Are We Heading Into The 3rd Surplus of Bottoms?

In maritime connotations, a “surplus of bottoms” means there is a general surplus of ships which can mean marginal loads to survive and worse a fare and freight war occurs. When this happens some shipping companies do not survive and so a “correction” (this term is used in Business and Economics) occurs but that can mean ships going to the breakers or being idled.

The first surplus of bottoms happened in the start of the 1980’s and that happened in the year 1980 and in the succeeding years. It became even more pronounced when the financial and political crisis hit the country in 1983 after the assassination of the opposition political leader Ninoy Aquino.

What triggered the surplus of bottoms in 1980 was the arrival of the new container ships which changed the system of carrying cargo. Before their arrival it was the passenger-cargo ships which carried the express cargo (the cargo that have to be moved fast). There were actually only a few cargo liners (cargo ships that have regular routes and schedules) before the arrival of the container ships. Passenger-cargo ships before 1980 have voluminous cargo holds (holds because there were not RORO liners before 1980 except for two, the third Don Carlos of Sulpicio Lines which arrived in 1977 and the Don Johnny of Lorenzo Shipping which arrived in 1976).

But when Sea Transport Company, Aboitiz Shipping Corporation, William Lines, Sulpicio Lines and later Lorenzo Shipping Corporation and Central Shipping Company (the vargo company of Sweet Lines) invested in container ships, suddenly the old passenger-cargo ships especially the former “FS” ships suddenly had no enough load and many were laid up and they rotted and were later sold to breakers especially during the financial and political crisis of the mid-1980s when the country’s growth rate turned negative.

Cargo is the bread and butter of shipping and it is not the passengers that make them viable. The major shipping lines were just too happy then to invest in container ships for they can move cargo without employing too many crews that go with the operation of passenger-cargo ships. With container ships there won’t be complaints about delays, insurance goes down, there is no need to stack up on food, etc. Operation became more simple with less risk. But that paradigm change meant a lot of old passenger-cargo ships will have to go because of a surplus of bottoms and that surplus became more pronounced when the mentioned crisis  hit.

There were more than a dozen shipping companies which did not survive this first surplus of bottoms especially in the crisis and among them were the old venerable Compania Maritima (which was the biggest shipping company for decades already), the various small shipping companies to Bicol and the Eastern Visayas which were also greatly affected by the development of intermodal shipping, the Northern Lines, Madrigal Shipping Company, Tomas del Rio & Company (the former Rio y Olabarrieta) and others.

The second surplus of bottoms period hit at the tail end of the administration of Fidel V. Ramos and it spilled into the terms of Joseph Estrada and Gloria Macapagal Arroyo. This period covered the late 1990s and the early 2000s and this was more pronounced in the liner sector like the first surplus of bottoms period.

The cause of the second surplus of bottoms period was actually the incentives given by Fidel V. Ramos to shipping when the acquisition of surplus ships from Japan quickened fast and many new players emerged not only in the  liner sector but also in the tramper sector which is actually in competition with the cargo liner sector. This second surplus of bottoms was exacerbated by the emergence of the budget airlines and the intermodal trucks and buses which took passengers and cargo from the liner sector.

In the second surplus of bottoms period the negative effect was more widespread. It happened in the High Speed Craft (HSC) sector when the arrival of the SuperCats, Sea Angels, Weesam Expresses, Bullet Expresses and others were simply too fast for the actual passenger growth. And this was worsened too by the Asian Crisis of 1997 which dampened business. One result was that we needed to sell High Speed Crafts outside the country.

In some short-distance ferry routes like in Batangas and Zamboanga this surplus of bottoms resulted in dog-eat-dog completion where fare and rate wars erupted. It was good for the passengers, car owners and shippers initially but this also meant that the financially weaker (but not necessarily smaller) shipping companies won’t survive. Among the notable casualties in Zamboanga were the Sampaguita Shipping Lines and SKT Shipping which later reincarnated into the KST (Kong San Teo) Shipping (but which also went under).

In Batangas, the formerly dominant Viva Shipping Lines and its legal-fiction companies also sank along with some other smaller shipping companies. In Cebu there was also a show of surplus bottoms but not as great as in Batangas and Zamboanga. Funnily, someone who has no knowledge of shipping, Myrna S. Austria made a Ph.D. thesis of this period and declared that so many routes lack competition. And the many routes and shipping companies disappeared because in truth there was so much competition (her data was incomplete and she didn’t know that parallel routes compete).

And like in first surplus of bottoms era a “correction” happened. What is sad here is we lost so many liners and liner routes. WG&A and Cebu Ferries Corporation shrank to just about a third of its former size and SuperCat to just less than half of its peak. The pioneer in fastcrafts Bullet Express (later Bullet Xpress) also disappeared along with some other High Speed Crafts operators.

After this the acquisition of ships went into doldrums that for a good ship spotter it became hard to maintain interest in shipping. But recently the ship spotters were jolted by new acquisitions especially since many are actually brand-new. The FastCat series started this trend and was followed by the Starlite series. Many other shipping companies are quickening their acquisitions including in High Speed Crafts and Medium Speed Crafts (MSCs). Competition drives many of these new acquisitions. But in the case of Island Water and Shogun Shipping theirs is trying the waters their own way.

These developments happened in the backdrop of the development of a new paradigm, the Cargo RORO LCTs which take rolling cargo away from the overnight ferries and the short-distance ferries. There are many shipping companies now in this sector and the LCTs involved here are nearing the two dozen mark. Like when the container ships first arrived, the operation of a Cargo RORO LCT is simpler than that of a ferry and they are wanted as suddenly they became the solution to the second-class treatment of trucks in ferries.

At the moment these new developments are beneficial to the passengers, car owners and truckers/shippers as there had been a lowering of rates in some routes and places. Plus there are more options and schedules now.

MARINA (Maritime Industry Authority), the regulatory body of the government with regards to the maritime sector will always push for the acquisition of new ships in their goal of ship modernization. And they will always think that more is better. And everybody is happy when a new ship arrives.

The question is will this lead to the 3rd surplus of bottoms? Well, it’s a little early to say but we know the shipping companies are still in the acquisition mood and we do not know up to when this optimism will end. The banks are open now for loans unlike before and the series of FastCats which can sail for as long as they want and the Starlites are not yet finished in arriving. Ferry companies have also discovered China sources now both in brand-new and surplus.

What is the antidote to a surplus of bottoms? That is the threat of MARINA to cull old ships, most of which are still running reliably and many of their companies have no record of losing a ship. Almost all are opposed to this and MARINA knows that. That is also not popular to the public as we are sentimental of our old ships.

We will have to see how this episode plays out.


The Biggest Passenger-Cargo Ship in the Philippines in the 1930s

The 1930s was a golden era for Philippine passenger shipping. There were a lot of passenger-cargo ships that came and local shipbuilding was also in its peak. We benefited from World War I when demand for abaca, copra and coal went through the roof and it spurred shipbuilding and trading. The development of the internal-combustion engine also greatly helped that.

The Great Depression of 1929 of the US came but did not affect our shipping and shipbuilding, in the main. What were affected were the US producers being competed by our duty-free copra and abaca and so they were in favor of letting the Philippine Islands (that was what our country was called then) go. That was why our “independence missions” then were successful. However, their industrialists continued to covet our mineral resources and protect their industries here.

SS Mayon, Pier 3, Manila, Philippines, preparing to leave for Mindanao and way ports south, August 22, 1933

Copyright: Board of Regents of the University of Wisconsin System. Posted by John Tewell.

From small liners with just a few hundred gross register tons and whom about half were wooden-hulled, in the years leading to 1930 many steel-hulled liners of nearly a thousand gross register tons or more came. And for the first time, new-builds became commonplace and it was the La Naviera Filipina (the merged shipping company of the Escanos and the Aboitizes) and De la Rama Steamship that led this charge assisted by the independent Aboitiz & Company, Inc.

For the first time, the highest of the totem pole of local shipping being held by Madrigal & Co. and Compania Maritima was being challenged. It was De la Rama Steamship that had the big ships that could challenge the Top Two. La Naviera, meanwhile, have smaller ships but more numerous and the size was understandable because their route is primarily the Central Visayas and they do not do the southern Mindanao route which needs bigger ships.

However, the biggest passenger-cargo ship in the local routes then did not belong to any of the four if our oceangoing liners which are mainly cargo ships with a few passengers are excluded (those were Madrigal & Co. ships). The honor belonged to the Philippine Interisland Steamship Co. with its liner SS Mayon which was acquired in 1930.  The Dollar Steamship Co. of the US was the leader in bringing about this great liner to our waters.

SS Mayon, loading an automobile for a trip to Mindanao and way ports south, Manila, Philippines, August 22, 1933

Copyright: Board of Regents of the University of Wisconsin System. Posted by John Tewell.

The SS Mayon, a brand-new ship was considered the most luxurious of its time that President Quezon even sails with it. Now, I will let the Philippines Herald tell her story:

“Known as the most luxurious ship in the interisland service, the Mayon was built in 1930 by Vickers-Armstrong, Ltd., In Barrow, Great Britain, for the Philippine Interisland Steamship company. She is classified as 100-A1 by Lloyd’s, the highest classification for ships.

A twin-screw turbine ship, she is of 3,371 gross and 1,529 net tons. She is 347.5 feet long, 50.4 feet wide and 16.3 feet deep. She is capable of a speed of 21 knots, and is equipped with refrigerating machinery.

The Mayon arrived from Glasgow on October 28, 1930, and left on her maiden voyage in Philippine waters six days later. The late Captain Robert Dollar, known as the Grand Old Man of the Pacific, came to the Philippines with Mrs. Dollar to inaugurate the service. Captain and Mrs. Dollar were among the passengers on the maiden voyage of the Mayon to the southern islands.

The Mayon has been used on the Manila-Iloilo-Zamboanga-Cebu run on a weekly schedule, sailing from Manila on Tuesday afternoon and returning on Sunday morning.”

In metric measure, SS Mayon is 105.9 meters in Length Over-all and 15.4 meters in Breadth.

However, the SS Mayon was not making that much money and Dollar Steamship also has its problems including the death of its founder. To save the ship which was the pride of the Philippine merchant marine, the Philippine Government acquired the ship and assigned it to the Manila Railroad Company and one would ask what is a railroad company doing in shipping.

S. S. Princes of Negros and S. S. Mayon at wharf, Iloilo, Philippines, Aug. 23, 1933

Copyright: Board of Regents of the University of Wisconsin System.

Well, the Manila Railroad Company, the predecessor of Philippine National Railways operated ferries to connect the passengers of their Bicol Line to their South (Luzon) Line. The government especially President Quezon has long been beneficent to the Manila Railroad Co. that they and he also allowed it to operate liners. Well, that service was needed also by the people.

In 1940, the nascent Manila Steamship Co. Inc. acquired the SS Mayon. During that time Manila Railroad Company was already beginning to divest from shipping especially since the South Line and Bicol Line of the company was already connected. It is to the Manila Steamship Co. of the Elizaldes that the Ynchaustis transferred their shipping company to fight in the Spanish Civil War as a matter of principle.

I was in wonder retrospectively how come the Philippines was still investing heavily in shipping when World War II was already raging in Europe. We thought that the Japan Empire will be intimidated by the combined American, British and Dutch forces?

And so war came in December of 1941 and we were immediately in crisis especially after the US Asiatic Fleet abandoned us and hied off to Australia. With that the US Army Transport (USAT) otherwise known as the PI Support Fleet was formed with 25 ships, almost all of whom were passenger-cargo ships and they ferried troops, materiel, government personnel, government records, currency, gold, silver and many other things.

The ship Mayon used as Sinulog prop

A drawing of SS Mayon used as prop in Sinulog. Photo b Mike Baylon of PSSS.

This fleet had no air support as US aircraft was also withdrawn from the Philippines and the Japanese invaders had complete control of the sky. SS Mayon’s luck ran out on February 2, 1942 when Japanese warplanes caught her in Butuan Bay. She was strafed and bombed and she sank, a piteous fate for one who was formerly the Queen of our seas.

After the war, in 1946, the Manila Steamship acquired a ferry to replace her with the same name SS Mayon. She was almost as big as the original and had a certain resemblance to her. However, she was not a new ship and was even older than the ship she replaced. But I will stop here now as that ship deserves a separate story.



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).


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.


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.


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.


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.

1961 1213 MV Gov Benito Lopez

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.


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).


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.


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.

1971 MV Samar

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.


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.

Legaspi 1

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.

In The Middle of the 1960’s We Needed New Liners and Europe Filled That Need And Not Japan

With the exception of De la Rama Steamship Company, the Philippine liner shipping companies that were born or resurrected after World War II were dependent on the former “FS” (for Freight and Supply) ships from the US Navy. That type of ship was the backbone of our postwar passenger fleet; it was also the most numerous. One reason for that was so many of that type was built during World War II and most were deployed in the Pacific Ocean campaign of the US. Having to pay for the Philippine prewar ships they requisitioned for the war effort that type became the most common replacement given by the US together with the former “F” ships. Aside from direct replacement, the US also had to dispose so many of them and instead of bringing them back to the US where they have no use of them, many were just given to the Philippine government as aid and reparations. The Philippine government then put them up for sale at near-bargain prices (about $60,000 only; where can you get a ship that cheap?). Of course, as always, political considerations mattered and so those who have political connections had the inside track in the purchase of these vessels.

Many of the Philippine liner shipping companies were so enamored with these former “FS” ships that they practically purchased no other vessel type for the next twenty years after the war. Among those were William Lines Incorporated, Southern Lines Incorporated (they also had former “F” ships too) and General Shipping Corporation. In other liner shipping companies’ fleets like that of Philippine Steamship Navigation Company/Everett Steamship, Hijos de F. Escano Incorporated and Manila Steamship Company, the former “FS” ships were in clear majority. Even in the venerable Compania Maritima’s fleet half of those were former “FS” ships. Meanwhile, half of fleet of Madrigal Shipping Company was composed of former “Y” ships which were related to the former “FS” ships. These were former tankers converted into passenger-cargo ships. There was no Negros Navigation Company route then yet to Manila. What had a route then to Manila was the small Ledesma Shipping Lines. Negros Navigation Company became a liner company when they and Ledesma Shipping Lines merged.

Being “enamored” with former “FS” ships also had a reason. They were cheap and while they may be basic sea transportation, the passengers were willing to put up with its deficiencies. And for whatever deficiency, sometimes good food is enough to make passengers overlook it. And so whenever a former “FS” ship becomes available in the market the liner shipping companies readily snapped it up. That goes true even for the fleet of the shipping companies that quit the shipping business like Manila Steamship in 1956 (along with some much smaller shipping companies).

The future great Carlos A. Go Thong & Company was not among the recipients of ships from the US as reparation. Their first ships were salvaged “F” ships that they bought. They only had their first ex-”FS” ships when they bought out the Pan-Oriental Shipping Company of the Quisumbings of Mandaue which then went into motorcycle assembly (the Norkis-Yamaha concern). Like Go Thong, the style of the other smaller passenger liner shipping company was to lengthen the hull of the former “F” ships so these will be “FS” ships equivalent. That was the origin of the first flagship of Go Thong, the Dona Conchita. However, some other small liner shipping companies which did not have enough capital or were just sailing minor routes simply sailed straight their small ex-”F” ships. Some other were also using converted minesweepers and PT boats. Many of the shipping companies in regional routes were using converted “F” ships and converted minesweepers.

These former “FS” ships like the other war surplus ships from the US like the “C1-M-AV1” ships were classified as “passenger-cargo” ships. Obviously, they carry passengers and cargo but it actually has a deeper meaning. In those days, passenger liner shipping companies don’t normally operate pure cargo ships like these recent decades. It is actually these passenger-cargo ships that carry the bulk of cargo in the inter-island route in liner operations (which means there is a fixed route and schedule). The passenger capacities of the ships then were small (there were no 1,000-passenger capacity liners then yet and tops then was just about 700 passenger capacity and normal was just about 300). What was more prized then sometimes were the cargo holds of the ships. Handled by booms (there were no container vans yet) the interport hours were long and departures especially in the interports were not prompt. As long as there is cargo to be loaded, the ships would not leave. Unloading of cargo then in the interport can already take several hours and with so many interport calls the longest-distance ports like Davao takes one week to be reached.

In the mid-1960’s the workhorse fleet from former US Navy ships were already long in the tooth. There were no more of that type to replace the hull losses and our population and trade was growing. Mindanao too has already experienced great migration from the Visayas and so migrants had to travel and goods had to be exchanged. Obviously there was a need to refleet or add to the fleet. The only company that was still able to acquire former “FS” ships from the US in the 1960’s was the newly-established Philippine President Lines, a shipping company well-backed from the highest circles of government. Most of what they were able to acquire were former “AKL” ships of the US Navy. These were former “FS” ships retained by the US Navy after the war and refurbished for use in supplying the many scattered islands and bases of the US in the wide Pacific Ocean. These ships were among the last of its type released by the US.

Some liner shipping companies which had easy starts because of political connections, specifically, Southern Lines Incorporated and General Shipping Corporation shirked from the challenge and quit shipping and simply sold their ships. Southern Lines’ ships went to various liner shipping companies while that of General Shipping Company was divided between Aboitiz Shipping Corporation and Sweet Lines Incorporated. Amazingly, this gave birth to two separate events and entities. Once again, Aboitiz Shipping Corporation had a fleet of its own (before they were just a partner in the Philippine Steamship and Navigation together with Everett Steamship of the US; before the war they were partners with Hijos de F. Escano in La Naviera Filipina). The second event and entity was the regional shipping company Sweet Lines Incorporated became a long-distance liner company. General Shipping Corporation, meanwhile, followed another bandwagon and moved into foreign routes using ships chartered from the National Development Corporation of the Philippine government. It was not difficult for them because they were well-connected politically.

Since no surplus ships were still available from the US then a new source had to be found. Japan by this time was still building their merchant fleet because these were the years of Japan’s “economic miracle” of galloping growth and so no surplus ships were still available from them at that time. The only logical place to look at would then be Europe as the US as a nearly solid continental country has many locomotives and rail wagons but not passenger liner ships. Before this time Compania Maritima has already shown the way in sourcing surplus passenger-cargo ships from Europe. It was easy for them since they have Spanish origins and connections.

I will start from the companies that made moves in acquiring passenger cargo-ships from Europe starting from the one which made a big move. It was the shipping company Carlos A. Go Thong & Co. that was not a recipient of US reparations which took a big gamble in acquiring passenger-cargo ships from Europe. I don’t know but maybe there should not be a great deal of surprise there as they did not get any favors from the US or the government before which means they will have to pull their own bootstraps up themselves if they want to move up. And over a period of six years until 1969 they acquired a total of 9 European passenger-cargo ships for local waters (the Gothong, Dona Pamela, the Dona Gloria, Tayabas Bay, the Dona Rita, the Dona Helene, the Don Lorenzo, the Don Camilo and the first Don Sulpicio. Aside from the nine, Go Thong was able to acquire the big ships Subic Bay, Manila Bay and Sarangani Bay. The first two were C1-A ships of US built but acquired from Europe while the last was a former ship of De la Rama Steamship. Also acquired in the same period was Dona Anita, the former Governor B. Lopez of Southern Lines which has airconditioning and the Dona Hortencia, a former Northern Lines ship of Japanese origins.

Three of these ex-European ships were former refrigerated cargo ships and that means a lot because with refrigeration facilities then Go Thong can then build First Class sections, lounges and restaurants that have airconditioning. So cold drinks will be available anytime too (when the bulk of Filipino homes don’t have refrigerators yet) along with the capacity to carry loads that should remain frozen or chilled. These things were simply not possible with the ex-”FS” ships and besides these former ships from Europe were bigger, a little faster and they have big cargo holds which means more capacity for generating profitable runs. With 14 ship acquisitions Go Thong was already more than Compania Maritima in the inter-island routes before they broke up in 1972 even though they are using their big ships to Europe and the Far East.

For a major, William Lines Inc. had a rather tepid response. They only acquired two surplus ships from Europe (the sister ships Virginia and Zamboanga City, the first) in the mid-1960’s but they bought two former “FS” ships (the Dona Maria and Don Jose) let go by the other liner shipping companies (yes, they have a definite liking for that). The new liner company Sweet Lines Inc. acquired only one surplus passenger-cargo ships from Europe in this period (the Sweet Bliss) and that is understandable as they were just a new liner company. However, they also bought two passenger-cargo ships discarded by the other liner companies (these were not former “FS” ships).

Meanwhile, Aboitiz Shipping Corporation, at the same time did not purchase any passenger-cargo ship from Europe. But in Philippine Steamship Navigation Company (PSNC) they had three passenger-cargo ships which has airconditioning and refrigeration which only arrived in 1955 (The Legaspi, Elcano and Cagayan de Oro). In effect, for them this is their equivalent of the passenger-cargo ships from Europe. The Philippine President Lines and its successor company for local routes Philippine Pioneer Lines purchased only one passenger cargo ship from Europe (the Aguinaldo) as they were already concentrating on their international routes (and that ship was soon passed to their foreign operations). In fact, they soon transferred their local operations to their subsidiary Philippine Pioneer Lines.

Special note should be given to two liner shipping companies that took a different tack and the higher road — those that purchased brand-new liners instead of surplus. One of them was Hijos de F. Escano (later known as Escano Lines). What they did was to take out loans and they ordered three brand-new passenger-cargo liners from West Germany which already had airconditioning. These are the Fatima, Agustina II and Fernando Escano II. Negros Navigation Company, meanwhile, which is establishing itself as a liner company outdid them and took a different supplier. They ordered brand-new liners with airconditioning starting in 1962 which was followed by one each in 1965 and 1967. Those ships were the second Princess of Negros, the Dona Florentina and the beautiful Don Julio, the second. The difference was they ordered their liners from Japan except for the first which was ordered from Hongkong.

Compania Maritima also ordered one brand-new liner with airconditioning from West Germany, the Visayas. Compania Maritima also acquired two big cargo-passenger ships from De la Rama Steamship, the Lingayen Gulf and the Sarangani Bay. They also acquired a local-built liner from General Shipping Corporation that had already airconditioning which they renamed as the Mactan. As a footnote, Sweet Lines Inc. also ordered one brand-new liner from West Germany, the Sweet Grace which for me was rather surprising for a new liner company given that older but more “conservative” liner companies did not go into this direction.

Among those that did not make moves were Madrigal Shipping Company and De la Rama Steamship, two formerly revered names in shipping. Madrigal Shipping Company were then already disposing ships either to the breakers or to other companies. Among the local liner shipping companies, they, together with the already-defunct-then Manila Steamship Company had the penchant for buying really old ships from Europe before and so its expected life is not long. Moreover, Madrigal Shipping Company was by this time already losing in their quixotic routes to Northern Luzon and Northern Bicol and it was just practically using the remaining life of the ferries they have not disposed off. They had only one ship acquired from Europe in this period that they did not immediately dispose of and this was the Viria. Like the rest of their acquisitions this was small because their routes were minor compared to the rest. Hence, this acquisition was not comparable to the European acquisition of the others.

Meanwhile, De la Rama Steamship at the middle of the 1960’s was beginning to function just as international shipping agents. They have already disposed then of almost all their ships including those chartered from the National Development Corporation and they have long disposed of their former “FS” and “F” ships. Two of their big ships went to Compania Maritima in this period.

The smaller passenger liner companies with lesser routes and revenues proved incapable of moving up to the European category of ships, brand-new or surplus. However, four upstart companies tried to join this trend. The new Dacema Lines Incorporated was able to purchase two old passenger-cargo liners from West Germany in 1967, the Athena and the Demeter. The new E. K. Litonjua Steamship Company Incorporated/Eddie Steamships (Philippines), Incorporated was able to do likewise with three old passenger-cargo ships from various countries, the Sultan KL, the Aurelio KL and the Eddie KL. Another upstart, the Northern Lines Incorporated was able to acquire two passenger-cargo ships in this period (along with cargo ships), the Don Salvador and the Don Rene and surprisingly the source of their ships was Japan. Another newcomer, the MD Shipping Corporation was also able to procure a surplus passenger-cargo ship from Norway, the Leon. Except for the Northern Lines ships the ship mentioned did not really last long because they were already old when they can here.

These moves or non-moves determined the fate of the liner shipping companies for the next ten years. With the bold move of Carlos A. Gothong & Co. they moved up fast in the totem pole of the local liner shipping companies that by the start of the 1970’s they were not only barking at the heels of Compania Maritima but has already achieved parity or were even slightly ahead already in the inter-island routes. On the other end of the pole those that did not acquire any or practically had no acquisition were already gone from the inter-island routes in the next ten years and this included Philippine Pioneer Lines and the successor company Galaxy Lines. Madrigal Shipping Company by then had also disposed of almost of their ships and had almost no more ships sailing. The ships of the two companies many of which were ex-”FS” and ex-”Y” ships went to minor liner companies NCL/NORCAMCO Lines (the former North Camarines Lumber) and N&S Lines.

All these moves or non-moves in the middle of the 1960’s determined the fate and the positions of the liner shipping companies from the late 1960’s to the early 1970’s. Go Thong, a relative newcomer in liner shipping moved up a lot in liner shipping tier with their big acquisition. The liner shipping companies that made enough acquisitions in the mid-1960’s chugged along and generally did not lose rank for the next decade, relatively. Among these were Compania Maritima, William Lines Inc., Sweet Lines and Escano Lines. Philippine Steamships and Navigation Co. declined. The ex-”FS” ships were no longer as competitive in the 1970’s and the “C1-M-AV1” ships did not prove resilient and the the Type N3 ships even less durable. Negros Navigation Company was on the way up as they have new ship. The smaller liner companies that were still dependent of ex-”FS” ships (and the related ex-”Y” ships) and the ex-”F” and former minesweepers and were not refleeting were already on the way down. That included Bisayan Land Transport, NORCAMCO, N&S Lines, Rodrigueza Lines and many other small operators.

As recap, twenty years after our inter-island fleet basically relied on war-surplus ships from the US, the first augmentation we had were ferries sourced from Europe as ships from Japan were still rare in the mid-1960’s because they were in the midst of their own economic boom. Up to the end of the 1960’s and early 1970’s we will still source liners from Europe (like the legendary Sweet Faith). It will in the next decade when Japan will be our main supplier of surplus passenger ships.

So from war-surplus ships from the US in the end of the war and up to early 1960’s to European surplus ships in the 1960’s to Japan surplus ships in the 1970’s – these were what marked the early periods of our postwar liner shipping, the period most people now are no longer aware of. This article seeks to fill that void.

[Photo Credit:]