The Biggest Shipping Modernization By Far

When the early 2010s entered, it was depressing for both the ship spotters and liner passengers. The Sulpicio Lines fleet was basically grounded by MARINA (Maritime Industry Authority), a consequence of the capsizing of the Princess of the Stars in a strong typhoon and the company had begun disposing liners. The Aboitiz Transport System (ATS) including the SuperCat had already stopped from buying ferries and was more intent on a sell-out in order for them to concentrate on the more lucrative power generation field.

If there was growth, it was in the sector of short-distance ROROs (but only slightly) plus in the Cargo RORO sector (those ROROs that just load container vans and vehicles). Overnight ferries also increased but oh-so-slowly. There was not much to be excited then and in the main the observers are not excited by the LCTs of some shipping companies concentrating here like those of Broadway One Shipping, Seen Sam Shipping/Cebu Sea Charterers, Concrete Solutions/Primary Trident Marine Solutions, Asian Shipping Corporation, etc. Nor would they be impressed by a few brand-new tankers by Chelsea Logistics and a few container ships of Solid Shipping Lines. Very few noticed the new local-builds of Tri-Star Megalink, the unrecognized shipping company of Negros.

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The latest brand-new ship of Tri-Star Megalink in her maiden voyage. Photo by ‘wandaole’ of PSSS.

I myself did not expect much in the last half of the 2010s (I even thought the liners will be singing their swan song). The decade was dominated by a landlubber President and we had lackluster MARINA Administrators who seem to be short on vision and also in budget. We did not seem to have a direction in maritime development early in this decade. If there was any bright light in that darkness is there was a new type of ship starting to come, the catamaran-ROROs of Archipelago Philippine Ferries, the FastCats.

But miracles do happen at times. The country unexpectedly had a President whose mantra is “Build, Build, Build” and soon that also spilled over to the transportation sector and not only in infrastructure. And that included the maritime sector. Soon I saw a procession of new-build ROROs, High-Speed Crafts (HSCs) along with the usual LCTs which is now filling a new sector, the Cargo RORO LCT sector.

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The latest in the FastCat series. Photo by GoukaMaekkyaku of PSSS.

The FastCat series continued and is now of its 13th ship as of this writing (July 2019) and news said the series will comprise of 20 ships. And there is even a rumor that it will be 30 ships in total with some plying foreign routes (there is really an effect when the banks open their lending to shipbuilding). As such this catamaran-RORO will be the most successful design in the country although its plans came from Australia and the ships were built in China. What a comeback for a shipping company that used to operate ferries that were derided by the public and observers. The FastCat series started in 2013 and on the average two ships per year come.

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The newest ROPAX of Starlite Ferries. Photo by Mark Anthony Arceno of PSSS.

The Starlite series of new ferries which started in 2015 with the Starlite Pioneer also continued and this should be 10 in number and is now on its 5th ship. But that does not include 2 Southwest Maritime (SWM) ferries that are also now also in the fleet of Starlite Ferries. These ferries were designed and built in Japan. Now, just the FastCat and Starlite fleets already comprise of 20 brand-new ships as of today and more are coming.

Trans-Asia Shipping Lines Inc. (TASLI) also has a new-build in an overnight route and a second brand-new ship for them has just been very recently launched in Japan and one more of this type will be built for them.

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The brand-new ferry of TASLI. Photo by Jose Zeus Bade of PSSS.

The Ocean Fast Ferries which is more popularly known as Oceanjet continues to locally assemble fastcraft kits from Australia in Mandaue that started with the Oceanjet 8 in 2011. As of the moment they already have 10 own-build fastcrafts. Actually once they launch a new fastcraft, they already have another one being built. As of today they are already the biggest HSC (High Speed Craft) company in the country with more than half of its fleet acquired brand-new.

The Aboitiz shipyard in Balamban, Cebu which was taken over by Austal of Australia re-started making HSCs for local use and so far they have delivered two as part of the SuperCat fleet and one to Grand Ferries of Calbayog, the Seacat One. It seems there are still about 3 or 4 of this kind of ship that that is being built by Austal Philippines in Balamban.

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Seacat One by Mark Edelson Ocul of PSSS.

Lite Ferries also took the brand-new route when the built 4 passenger-cargo LCTs from 2012 to 2016. These were built in China and finished in Mandaue. Island Shipping also bet on passenger-cargo LCTs but all were just locally-built in Hagnaya, Cebu. They had some 5 LCTs built in this decade and 4 of these were in the last 5 years when they began dumping their old cruiser ferries. Orange Navigation which is related to Besta Shipping Lines also had three passenger-cargo LCTs built locally starting in 2014 maybe to replace the losses of the mother company.

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A new-build from China of Lite Ferries. Photo by Russell Sanchez of PSSS.

Tri-Star Megalink of Negros had 7 ferries built this decade in a shipyard in Sagay City. Their design started with passenger-cargo LCTs albeit with extended passenger accommodations. Their design evolved until the later ones looked like conventional ferries already with bridges on the bow and no longer at the stern like those in LCTs. This meant a bigger and more comfortable passenger accommodation with the vehicle deck less hot or less wet depending on the season.

In Davao, Mae Wess/CW Cole also built two LCTs to connect Davao and Samal in their own shipyard in Samal. In Albay, the RLMC Ferry also came with two new ferries to serve Rapu-rapu and Batan islands.

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A new-build ferry of Mae Wess. Photo by Mike Baylon of PSSS.

And, in the past two years two new HSC companies came into being. Lucio Tan established a HSC company, the Mabuhay Maritime Express to ferry Philippine Airline (PAL) passengers from Kalibo to Boracay utilizing two beautiful catamarans. The other one was Island Water, a subsidiary of Shogun Shipping, a tanker company. This new company acquired 7 HSCs from Jianlong Shipbuilding of China. With such fast expansion their problem now is lack of viable routes. Shogun Shipping also contracted for 4 new ROPAXes (RORO-Passenger ships)and the first was already completed while three are still being built.

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A brand-new cat of Island Water from Jianlong Shipbuilding. Photo by Mark Ocul of PSSS.

Last but not least, Jomalia Shipping also ordered a brand-new HSC from Jianlong Shipbuilding, the Maica 5.

As of my count, there are now over 40 ferries of various types that have arrived in the last half of this decade and more are definitely coming. I have not seen or have known a rate of new-builds arriving in the country at this rate. And this does not even include more than two dozen brand-new LCTs for Cargo RORO LCT use. Those will ferry vehicles across short sea distances or container vans from Manila to the Visayas and Mindanao like what Ocean Transport does.

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A Cargo RORO LCT of Ocean Transport. Photo by John Carlos Cabanillas.

Liners, when they come have more impact in the imagination of the people. But their time has come and gone and we should acknowledge that the intermodal is already catching up with the container ships and the express container service of the liners. That is why these new-builds are mainly serving short-distance routes. The growth is already there.

I am glad that I was wrong when I thought our shipping doldrums will continue for a long time. I now look forward to more new ships coming into our seas.

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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.

Time Will Come The LCTs Will Take Away The Business Of The Container Ships

It was a friend of mine who worked as trusted man of someone high up in shipping who told me that MARINA has set it just to 30 or 35% load for a container ship to be profitable. I was aghast by that because that will mean terrible inefficiency and high rates for the shippers. That was twenty years ago and in that same time span our local shipping industry has been under attack for very high rates and it has been pointed out that from Davao it is much cheaper to send a container van to Hongkong or Singapore which are much farther than Manila. But even after two decades there has been no change in the situation of the industry. If there was, it is the rates went up geometrically higher. And of course that was unacceptable but our bureaucrazy only acts to change things if there is already an imminent revolt.

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Intermodal trucks for loading in BALWHARTECO Port in Allen, Samar

As they say water seeks its own path and one cannot hold or bottle it forever. One big response by shippers that I saw was in the widespread deployment of intermodal trucks that use our highways and then boards short-distance ROROs at the end of the road and then continue on to the next island. The intermodal truck might then still board another short-distance RORO to another island. I found out there are even trucks whose origin is Mactan island which are bound to Manila and will traverse Cebu island, Negros island, Panay island and Mindoro island before landing in Batangas port. And of course intermodal trucks from Manila or CALABARZON find its way to Davao regularly and there are some that reach as far as Zamboanga.

Consolidation” of the local cargo shipping industry especially the container sector has long been proposed by experts both local and foreign. But it has fallen into deaf ears and the national government will not wield the proverbial stick to make this come true and so it lays until now where it started, that is as proposals. “Consolidation” would have led to greater efficiency and thus lower rates. But locally, businesses and not only shipping wants to see efficiency not to lower rates (of course, they will pay lip service to that) but to higher profits. And so greed rules and trumps everything and the higher national interest and greater good do not matter in the end.

Our different shipping companies are republics of their own and historically they have never been into cooperation, consolidation or merger (except the “Great Merger” which produced WG&A and which had been a disaster to local shipping) even though some are related by blood. If there has been a CISO (Conference of Inter-island Ship Owners) in the past, it is only because they want to present a common front vis-a-vis the government and also to make sure that the agreed rates are being observed by all (however, in other countries that will ruled as “cartelization” and subject to penalties or even jail terms; but not here as that term is practically unknown and even Economics teachers here do not know that). Oh, well, actually the cartel master locally is MARINA which sets the rates. Historically, they set the maximum rates but like what happened to LTFRB they treat the maximum rate as also the minimum and MARINA in the end serves just the needs of the shipping companies and not the general public. But before it be misconstrued that they are servile to shipping companies, the truth is shipping companies fear MARINA as their livelihood and fortune is dependent on the decisions of MARINA. If the rates are drastically brought down then they might all go down.

That is the reason why the shipping companies will fight toe and nail for the retention of the Anti-Cabotage Law which bars foreign shipping companies from sailing local or inter-island routes. If the Congress (which has the power to repeal the Anti-Cabotage Law) allows the entry of the much more efficient and capable foreign ships then local cargo rates will drastically go down but our local shipping companies will drown. Regarding the Philippine Competition Commission (PCC), that entity will not amount to anything in shipping because that only checks mergers and mergers are a near-impossibility in shipping.

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LCT Raenell of Asian Shipping Corporation in Mandaue

And so shippers and other related interests will find new ways to bring down rates some other way. One of these is the employment of the cheap and cheap-to-operate LCTs which has only 1,000 horsepower on the average which is just about a third of the power of the container ships. True, they will probably only run at about 7 to 8 knots compared to the 11 to 12 knots of the container ships. So they will take three days to Cebu where a container van will only take two days. But, hey, the bulk of cargo is not express anyway and a difference of one day will not really matter, in the main. Nowadays if one really wants it fast one takes to the plane and use air cargo which is P20/kilo at the lowest now.

It is through the use of chartered LCTs from Asian Shipping Corporation that Ocean Transport had their start. Using big LCTs (by local standards), 94 TEUs can be fitted with the container vans stacked like Lego and handled by big forklifts. The LCTs cost P70,000 a day, fuel and crew included and so the transport cost one way is just over P200,000 not including cargo handling in Manila and possible cargo handling in Cebu. Plus of course other labor, office, yard and anciliary costs and maybe insurance. Under the table money, I have only the vaguest of ideas. But in this calculation one can see the movement of a TEU to Cebu via chartered LCTs is just P4,000, starting. That will not be the actual rate but one can see how low it is via LCT when the normal commercial rate for a TEU to Cebu is probably 5 times of that. The LCT might have just a capacity of 94 TEUs and the container van has 300 TEU but if they are only a third full on the average then the actual load of the two is just about equal and the LCT has probably only has a third of the horsepower of the container ship. The LCT usually has about 100% load. So it is very easy to see which is more efficient and why an LCT can give much, much cheaper rates.

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Roble Shipping was the next to follow the shipping model of Ocean Transport and like the first they were also very quiet about it. Maybe the two fear that if it becomes known widespread that the LCT mode is successful some shipping companies will lobby MARINA and MARINA will institute a crackdown and maybe cite “safety” again which is the usual bogey of MARINA. It has been a long time that the LCTs, being flat-bottomed and not that resilient against capsizing has been tagged with safety issues. It does not help either that being open-decked and having a low freeboard some issues were also attached by some to those. [Note: Ocean Transport and Roble Shipping now operates their own LCTs regularly carrying container vans from Manila to Cebu.]

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LCT Akira of Ocean Transport by John Carlos Cabanillas

The longest route I have seen LCTs bring container vans regularly is from Manila to Cagayan de Oro. And so locally it is proven now that LCTs can be container carriers for 500 nautical miles. I do not know if they are capable of Southern Mindanao routes which is up to 800 nautical miles but I think they can do it if needed. Of course, LCTs are normally earlier to seek shelter than container ships when there are storms. But if MARINA and the Coast Guard suspends voyages at 45kph wind speed then the container ships might not have an advantage anymore.

The LCTs are looked down upon by many but they should know that China which is already the biggest shipbuilding country in the world and is already a shipping power widely uses LCTs to move their cargo internally and on shorter distances. Actually most of our new LCTs now are from China and many came here brand-new. In terms of age, our LCTs might be younger than our container ships now. And LCTs are the backbone of our Cargo RORO LCT fleet which not only move trucks but also trucks and trailers bearing container vans especially to islands that are not served well by container ships like Bohol, Leyte and Samar.

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LCT PMI-3 from Leyte

If MARINA won’t crack down, I see intermodal trucks and LCTs further taking away the business of the container ships which is still growing in number but I know their cargo volume is not increasing. Consolidation would have been easy for them if they will just open their eyes and be open-minded and it does not mean that they would have to merge, an anathema to many executives as that might mean losing their positions and careers that they have built over the years. Actually the simplest consolidation is the swapping of container vans. There is no container company that has daily departures even from Manila and the simplest is they should load their containers to their partner shipping companies which has the nearest departure. That will mean ships being fuller and at the end of the month they can reconcile their figures and charges would have to be paid for the difference but of course it should be on friendship or partner rates.

With that, less ships might have to be employed, there would be less sailings and that would have to mean savings that should be passed on to consumers if they have any integrity. With consolidation too there might be enough containers vans to ports and islands that they have already abandoned or bypassed and so the container ships can come back there and sailing level might be maintained (now isn’t that neat?). Internationally, this system I mentioned is already being used and not only in shipping. I don’t see any valid reason why the local shipping companies can’t do it. It will only be impossible if their distrust of each other is too much and their owners and executives are too obtuse. The national government should also wield the stick after incentives are laid out. They can even set the rules and the system. It is high time already as for the past two decades after constant criticisms I have not seen our local container companies try to bring down container rates to acceptable world standards. They are just being kept afloat by the blood of the shippers. And that is why forwarder companies are making great strides and container shipping is just where they were two decades before. That is also the true reason they won’t venture out to foreign waters because they simply cannot compete. Regarding their charge that our ports are too shallow that is baloney because much bigger foreign ships use the same major ports that they do.

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LCT Poseidon 15 in Verde Island Passage

I wish the LCTs well for maybe it is them that will be able to bring down container rates even though they might not look modern or beautiful. If they drown the container ships then it is the fault of the container shipping companies themselves.

The Sinulog Fluvial Procession, the Ouano House, Piers 8 and 7

One morning I went to the foot of the SRP Road in Cebu to cover the remnant of the Sinulog fluvial procession. I just make do in that area because I will still see most of the participants and besides it is great effort to fight for a good view in the earlier parts of the fluvial procession. Anyway, it is in the vessels that I am more interested in.

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I was just in time. It was still early morning and there was a constant drizzle. But the position of the sun, the early morning and the drizzle made visibility and shots terrible. I have to make do with what is presented by nature. It seems more small crafts participated compared to the last time I covered the fluvial procession but less ferries going to Cebu port were forced to wait near the SRP. The Filipinas Iligan and the Oceanjet 6 were the only prominent ships waiting.

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There were motor bancas which stopped and disgorged the participants in the rocks by the SRP approach and I also covered those. The viewers did not stay long as the drizzle was continuous and there was no sight anymore in that areaexcept for the Coast Guard patrol ships, the Filipinas Butuan plus participant boats which were just idling.

I then decided to make my way to Ouano-House. I called it such because it is there that the E. Ouano house is located. Actually it is more like an office (I have already entered it). And I doubt if it is the ancestral house of the Ouanos because from what I can gather it is also located on reclaimed land like the other facilities in the area.

The jeep driver I rode was kind as he insisted on driving me to the wharf area. I appreciated it since there was a slight precipitation and I did not have to pay for a pedicab. The entry is easy as the guards didn’t mind. I thought it would be like that if the Lite Ferry LCTs to Tubigon have already transferred there. I might look like just one of its passengers.

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After the gate, however, it was a different matter. With the never-ending rains and the constant movement of trucks, the surface of the wharf area was already muddy though firm that one’s shoe will not get stuck. I was not surprised. If Ouano can’t maintain the road in the Ouano near the Mercado then they won’t maintain this one either. I thought FastCat would not have to worry for passenger competition to Tubigon. The muck here is already an advertiser for them. Ditto for the rolling cargo or vehicle loading trade.

It was a maze to get inside because the only firm ground with no mud was occupied by the new Litexpress CHA-ROs parked and blocking the pathways. I would go in one direction and pull back because I can’t go on. Finally I had to cross the muddy road where the trucks roll. I ended up in the Star Crafts area but this time it was already too crowded because the future Lite Ferry 17 and Lite Ferry 18 were being refitted there and steel sheets, acetylene tanks, generators and other equipment were occupying the spaces. The only open area is the road going to Star Crafts and it is also muddy.

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The Lite Ferry 17 and Lite Ferry 18 are ROPAX LCTs that came from China. Those were former HNSS vessels already phased out. HNSS means Hainan Strait Shipping and that tells where it formerly plied routes. One of them arrived earlier and is already sailing here, the Lite Ferry 16 which looked like a sister ship of them. It looked derelict then like the two now docked in Ouano-House but as always Filipino ship repairers will make them look good again.

Besides them was the new Lite Tug 1. It seems tugs are the vogue now of these competing overnight ferry companies. Roble have theirs already, Asian Marine Transport Corporation (AMTC) also got one, Cokaliong Shipping Lines followed suit and now Lite Shipping also have one too.

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Also there were Lite Ferry 26 and Lite Ferry 23. It seems those two were the ones doing the Mandaue-Tubigon route last December altho the latter is not the normal LCT but a catamaran-RORO (a slow one tho). Also there near the SMC Shipping and Lighterage facility was the brand-new Lite Ferry 30. It seems like what they did in the earlier Lite Ferry 27 they were building additional passenger accommodations. It looks like they are sister ships together with the Lite Ferry 29.

I did not stay that long in that wharf. Sometimes it is the rain that makes you decide that. I left after my functional shipspotting and I have to go through the maze again but that was easier than navigating the mud in various parts of that wharf. I really wonder how the passengers make do with such situation. Is the cheapness enough to make them stick? I was able to see the tail end of their way out when one LCT just arrived. I saw no shuttle and here the walk to the jeepney terminus is even longer with less shade.

Sometimes I cannot imagine in this era that such hardship can still be thrown to the passengers. Those LCTs, the wharf and the road were just really designed for trucks. Not passenger-friendly in any way. Maybe the FastCat and Star Crafts are a little more expensive but there is still the Lite Ferry 1 which also does a route to Tubigon. I also wonder. Why don’t the Super Island Express II just come back and maybe hold some off-hour schedule versus the Lite Ferry 1. Pier 1 might even have less expensive connections to the buses and jeeps of Cebu. Sorry not jeeps because that type is so few in Cebu. What I mean are the AUVs, Multicabs and converted Elfs and Canters of Cebu.

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From the wharf I made my way to the old Villa Shipping wharf which was just rented from Ouano. I was glad the K-9 guard of Ouano was not there. Their compound was closed and it seems no one is around. Good. I can approach their Elvira-1 and take shots. I wonder why they were too jealous of this old, derelict and bad-looking now former hydrofoil converted into a fastcraft which did not last in service. They should even be glad someone is taking interest. It seems they have a different psychology from us.

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There were no more Villa ships there and it seems they have already left as I can see no more ships and facility of them there. What was docked there was the West Ocean 1 of Ocean Transport. I can’t make of the the jumble there. It seems different entities are using that area and not all are connected to shipping.

It was at the far end where I was interested because I want to go near the Lady of Love of Medallion Transport which has not been sailing for some time already. Got some shots but it was not easy as the rain got heavier. Beyond Lady of Love the LCT Poseidon 19 was also docked. Last December this ship was still running the Matnog-Allen route for NN+ATS as a Cargo RORO LCT. Primary Transport Solutions owns this vessel and NN+ATS only charters it.

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Again I did not stay long. On the way out I took shots of the old derelict F/C Magallanes, a fastcraft for private use. I was told before it was a Durano gift to Ouano. I did not know enough of Cebu politics and shipping of before to work out how that happened. All I heard was before Durano has shipbuilding and was a Cebu shipping player. In fact one of their derelicts is there in Labogon by the Goldenbridge wharf.

I thought Ernesto Ouano was lucky (except he died prematurely). Well, just to have a big reclaimed area near Cebu, how much is that in legacy worth? Plus their wharves. It is practically a Lite Ferries wharf now but Lite pays them. They are rich just because of the payments for the use of the wharves. But later it seems F.F. Cruz and Lua stole their thunder in Cebu reclamation. And I don’t think they are players in the future Cordova reclamation. But still they are very lucky.

I no longer pushed my ship spotting that day. Too much rain and I am not a farmer. Rain would have been nice in April but the programmer is a little awry. But the next day I came back to the same area but this time my targets were Pier 8 and Pier 7. It was a Sunday and there was no activity there past CDU. I first asked the guard of Ravago/Asian Shipping Corporation. A little canine too but I didn’t mind, didn’t press. Can’t call their GM as all mobile lines of Metro Cebu were down to prevent bombing. I was really more interested to see what was the denouement in the AMTC (Asian Marine Transport Corporation) eviction case nearby.

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The AMTC yard was deserted now along with the Dakay Construction yard which was also part of the AMTC lot that was in dispute with F.F. Cruz through the MARRECO entity. MARRECO sought the eviction of AMTC for non-payment and they won in the court. MARRECO then blockaded the facility to prevent AMTC from using it. And AMTC left and transferred to Ouano after a failed bid for the Talisay fishport.

The guards by MARRECO there were suspicious but they told the reason why the Super Shuttle RORO 8 was docked there last December was to take in all AMTC materials left that can still be loaded. But I don’t really know why Super Shuttle RORO 3 and Super Shuttle RORO 2 were also there last December. The two had long been just anchored and not sailing for the best part of 2016.

From there I made my way to the Roble wharf. The left side of that if facing to the sea actually belongs to F.F. Cruz and it is where aggregates carrier LCTs and barges dock. The right side belongs to Roble Shipping. There were three newly-arrived freighters there and I was told two belongs to the scions already. There was also the many docked ships of Roble including the non-running ones. The Ormoc Star was there. She is really ready now for the breakers. On the far end was the fire-hit Wonderful Stars where no work is going on.

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It was lonely in that area on a Sunday Sinulog. Almost no people and movement. I caught a jeep going to Mactan and then I walked again the old Mactan bridge. From there I took a Multicab to Muelle Osmena and took the Metro Ferry. The light was dying when I reached Pier 3 and that ended my ship spotting for that day.

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.

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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.

It Seems They Are Beginning To Fear The Cargo RORO LCTs Now

Once upon a time, in the early days of connecting islands, LCTs had a place as exemplified by Millennium Shipping in the 1970’s and the LCTs connecting Mactan island and the islands of Samar and Leyte. But as it moved into the 1980’s and the 1990’s, it was the short-distance ferry-ROROs that began connecting the islands like in San Bernardino Strait, in Surigao Strait, in Verde Island Passage, in Guimaras Strait, in Tanon Strait, in Bohol Strait, across Camotes Sea, in Basilan Strait and in Panguil Bay. LCTs began losing favor then and some of the reason might be psychological. There was a belief then that LCTs were “less safe”.

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It was actually only Maayo Shipping and Tri-Star Megalink which bucked the trend in those decades before the change of the millennium by still using LCTs as passenger-cargo carriers. To some extent, Asian Marine Transport Corporation (AMTC) can also be counted here before the start of the new millennium. Among the the most notable operator of passenger-cargo LCTS in this millennium are Lite Ferries and Starhorse Shipping Lines. Of course, LCTs also connected Samal island, Guimaras and Olutanga islands but I would rather exclude it here as they were very short connections like the connection across Sula Channel of Albay to Cagraray island.

LCTs as means of transport are slow and slower than short-distance ferry-ROROs. Their passenger accommodations are also very basic and small and can be uncomfortable. They were never really meant to be people carrier unless one is talking of the hybrid Korean LCTs (like the Ma. Angelica Grace, Reina Banderada, Reina Justisya and Star San Carlos among others) which have more comfortable passenger accommodations and even airconditioning plus bigger engines which afford speeds higher than the basic, short-distance ferry-ROROs.

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I do not know which started the trend of using LCTs for vehicles mainly with not much intent to carry passengers. The most significant I noticed that had an operation like this was Golden Bridge Shipping of the Lua family (owner of a tramper company and Oceanjet) which has its base in Cansaga Bay and had a route to Hindang, Leyte. Early on they were known as Socor Shipping. Of course, Mandaue Transport also had a route from Mandaue to Tagbilaran and Simpoi Shipping had a route from Carmen to Ormoc.

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There were also LCTs that were used not for rolling cargo but as container van carriers. Ocean Transport chartered LCTs from Asian Shipping Corporation for this purpose which was copied by others until they were able to acquire their own LCTs. But of course, transit time from Manila to Cebu can take up to 4 days but container vans won’t protest unlike passengers. Some Asian Shipping Corporation LCTs were also chartered to load container vans from Manila to Cagayan de Oro.

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These operations are of course Cargo RORO operations. The only difference is instead of using Cargo RORO or RORO Cargo ships, LCTs are used. That is why I termed these LCTs as “Cargo RORO LCTs”.

Starting in 2012, LCTs from China began appearing in great number in Mactan Channel and the biggest owners were Cebu Sea Charterers, Broadway One Shipping, Concrete Solutions/Primary Trident Marine Solutions and Royal Dragon Ocean Transport. The first two simply had numbers as names of the LCTs. The third one was the owner of the Poseidon LCTs and the last one was the owner of the Meiling LCTs. Asian Shipping Corporation also bulked up their LCT fleet. Supposedly, these LCTs which were called “deck loading ships” in China will be used to transport ores from Surigao to China.

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However, two major happenings intervened. One, the need of China for ores declined and in November of 2013, Typhoon “Yolanda” wreaked havoc in Eastern Visayas. In the aftermath, in the need for relief and rehabilitation of the region, trucks and trailers have to cross. This happened during a time that the long-distance trucks were already running via Eastern Visayas as substitute for the ship-borne container vans and many of these are still destined for Mindanao.

Immediately, mile-long queues of trucks formed in the ports of Matnog, Allen, Liloan, Benit and Lipata leading to loud protests. MARINA then allowed the temporary use of LCTs which became de facto permanent until today. Meanwhile, there was also a great demand for bottoms to be used by trucks across Camotes Bay. Suddenly, the moored “deck loading ships” in Cansaga Bay was crossing Camotes Bay, San Bernardino Strait and Surigao Strait. Cebu Sea Charterers and the Poseidon LCTs slowly begans Cargo RORO LCT operations together with the Adnama LCTs (many more were used in Surigao and elsewhere). Roble Shipping meanwhile chartered LCTs from Asian Shipping Corporation which they replaced when they were able to acquire their own LCTs.

There was also an upsurge in LCT demand to Bohol and some old LCT began plying routes. Feeling their grip threatened, Lite Ferries bought them all lock, stock and barrel aside from buying additional LCTs. Meanwhile, Cebu Sea Charterers invaded other routes like the Carmen-Ormoc, the Dumangas-Banago and the Tuburan-Escalante routes. Suddenly, the lowly LCTs which became Cargo RORO LCTs looked menacing. Even the pioneer Golden Bridge Shipping which had queues even before “Yolanda” feels threatened now.

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How did this come to be? One reason is at the start, the overnight ferry companies crossing Camotes Sea did not give due regard to the rolling cargo or vehicles. They were too content in their successful palletized and loose cargo operations and they underestimated the need of the rolling cargo. At the start only Golden Bridge Shipping, Simpoi Shipping and Asian Marine Transport Corporation were servicing them. It seems Lite Ferries saw the need earlier than their fellow overnight ferry companies. Well, they are strong in rolling cargo operation in Bohol and is even dominating it.

Secondly, in terms of rates none can beat the Cargo RORO LCTs. They might be slow but in terms of rates they are far cheaper than the overnight ferry companies as in they can give rates that are cheaper by 40%. Well, they don’t need to invest in passenger services and accommodations and they have small engines compared to overnight ROROs. Now they even carry container vans not in trailers to Leyte from Cebu superseding the container ships that used to call in Leyte ports from Manila.

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That is always the danger brought by Cargo RORO LCTs, the low rates. Now feeling they can’t beat it, the overnight ferry companies are beginning to acquire their own LCTs. Lite Ferries is so well ahead in this game but Roble Shipping is already following suit. Medallion Transport seems not to be that worried yet because compared to other they saw immediately the need for rolling cargo operations and were not too dependent on palletized and loose cargo operations. After all they started in short-distance ferry-RORO operations and so they might have had a better understanding of rolling cargo from the start.

The old ROROs better adjust now. From what I heard even the big Asian Shipping Corporation which has the most number of ships in the Philippines is joining the fray. It seems they might have already tired of just chartering LCTs.

In the eastern seaboard, I heard the Cargo RORO LCTs are already the favorites of the truckers. As they say money talks. Price point as decision point is simply too easy not to miss. Everybody wants savings.

To me, it is no longer a question if the Cargo RORO LCT sector will take a slice of the pie. The question is how much. From container ships to liners to overnight ships to short-distance ferries, all are threatened. They will not be overwhelmed but they must be prepared to share the pie with the Cargo RORO LCTs. By how much, now that is the guessing game. All I know is the Cargo RORO LCT rates are simply unbeatable. And that might be sending shivers now down the spine of the competition.

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And I dare say this development is good. Rolling rates are simply too high in the Philippines because the regulatory agency MARINA never learned how to compute rates. It is as if fuel and distance are never really factored in.

Rolling cargo rates of the LCTs across Camotes Sea is now lower than RORO rate across Surigao Strait. How did that happen?