their ships were sinking with alarming regularity and mostly by wrecking.

Meanwhile, Aboitiz Shipping Corporation became heir to the PSNC (Philippines Steam and Navigation Company) fleet and operations. The Laurel-Langley Treaty dictated that in 1974 the Americans no longer have the right to do business here as if they are Philippine nationals (they have a right previously because of the Parity Amendment to the Philippine Constitution). But after 1974, Aboitiz Shipping Corporation did not buy a liner anymore and just relied mainly on a few small liners plus the trio of liners ordered by Everett Steamship in Japan in 1955 and the former “FS” ships they already had and the once from PSNC. These ships were already showing signs of mortality as they were already entering their fourth decade of service.

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A liner from Everett SS that went to Aboitiz (Photo credit: Aboitiz Transport System)

Sweet Lines, after acquiring liners that were among the biggest and the best for a decade which pulled them up in the totem pole of liners had the puzzling decision to just buy small liners in the later 1970’s. This happened in a situation when their liners from Europe were already over two decades old. In those times due to weaker metallurgy and finishing, 30 years is almost the longest service that can be expected from liners built in the 1950’s and so this means Sweet Lines has a future problem in the 1980’s. Did Sweet Lines think the 1980’s will be better?

The combined Carlos A. Gothong Lines Inc. (CAGLI) and Lorenzo Shipping Corporation, successor companies to the broken-up Carlos A. Go Thong & Co. also had the same policy decision as Sweet Lines, that is to just buy small liners (many can even be just classified as passenger-cargo ships). Meanwhile, the old Escano Lines also stopped buying ships in 1974 like Aboitiz when they acquired the small Katipunan.

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The former MV Katipunan (Photo credit: Edison Sy)

All in all, from 1973, only Sulpicio Lines and William Lines acquired big, fast cruiser liners. Compania Maritima, Aboitiz Shipping Corporation, Sweet Lines, Carlos A. Gothong Lines, Lorenzo Shipping Corporation all stopped buying big liners especially the fast cruiser liners (and that type is beyond the means of minor liner shipping companies including Madrigal Shipping). Maybe one reason is the steep cost already of liners because of devaluation, maybe it was the general economic difficulties which produce conservatism in businessmen, maybe it was also procrastination and hoping the next decade will be better.

And so it was not a surprise that in the 1980’s, from a rough equality of the top companies after the break-up of Carlos A. Go Thong & Co. in 1972, the liner scene was dominated by Sulpicio Lines and William Lines because they were the only ones which bet on the new ruling paradigm, the fast cruiser liners. The other simply lost their way or maybe even their enthusiasm and were just waiting for better days.

1978 1207 William Lines

Photo credits: Phil. Daily Express and Gorio Belen

I must admire not the depth of the pockets of the two but the Japanese agents which bet and trusted Sulpicio Lines and William Lines. I think that was the critical factor why the two kept getting fast cruiser liners even though the economic climate was not good over-all. Sulpicio Lines continuously acquired retired cruisers from RKK Lines and William Lines from Arimura Sangyo (the later “A” Line). Incidentally, both are Okinawa shipping lines. So their fast cruiser liners competed in Japan and they continued their rivalry here.

Don Sulpicio (Doña Paz) and Doña Ana (Doña Marilyn)

Photo credit: Jon Saulog

The next decade, the 1980’s, was even more difficult and it resulted in the death of so many liner companies, both major and minor. A new leading paradigm will emerge then, the RORO liners. Some majors will awaken from their stupor and try to compete again. Among them were Aboitiz Shipping Corporation and Carlos A. Gothong Lines Inc. Negros Navigation will also be among them after they also slowed down in buying cruisers (they were not in danger then because their cruisers liners were new and they had a monopoly of Bacolod port).

And that is how the chips broke in the 1970’s. Another time of trouble will happen three decades later but then that is another story worth another article.