The Problem With The LCTs

In the old days after World War II, the LCTs, then known as “Landing Craft Tank” was the means to transfer vehicles across the islands and our Navy has the biggest number of that and they even have the bigger LSTs (Landing Ship Tank) which has a door covering the ramps while the LCTs have unshrouded ramps. The Navy then did the service of transferring the vehicles and the heavy equipment between the islands and in general for free for after all most of the businesses then were also in the hands of the local powers or their friends.

THE BRITISH ARMY IN THE UNITED KINGDOM 1939-45

A World War II LCT. Source: navsource.org

Along the years, privately-held LCTs started growing in number. It was easy to build, no sophisticated equipment is needed, it is cheap and it is practical with different uses. It can be used to transport goods to practically anywhere and even where there are only  unprepared ports. Loose cargo can easily be loaded and unloaded without the use of cranes or booms as a truck can just board the LCT and dock handlers or peons can manually load or unload the cargo. Plus, the LCT is actually a RORO (Roll On, Roll Off ship) as vehicles or tracked equipment can be loaded or unloaded through its ramp.

Our first short-distance ferry-ROROs carrying passengers, cargo and rolling cargo were actually LCTs. That was when there were still no shirt-distance ROROs (and that arrived only in 1979). The short-distance ferry-ROROs came and came but the LCTs remained in the shipping scene. They were still cheap to acquire and operate and they can be built practically anywhere and even in just an improvised shipyard. The skill level needed to build them was not high and the equipment level needed is low as in the acetylene torch was the most critical tool needed.

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A Maayo LCT by Mike Baylon of PSSS

Along the years, the LCT designation changed to “Landing Craft Transport” to better reflect that it no longer carry tanks as they were really full-pledged transports already. As of now, most of our LCTs are just pure cargo ships carrying anything including the ores of strip mining. However, they can still be found in some routes practically unchanged and being used as passenger-cargo ROROs and probably the premier exponent of that is the Maayo Transport which connects Cebu and Negros islands in the southern part. That company has a pure LCT fleet. Other notable operators are Tris-Star Megalink (although their design have evolved already) which connects Negros and Panay island through the Bacolod-Dumangas route. Starhorse Shipping Lines which started in the Marinduque routes also had LCTs in their start. Lite Ferries which is active in Central Visayas and northern Mindanao also uses many LCT and lately they have been acquiring those from China. Recently, a new shipping company touting the LCT came, the Orange Navigation of Baleno Shipping that has lost half its fleet to maritime accidents and which decided on the cheap LCT as replacement. Island Shipping, meanwhile, disposed of it basic, short-distance ferry-ROROs and cruisers and invested in LCTs built right there in its Hagnaya base, There are also other small operators of passenger-cargo LCTs aside from the six mentioned.

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An Orange Navigation LCT by Jon Erodias of PSSS.

However, there is a problem now with the passenger-cargo LCTs and that is its lack of sophistication which means the passengers have to unnecessarily put it with them. That might be okay in the earlier days when we still lacked short-distance ROROs but times have already changed and so the LCT should also evolve.

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An Island Shipping LCT by Karl Sabuga of PSSS.

LCTs clearly lack passenger space and amenities and it is generally hot because the metal of the superstructure is just too near. They do not have the passageway at the sides of the basic, short-distance ferry-RORO which keeps the sunlight away from the passengers.

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Late-model Lite Ferries LCTs by James Gabriel Verallo of PSSS.

The LCTs are also bugged by lack of speed because of the shape of the hull (they are flat-bottomed) and generally they are underpowered. When the LCT was designed, speed was never one of the considerations. They were just designed to chug along and carry the cargo cheaply to unprepared docking areas. While short-distance ferries will sail at 10-12 knots, LCTs generally sail at 7-8 knots. Passengers have to put up with such deficiencies and for what? The same level of fares and rolling cargo.

I would argue that to be fair, operators of LCTs should charge lower rates, a discounted one. For them to charge the same with lower acquisition and operational costs means all those advantages just accrue to them and none for the passengers and shippers. One cannot say they have a choice because there is such a thing as time slot in shipping (and also two-hour separation in departure times in many ports) and the passengers and shippers would wait for hours just to wait for a better ride. MARINA, the maritime regulatory agency should also take note of this.

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A Tri-Star Megalink ferry evolved from the LCT by Tristan Lirasan by PSSS

I commend the efforts of Tri-Star Megalink’s evolution of their LCTs into ferries already alike that of the basic, short-distance ferry-RORO.  Those are already faster, the bridges were move forward and so the passenger accommodation  were enlarged and an air-conditioned Tourist section is already standard. That’s the way it should be. There should be progress.

Meanwhile, Montenegro Shipping Lines pioneered the use of Korean hybrid LCTs like the Reina Justisya and the Reina Banderada which are fast for an LCT (because the power is higher) and do not have any more the hull of an LCT. Those even have bulbous bows. But the superstructures of those are not yet extended.

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A modernized LCT of Starhorse Shipping Lines. Photo by MJay Muyo of PSSS.

Lately, however, in a good development starting in 2018, Korean-type LCTs with extended superstructure and bulbous bows started arriving in the Philippines. This was represented by the Virgen de Penafrancia IX and Virgen de Penafrancia X of the Starhorse Shipping Lines of Lucena. In the same year, with the acquisition of a shipyard in Lucena, Montenegro Shipping Lines rolled out the new-build Santa Carmelita to be followed by the Santa Soledad, another new-build this year. Not to be outdone, Starhorse Shipping Lines is bringing anytime to the country their new Korean-built Virgen de Penafrancia XI.

On the other hand, the big Lite Ferries of Cebu which is beginning to dominate the short-distance routes in Central Visayas still have the traditional LCTs and lately they have been acquiring surplus and new-build LCTs from China. Lite Ferries also have LCTs just used for cargo including rolling cargo.

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An improved LCT by Montenegro Shipping Lines. Photo by Carl Jakosalem of PSSS.

There is now a new type of ship, the Cargo RORO LCT, the Philippine version of the RORO Cargo ships of Europe but much less sophisticated. They now serve as truck carriers in the busiest short sea crossings in the country and this segment is actually growing fast. A version of this serves as container van carrier from Manila to selected major ports in the Visayas and Mindanao to as far as Davao. In this role, the LCTs deficiency is minimized because what is mainly carried are trucks and its crew which is already used to the harsh realities of the road.

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A Cargo RORO LCT. Photo by Joe Cardenas of PSSS.

I think in due time LCTs should already be phased out in the passenger-cargo trade. Otherwise, the operators should strive to improve them and not just build the same model that was practically unchanged since 1945.

Our passengers deserve better now.

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Was It Choking Or Indigestion For Starlite Ferries?

Almost since its establishment I tried to monitor the Starlite Ferries which was founded by Alfonso Cusi who has Mindoro origins. Starlite Ferries was easier to track since unlike her pair Montenegro Shipping Lines Inc. which is related in a way to them in patronship, Starlite Ferries did not expand beyond Mindoro unlike the other one which can be found practically all over the Philippines (and so it has the distinction of being a national shipping line without being a liner company). Starlite Ferries, meanwhile, remained a short-distance ferry company and in this segment they basically carry rolling cargo or in layman’s term we call that as vehicles and passengers, of course.

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Starlite Pioneer by Raymond A. Lapus

Over the years of its existence, Starlite consistently added ferries to its fleet (although they had sales and disposals too) until they reached some 11 passenger ships in 2013, to wit, the Starlite Jupiter, Starlite Phoenix (a fastcraft), Starlite Juno (a fastcraft), Starlite Neptune, Starlite Polaris, Starlite Annapolis, Starlite Atlantic, Starlite Navigator, Starlite Ferry, Starlite Pacific and the Starlite Nautica. In their track record, aside from surplus ships acquired from Japan they were not anathema to buying the discards of other local shipping company like when the Shipshape/Safeship ferry dual ferry companies quit operations and they took over its fleet (but not the routes to Romblon). And from Cebu they got a ferry from the defunct FJP Lines which is better known as Palacio Lines. Actually, the first three ships of Starlite Ferries which are no longer existing now were from other local shipping companies.

However, over the years, what I noticed with Starlite Ferries is although their fleet is already relatively big by local standards they did not get out of the confines of Mindoro where they were just serving four routes. These are the Batangas-Calapan, Batangas-Puerto Galera, Batangas-Abra de Ilog and Roxas-Caticlan routes. The longest of this route is the last named that takes four hours of sailing time while the other routes take two to two-and-a-half hours depending on the ship. With such length of sailing time it can be gleaned that actually their 11 ferries is  a little bit over already than their need for the four routes.

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Starlite Reliance by Carl Jakosalem

So it came as a bombshell for me and many others that they will be getting 10 new ferries from Japan through a loan with a government loan window (and the first one, the Starlite Pioneer arrived in 2015). They were too proud of the coup and acquisition, of course, and they crowed about it in the media with all the jeers about the old ferries but I was skeptical. My first question is where will they put it. It is easy to apply for new routes but the approval is another matter. They do not own MARINA (Maritime Industry Authority), the maritime regulatory agency, it is no longer the reign of the nina bonita Maria Elena Bautista who did a lot for her patron and its pet Montenegro Lines. And I was sure the players that will be affected by their planned entry will fight tooth and nail (who wouldn’t?) and the approval process for franchises goes through public hearings anyway and if there is real opposition then it will be difficult to rig it (what are lawyers for anyway?). Getting route franchises is not as easy as getting it from a grocery shelf unless it is a missionary route which no shipping company has plied before except for motor bancas. And there is no more possibility now that a program like the “Strong Republic Nautical Highway” of Gloria which created new routes (and made it appear that old routes are “new routes”). It was the time of Noynoy when their new ferries came and Al Cusi who is identified with Gloria was out of power.

It is obvious that they can only absorb the new ferries well if they can dispose all their old ferries. But regarding the price it will be, “Are they buying or are they selling?”. That means forced selling will not gain them a good price and with the ferry structure in the country and their fleet size I am not even sure if there will be enough buyers especially when banks are averse to extending loans to shipping companies. Pinoys are averse to the breaking of still-good ships unless one’s name is starts with “A” and ends with “z” or maybe connected to 2GO (well, Negros Navigation’s case then was different as there was force majeure in it).

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Starlite Eagle by Carl Jakosalem

And they might be forced to sell their old ships if they have honor because after all the owner Al Cusi is one of the hecklers of our old ferries and pushing for their forced retirement (and the sauce for the goose should also be the sauce for the gander but then Al Cusi was not selling old ferries until his end in shipping). I thought those in government should lead by example? By 2016, with the ascension of Digong, Al Cusi was back in power and my fears of an administrative fiat to phase out old ships intensified.

Then a news item came out that they will enter the prime Ormoc route. My immediate thought was of a dogfight not only in sailing but also in the approval process of a franchise. The Ormoc route from Cebu has a lot of parallel routes competing with it (like Palompon, Baybay, Hilongos, Bato and Albuera routes) and all of them will raise a howl against the entry of an outsider especially one with good ships, naturally. I was even titillated how that will play out (it could have been a good boxing match or worse an MMA fight). But then nothing came out of that news. Well, certainly Al Cusi knows how to pick a good route, I thought, but he might have underestimated the opposition (of course, the better the route, the fiercer will be the opposition).

And then another news item was published that Starlite Ferries will go into Southeast Asia routes. Well, really? That was my thought as I had doubts again. It is Indonesia that is the most archipelagic in our region but I knew the rates there are too cheap and sometimes as ROROs there is practically no fare charged in the old ships if patrons don’t want to pay (and so I remember the problem of some of our operators in our ARMM Region where collection of fares can be a problem and rates are really so low). They wanna go there with brand-new ships, I thought? Won’t there be demand for reciprocity? Oh, well, I would welcome Indonesian ferries in our waters especially if they are liners, why not? Now, what a way of upsetting the cart, I mused. But then nothing came out of that too.

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Starlite Saturn by Raymond A. Lapus

The logical is actually to phase out his old ferries immediately as there is no way to create a bonanza of new routes given how difficult it is to secure new routes in the country and actually the situation is the feasibility of routes are limited as it is dictated by people and goods movements and not by wish, simple geography as in nearness or MARINA inducement. They can try the Pilar-Aroroy route that was validated by three titled international experts on shipping with all the feasibility study calculations but then as known by the locals it wouldn’t last and they were proven right as the route lasted only a few months (Archipelago Philippine Ferries tried it). Plus they might have to dredge Pilar port as that is shallow for their ships (the government will pass on to them their dredging responsibilities and they will be lucky to earn a thank you). MARINA has actually a lot of routes that they were promoting like the Pasacao to Burias route, the Cataingan to Maripipi route, et cetera but shipping operators not biting as they are not fools unlike some sitting in some MARINA chairs. With Starlite Ferries obliged to pay the bank amortization they cannot simply let their ships gather barnacles in Batangas Bay.

But where will he sell his old ferries? Many of the ships of Starlite Ferries are not fit to be small short-distance ferry-ROROs, the type most needed and most flexible to field (that will survive better in low-density routes) and now the problem is that is being supplanted now in many cases by the passenger-cargo LCTs and RORO Cargo LCTs which may be slow but are cheap to operate (and so many of these are arriving from China brand-new and not surplus with good terms). The reinforcements that entered San Bernardino Strait and Surigao Strait were actually LCTs (the former are operated by SulitFerry, a 2GO enterprise) and there are LCTs that are new arrivals in Tablas Strait that belong to Orange Navigation, a sister company of Besta Shipping.

Cebu won’t buy it as what is mainly needed there are overnight ships and generally bigger than what Starlite Ferries have. The actual direction of ferry sales is from Cebu to Batangas and not the other way around. It is also hard to sell the Starlite ferries to Zamboanga as only one shipping line has the capability there to buy (Aleson Shipping Line) and they have enough ships already and they can afford to buy direct from Japan. It won’t be Manila as there are no more overnight ships there remaining to Mindoro and Romblon (Starlite Ferries helped sank Moreta Shipping Lines, MBRS Lines and its successor Romblon Shipping Lines). The operators to Coron and Cuyo are not that big and the Starlite ships are too big for those routes. It is really hard to dispose of 11 ferries unless Starlite gives it on a lay-away plan but then they have to pay the bank for their new acquisitions.

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Starlite Archer by John Edmund

I feared Al Cusi with his Malacanang clout and political clout (he is vice-president of the ruling party now) will resort to administrative fiat through the Department of Transportation. But that will be bloody and when the old operators feared something was afoot with the Tugade trial balloons they were ready with deep questions like if there is a study that shows old ferries are unsafe (good question) and MARINA was put on the defensive. These old operators are not patsies, they can hire good lawyers and they have congressmen as padrinos that Tugade and Cusi cannot just push around.

And so came the announcement that there will be no phase-out of old ferries (which is nonsense anyway as phase-out should be based on technical evaluations and not on age). It seems that was a big blow to Starlite Ferries which by that time was already shouldering the burden and amortizing five new ferries with five more on the pipeline and their old ferries still around and unsold (their other new ferries are Starlite Reliance, Starlite Eagle, Starlite Saturn and Starlite Archer). Trying to force their old ferries in some near routes might just mean competing with their sister Montenegro Lines and their shared patron saint will look askance to that.

I guess the financial burden of the new ships were getting heavier by the day for Starlite Ferries. With a surplus of ferries they were even able to send Starlite Annapolis to Mandaue just to get some new engines if what I heard was true. There is really no way to cram 15 ferries (as Starlite Atlantic was lost maneuvering in a typhoon) in just four short-distance routes. I just don’t know, should have they converted some of their new ships into overnight ferries and competed in the longer Batangas to Caticlan route? But the accommodations of the former Cebu Ferries ship of 2GO are superior to them. How about the Batangas to Roxas City route that is irregularly served by Asian Marine Transport Corporation?

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The most senior now in the fleet of Starlite Ferries

But instead of fighting to resolve their problem, Al Cusi took the easy way and sold out. Well, it is never easy to finance five new ferries with five more still on the way with no new routes coming. They might drown in debt and default. Or end up just helping the bank make their living (in Tagalog, “ipinaghahanapbuhay na lang ang bangko”).

I wonder why Al Cusi did not just get two or three units for testing and evaluation and proceed slowly. With that they might have known with less pain and pressure that although their ferries are new it does not have a technological edge nor an advance over the old ferries unlike the new FastCats. They knew already that intermodal vehicles are mainly locked like the Dimple Star buses are locked to them and so newness of the ship will not easily sell and not even to private car owners whose main concern is what RORO is leaving first (and that is also the main concern of the passengers who do not even have a free choice if they are bus passengers).

It looks to me the 10 new ROROS ordered by Starlite Ferries was a simple case of indigestion or worse a choking. It looks like more of the latter and so Al Cusi spit it out and settled for a half billion pesos as consolation for the sale of Starlite Ferries to the Udenna group, the new hotshot in shipping which also owns Trans-Asia Shipping Lines of Cebu now. That might be a good decision for Udenna as their Trans-Asia Shipping Lines lacks ferries now whereas Starlite Ferries has a surplus and so it might be a good match. Converting the ships into overnight ferries is not difficult nor would it cost much although the ships of Starlite Ferries is a little small than what Trans-Asia Shipping Lines was accustomed to (but then it is also possible to lengthen the upcoming ferries).

Now I don’t really know exactly where Starlite Ferries is headed and it will not be as easy to guess that but in all likelihood a Starlite and Trans-Asia marriage might work out especially since the Udenna group has the money to smoothen out the kinks.

Nice experiment but it seems the 10 new ships was too much for Starlite Ferries to chew.