The First “Great” Merger: The Failed Saga of WG&A and CFC

When WG&A was formed it was ostensibly to combat the entry of foreign shipping companies on local inter-island routes. That was the time of many so-called “deregulation” initiatives of Fidel V. Ramos. But even then I had doubts about this as an cabotage law was in effect in the Philippines. Cabotage effectively prevents foreign shipping companies from plying local routes. And to repeal it an act of Congress is needed and I heavily doubted then that the Philippine Congress will go along with that.

It is generally accepted that it was Aboitiz Shipping that proposed this big merger. Rumors had it that the biggest shipping company, Sulpicio Lines, which was also Cebu-based was also invited but it refused and preferred to go it all alone.

The merger brought together the second, third and fourth-biggest shipping companies in the Philippines reckoned by passenger and cargo operations out of a total of five long-distance liner companies (but may I note which is in fourth place might be disputed by Negros Navigation). It had the effect of lowering the number of long-distance passenger shipping companies from five to three.

The merged company and its subsidiaries were the biggest shipping combine that ever existed in the Philippines in terms of fleet and in terms of route network. It significantly brought to that Visayas-Mindanao and intra-Visayas routes and High Speed Craft(HSC) operations. For the former, the Cebu Ferries Corp. (CFC) was formed and for the latter SuperCat was retained.

Brought into the merger were the following ferries (including their former routes):

WILLIAM LINES INC.
Mabuhay 1 (Manila-Cebu and Manila-Iloilo)
Mabuhay 2 ((Mnl-Surigao-Butuan-Tagbilaran-Mnl and Mnl-Tagbilaran-CDO)
Mabuhay 3 (Manila-Davao-Dadiangas-Manila and Manila-CDO-Iloilo-Manila)
Mabuhay 5 [after a few voyages permanent fielding overtaken by merger]
Dona Virginia (Manila-Dumaguete-Ozamis-Iligan v.v.)
Maynilad (Manila-Zamboanga-Davao)
Masbate I (Manila-Masbate-Catbalogan-Tacloban)
Zamboanga City (Manila-Puerto Princesa v.v.)
Tacloban City (Manila-Batan-Dumaguit-Dipolog v.v.)
Iligan City (Cebu-Iligan v.v.)
Misamis Occidental (Cebu-Ozamis v.v.)
Mabuhay 6 [unfinished]

CARLOS A. GOTHONG LINES INC.
Our Lady of Akita (Manila-CDO-Butuan v.v. and Manila-Cebu v.v.)
Our Lady of Medjugorje (Manila-Dumaguete-Ozamis-Iligan-Cebu v.v.)
Our Lady of Sacred Heart (Manila-Roxas-Palompon-Isabel-Cebu v.v.)
Our Lady of Lourdes (Manila-Dumaguit-Palompon-Cebu v.v.)
Our Lady of the Rule (CDO-Cebu v.v. and CDO-Jagna v.v.)
Our Lady of Naju (Cebu-Ozamis v.v.)
Our Lady of Fatima (Nasipit-Cebu v.v. and Nasipit-Jagna v.v.)
Our Lady of Mt. Carmel (Iligan-Cebu v.v. and Iligan-Dumaguete v.v.)
Our Lady of Guadalupe [reserve/unreliable; formerly Cebu-Surigao v.v.]
Our Lady of Lipa (Cebu-CDO v.v.)
Dona Cristina (Cebu-Tacloban v.v. and Cebu-Palompon v.v.)
Dona Lili (Cebu-Surigao v.v. and Cebu-Maasin v.v.)
Don Calvino [reserve/unreliable; formerly Cebu-Iligan v.v.]
Our Lady of Akita 2 [unfinished]

ABOITIZ SHIPPING CORP.
SuperFerry 1 (Manila-Iloilo-GSC-Davao v.v. and Manila-Iloilo v.v.)
SuperFerry 2 (Manila-Cebu-CDO v.v.)
SuperFerry 3 (Mnl-Zamboanga-Cotabato v.v. w/ Boracay (summer) and Mnl-Dumaguit-Roxas v.v.)
SuperFerry 5 (Mnl-Cebu-Iligan-Dumaguete-Mnl) and Mnl-Dumaguete-CDO-Cebu-Mnl)
Elcano (was not used; obsolete/unreliable; supposedly not brought by ASC to the merger)
Allowing for database inaccuracies, the following cargo ships were brought to the merger:

CARLOS A. GOTHONG LINES INC.
Our Lady of Peace (112.9m x 18.0m, 17kts, b. 1974)
Our Lady of Hope (99.0m x17.3m, 17kts, b.1979)

ABOITIZ SHIPPING CORP.
Aboitiz Concarrier V (69.0m x 10.9m, b. 1968)
Aboitiz Concarrier XIV (71.0m x 10.9m, 13kts, b. 1965)
Aboitiz Superconcarrier I (115.1m x17.3m, 14kts, b. 1970)
Aboitiz Superconcarrier II (102.0m x 16.3m, 12.5kts, b. 1970)
Aboitiz Superconcarrier III (105.5m x16.3m, 12.5kts, b. 1976)
Aboitiz Megacarrier 1 (139.7m x 19.3m, 14kts, b. 1975)
Aboitiz SuperRORO 100 (108.2m x20.0m, 16kts, b. 1983)

WILLIAM LINES INC.
Wilcon II
Wilcon 4
Wilcon 5
Wilcon VI
Wilcon VII
Wilcon 8
Wilcon 11
ROCON I

Excluding HSCs which were just beginning to arrive in the Philippines, the combined fleet of WG&A was nearly 50 vessels, slightly more than double the fleet of Sulpicio Lines, previously the biggest shipping company in the country.

SHIP TRANSFORMATIONS AFTER THE MERGER
Mabuhay 1 became SuperFerry10
Mabuhay 2 became SuperFerry 7
Mabuhay 3 became SuperFerry 8
Mabuhay 5 became SuperFerry 9
Mabuhay 6 became Our Lady of Good Voyage
Our Lady Akita became SuperFerry 6
Our Lady of Akita 2 became SuperFerry 11 (and later the Our Lady of Banneux)
Masbate I became Our Lady of Manaoag (in 1998)
Misamis Occidental became Our Lady of Montserrat (in 1997)

VESSELS TRANSFERRED TO CEBU FERRIES CORP.
Our Lady of Lipa (later transferred to WG&A)
Our Lady of the Rule
Our Lady of Lourdes
Our Lady of Fatima
Our Lady of Mt. Carmel
Our Lady of Guadalupe
Dona Cristina
Dona Lili
Don Calvino
Misamis Occidental
Our Lady of Good Voyage (later)
Maynilad (later and also renamed Our Lady of Akita 2)
Our Lady of Banneux (later)
Our Lady of Manaoag (later)

Like all mergers and acquisitions (M&A), the terms “synergy”, “rationalization” and “streamlining” was bandied about as if these terms are positive terms in business. But soon these words brought chills to the rank and file because the sum of the 3 words is actually only one — “chopping block”. This is the field of bean counters where shipping passion is simply thrown out of the window.

Immediately, the Aboitiz Jebsens system was adopted. That means relying on bigger, faster ROROs and short in-port hours which equates to high utilization of ships. That called for good ship engines, a field of expertise of the now-renamed WG&A Jebsens. That system, however, also meant the death knell for the cruiser liners as their cargo booms meant long in-port hours and their having no car decks means low capacity for container vans.

The new style was to put all cargo in container vans and all container vans are mounted in trailers. For fast handling, tractor heads from trucks were no longer good enough. Only dedicated, automatic prime movers with the capability to raise the trailers were used. Calls on in-between ports generally were only 2-3 hours and ships don’t stay overnight at the farthest port of call of a voyage.

With so many ROROs sailing high hours per week (with some ships sailing 145.5 hours out of a 168-hour week), WG&A was confident it could sell less-efficient and slower ropax and container ships without affecting capacity and frequency. Soon some of the vessels were already for sale.

VESSELS SOLD SOON AFTER THE MERGER
Tacloban City (cruiser)
Iligan City (cruiser)
Dona Cristina (slow, small RORO)
Don Calvino (slow, small, unreliable RORO)
Dona Lili (slow, small RORO)
Wilcon 6 (old cargo ship)
Aboitiz Concarrier V (old cargo ship)
Aboitiz Megacarrier 1 (big, modern container ship)
Aboitiz SuperRORO 100 (big, modern container ship)
RoCon I (big, modern container ship, the biggest in the country)

VESSELS OFFERED FOR SALE BUT NOT SOLD THEN
Dona Virginia (cruiser liner)
Maynilad (big but slow RORO liner)
Zamboanga City (ROLO liner)
Our Lady of Naju (cruiser)
Masbate I (slow, small RORO)
Our Lady of Montserrat (cruiser)
SuperRORO 300 (former Our Lady of Hope, container ship)

With WG&A Jebsens managing the fleet, the merger upgraded the amenities, cleanliness and passenger service of the ferries. But initially all meals were for sale; vehement protests from patrons thereafter forced WG&A to backtrack. It was also claimed that safety standards improved as the whole fleet is now internationally-certificated. However this was not reflected in lower hull-loss rates. Ironically, it was the lesser Our Ladies (and not the SuperFerries) which proved to be unsinkable.

WG&A and CFC practiced branding. Branding is good in the sense that it promises consistent quality and service. On the other hand branding also utilizes ads and promotions. If that results in better market share then it should be good. Otherwise it only means higher level of costs. And higher costs are a threat to marginal routes and to less-efficient ships.

Initially, even with a fifth of their fleet sold (and with only one additional ship coming, the SF12 and while losing the SF7 to fire), WG&A was able to offer more frequencies because of the higher utilization of ships. But almost no new ports of call were added except for Bacolod. And probably the only significant new routes were the Manila-Cebu-Surigao-Davao (which passes through the eastern seaboard of Mindanao), Manila-Ormoc-Nasipit, Manila-Dumaguete-Cotabato and Manila-Cebu-Zamboanga-General Santos/Davao routes.

It was Cebu Ferries that added more new ports of call and routes (like Cebu to Dumaguit, Roxas City, Bacolod, Dumaguete, Larena, Jagna and Camiguin and Cagayan de Oro to Dumaguete) which in turn put a lot of pressure on the other Cebu shipping companies. CFC ships were faster than the competition and as former liners they simply outclassed the rest in terms of amenities and service.

Sulpicio Lines and Negros Navigation responded by adding ships. Sulpicio Lines basically kept to their old routes (except for the new Manila-Cebu-Davao-Dadiangas route) but Negros Navigation which previously concentrated only in Western Visayas has to venture in a lot of new routes and ports of call because their fleet more than doubled in a span of a few years. But then by sailing to Cebu, Nenaco also opened their former exclusive port of Bacolod to competition and they lost more than they gained.

This period right after the merger, the late 90s, was probably one of the best in Philippine passenger shipping. Competition was fierce, choices were many and there were a lot of newly-fielded ships. There were more shipping companies in the past but the ships of the 90s were far better than the ships of the earlier periods. In major ports there were nearly daily departures from all the liner companies combined.

But they say good times never really last. But I didn’t expect that the decline will be that soon, that fast, that continuous and what will be left is just the rump of the biggest-ever shipping company in the Philippines.

The first hint of trouble that I detected was when I noticed that WG&A was not properly assessing the threat, challenge and development of the intermodal system in Eastern Visayas which was then growing by leaps and bounds.

If Fidel V. Ramos had a deregulation program in shipping he also had a deregulation program in the bus and truck sectors. As deregulated area, bus companies can now ply Eastern Visayas routes with just a temporary operator’s permit. Soon a lot of buses were plying the Samar-Leyte-Biliran routes. Then the dominant short-distance RORO company in the Matnog-Allen route lost the case to protect their missionary status and new players entered that route ensuring that the ROROs needed will always be there. Long-distance trucking also developed with the loosening of the restrictions in the importation of surplus trucks. And with the advent of radial truck tires long-distance trucking became easy.

WG&A’s response was to withdraw from the Samar-Leyte routes except for the adjacent ports of Ormoc, Palompon and Isabel which actually comprises just one route. But soon under pressure from the buses these were lost too including the port of Masbate City which was also part of this route. Soon the islands of Masbate, Samar, Leyte and Biliran were lost to the intermodal trucks and buses.

Eastern Visayas was a signal victory for the intermodal system which was based on long-distance truck/bus plus the short-distance RORO ship. Wins by the challengers tend to have a multiplier effect. They become stronger, bolder and more confident. If the ship can be beaten in one area then nobody can pooh-pooh anymore that they will not be beaten in the next area of confrontation. And the next challenge probably happened before the WG&A has fully internalized their loss and it happened when they were in relative disarray.

A related development at this time was that WG&A’s new routes failed to stick and only the Bacolod route was able to survive. The new CFC routes also failed to pan out and were being abandoned one by one. One contributory factor for CFC’s retreat is fuel cost. The amenities and service of their ships might have been higher as those were former liners but as former liners it is also the reason why their engines are bigger and consume more fuel. Soon WG&A/CFC were selling ships. This was the second set of disposals and it happened at about the turn of the millennium. Also disposed in this period were at least six catamarans including vessels that came from mergers in the High Speed Craft (HSC) sector (the mergers with the Sea Angels of Negros Navigation and Waterjet).

At the same proximate time, it was already the strategy of WG&A to sell old and inefficient cargo ships and just let the ROROs liners carry the container vans. They then went for bigger ROROs later with twin cargo decks, the reason for the purchases of the SuperFerry 15, SuperFerry 16, SuperFerry 17 and SuperFerry 18.

The next challenge did not come from the intermodal. Rather it was the withdrawal of the Gothong family from the merger except for one scion. Soon the Gothong family re-entered the shipping business and re-established Carlos A. Gothong Lines Inc. (but they were not particular successful). Not long after this development the Chiongbian family (of William Lines) also withdrew from the merged company. But they did not re-enter the shipping business. Let it be noted, because it is important, that all the merged shipping companies independently retained their cargo forwarding businesess. For the Chiongbian family it was the Fast Cargo Transport Corp.(FCTC) and Gothong Cargo Forwarding Corp.(GCFC) for the Gothong family.

One can speculate that the sale of 10 vessels in 2000-02 (including those withdrawn from routes and old container ships) might somehow be connected to these withdrawals. When the company also took out a big loan in this period ($18.6 million) it might also have a relation to this state of affairs. Before the end of 2002, Aboitiz had already bought out its former partners. But it will still be later that the company will be renamed Aboitiz Transport System (ATS).

The next challenge came from the intermodal again. In 2003, the Western Nautical Highway opened and buses, trucks and jeeps were able to roll down to Panay island via Mindoro and Batangas. Soon the shipping routes and shipping companies serving Panay were under great pressure. Again, WG&A chose to withdraw (from Dumaguit and Roxas) and just tried to hold on to Iloilo port.

The opening of the Western Nautical Highway and the consequent withdrawal from routes, the withdrawal of the Chiongbian family and the need for new ROROs provoked a massacre of ships in this period as about 15 ships were disposed in the years 2003-06, both from WG&A and CFC, both ROPAX and container ships. It must also be noted that six catamarans were also sold in this period. WG&A was lucky that at this time world metal prices were peaking. If it hastened the disposal of ships I can say it is probable. Let me state that in the late 1990’s when all three families were still in WG&A, the company did not sell to the breakers, in general. In the first half of the first decade of the new millennium WG&A sold heavily to the breakers especially when world metal prices were peaking.

Attracted by the doubling of world metal price in 2007, WG&A then sold their prized ferries Superferry 15, SuperFerry 16, SuperFerry 17 and SuperFerry 18 to foreign liner companies.In the process they earned a windfall. But this is not without cost as they suddenly lacked the ships needed to carry the container vans. As a stopgap measure WG&A chartered 3 container ships, the “Myriad”, “Markella” and “Eponyma”. They then also converted SuperFerry 2, SuperFerry 9 and SuperFerry 12 into twin-cargo-deck ROPAX ships. Later the subsidiary cargo company 2GO was formed and the chartered ships were returned one by one.

At about the same time, in 2007, a very ominous development took place. Aboitiz partnered with MCC Transport of Singapore, the Asia subsidiary of the A.P. Moller – Maersk Group, the biggest container shipping company in the world and formed the MCC Transport Philippines (MCCTP). Since it met nationality rules, it was able to ply local routes and the ships invested by Maersk were given special permits by MARINA.

If the chartered ships of ATS and the ships of 2GO were a step up over local competition, the ships that came from MCC Transport were still another further step ahead in terms of size, speed and efficiency. MCCTP acted as feeder to MCC Transport which now dominates the Asia container routes. Together with the coming of more regional container ships (after APL) with direct foreign routes (like MELL, PIL, RCL and others), this completely undermined one important bread and butter of local container shipping which is the transshipment of foreign container vans. ATS and subsidiary 2GO cargo operations might have been affected by this but as a group Aboitiz is safe because they are also on the side of the winners through MCCTP.

After the sales of the four of the biggest and most modern SuperFerry ships in 2007, the fleet of ATS/CFC no longer grew. New ships have come like SuperFerry 20, SuperFerry 21, Cebu Ferry 1, Cebu Ferry 2 and Cebu Ferry 3. But ships have also been sold, lost or laid-up like SuperFerry 9, Our Lady of Medjugorje, Our Lady of Good Voyage, Our Lady of the Rule, Our Lady of Mount Carmel and SuperFerry 19.

With only six ships sailing, ATS ports of call were already down to half compared to its peak and in half of these ports the frequencies were down to once a week. CFC ports of call were also down to half and its fleet is less than a third of what it had before. CFC changed its website and no longer claimed it was the biggest Visayan shipping company (which is just a reflection of the truth). The Sulpicio Lines fleet was already bigger than the combined ATS and CFC fleets. If cargo ships are counted, Sulpicio’s fleet was almost double the combined ATS, CFC and 2GO fleets.

In 2008, KGLI-NM, the holding company owning Negros Navigation made an offer for Aboitiz Transport System. When the bank financing the take-over bid asked for more collateral the bid collapsed. This take-over bid was news for a long time because of the significance and it dragged. It was here that ATS propagated the canard that shipping is losing to the budget airlines and it obscured the fact that cargo is the lifeblood of shipping. Ironically it is this same year that regional container ships in Philippine ports multiplied. And not once did I notice Aboitiz discussing its shares in MCC Transport Philippines. But at least the Aboitiz group was frank enough to admit that the business of power generation attracts them more and that they are already heavily investing in it and if ATS is sold it will be one of their primary investment areas.

In 2010, with the assistance of the ASEAN-China Fund, Negros Navigation Company was finally able to secure the deal to buy Aboitiz Transport System and its subsidiaries especially Cebu Ferries Corporation, SuperCat and 2GO, the forwarding company. At its end as an Aboitiz company, ATS, CFC and 2GO had only 9 ROPAX ships and 2 cargo ships sailing which is not any bigger in gross tons than the company it merged in WG&A even if the SuperCats are counted. So in effect that means the bigger William Lines and Gothong sank without any replacement.

Aboitiz always says around that it has already gotten out of shipping and the maritime industry. But they completely obscure the fact that they are still in MCC Transport Philippines (MCCTP) and they completely own now the former Aboitiz Jebsens (renamed back when the Gothong and Chiongbian families withdrew from WG&A). The former Abojeb is in crewing and manning and that is one of the five recognized sectors of the Philippine maritime industry as defined by the government. MCCTP is already in expansion after Aboitiz sold Aboitiz Transport System. [Recently, Aboitiz clarified that some of their family members are engaged in MCCTP.]

Now, Negros Navigation Company owns Aboitiz Transport System and NENACO even retained the name and the brands. It will be a matter of time before it will be evident how big a bag they are holding.

The “great” merger of 1996 started out with a bang, lofty words and promises. It exited with just a whimper. But along the way it sank two great liner companies (William Lines and Gothong) and took down with it the liner industry.

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The “Seven Sisters”

In the world, there was once what was called as the “Seven Sisters”. These were the biggest oil companies in the world for more than half a century from the 1930’s to the 1980’s when further consolidation happened within their ranks. Five of the “Seven Sisters” were offspring of the forcibly broken-up Standard Oil Company of John D. Rockefeller, the most famous monopolist of the modern era which was hit by anti-trust legislation in the US as it was engaged in practices that restrict free trade. These were Exxon (Standard Oil of New Jersey), Mobil (Standard Oil of New York), Texaco, Socal (Standard Oil of California) and Gulf Oil. The two others were the biggest oil companies of Europe which were Royal Dutch Shell and British Petroleum (BP). Together, the “Seven Sisters” were suspected of collusion in fixing the prices of crude oil and the refined oil products and also in “transfer pricing”. The biggest of the “Seven Sisters” were among the biggest companies in the world in their heydays in the company of General Motors, First National City Bank and General Electric which were held in very high regard for the bigness and in market and financial clout.

In the Philippines, there is also what could be considered a version of the “Seven Sisters” if only for pun. These were the catamaran High Speed Crafts (HSCs) which all came from Macau as the share of Universal of Macau in Universal Aboitiz Inc. The seven catamarans are all sister ships built in Singapore by FBM Marinteknik which arrived in 1995 to 1996 which all but sank the hopes of competition (yes, they were as dominant as the “Seven Sisters” of the oil world). They were not brand-new but they were as good as that. Their names were SuperCat-I (the former Oregrund), SuperCat 2 (former Camoes), SuperCat 3 (former Estrela do Mar), SuperCat 5 (former Lusitano), SuperCat 7 (former Universal Mk. 1), SuperCat 8 (former Magellan) and SuperCat 9 (former Santa Cruz). Formerly, they were used in routes from Macau including Hongkong.

These “Seven Sisters” were the fastest ever to sail Philippine waters in the recent era. Powered by twin waterjets which prevent early cavitation, the seven were all capable of 38 knots sustained. That was almost double of the SuperFerries of the period and more than triple the 11 knots average of the common short-distance ferries then. Early in their careers the passengers marvelled at their very short route transit times like in Batangas-Calapan which just takes them 45 minutes versus the two-and-a-half hours of the regular ferries.

The lengths of the “Seven Sisters” were almost the same and averages 41.5 meters which was more than the average basic, short-distance ferry-RORO (that means they are not really small). Their breadths were all 11.0 meters and their depths between 3.6 to 3.8 meters. The gross tonnages ranged from 449 to 458 while the net tonnages ranged from 151 to 155, all small differences. The passenger capacities, meanwhile, ranged from 306 to 322. But all of them were powered by twin MTU engines with a total of 5,200 horsepower. They were the most powerful High Speed Craft engines ever seen in Philippine waters.supercat-7-marlon-griego

These “Seven Sisters” featured aluminum hulls for lighter weight. All had single masts, raked stems and transom sterns. The sisters had single passenger decks which means they all had low centers of gravity with the pilot house high above that. Aside from the common navigational devices, all had night vision devices, autopilots, joysticks and motion dampening systems. The engine room can also be monitored from the bridge.

Aboard, the passenger compartment featured airline-type seats with seatbelts. There were well-trained stewards and stewardesses to assist the passengers and make them comfortable. There was a perception of space and the passenger compartment floor is carpeted. However, at full speed the hum of the engines were audible (but it was a pleasant hum as they were MTUs) and in exchange of that there is really a perception of speed and great capability in acceleration.

These catamaran High Speed Crafts were fielded in the Batangas-Calapan, Bacolod-Iloilo, Cebu-Ormoc, Cebu-Tagbilaran-Dumaguete-Dapitan (with a Siquijor extension at one time) and Cebu-Maasin-Surigao routes. It was the time when High Speed Crafts were being used from short to long routes that were once done by overnight ferries. The first three routes were successes, the last one was a failure while the fourth was marginal. It was in the shorter routes where the “Seven Sisters” found success.

Along with the SuperCat 6 and SuperCat 10 which were of different designs, these SuperCats were so successful in a very crowded High Speed Craft field that included competitors like the fastcrafts of the Viva Shipping Lines combine, the fastcrafts of Bullet Express, the two High Speed Crafts of Oceanjet, the SeaCats of ACG Express Liner, etc. that their very direct competitors, the Sea Angels of Negros Navigation Company and the catamarans of Water Jet Shipping Company folded and merged with them to form the Philippine Fast Ferry Corporation (PFFC).

Their fielding, however, nearly coincided with the 9/11 attack in the New York City towers and the subsequent launching of the US with retaliatory wars and interventions in the Middle East which slowly but consistently rose the price of oil. With nearly 17 horsepower per person, the highest ratio in local waters, the local “Seven Sisters” soon found their fuel consumption was simply too high. Incidentally, all merged Sea Angels and Waterjets also had the same powerplants as the “Seven Sisters”, the 5,200-horsepower MTUs. Moreover, the waterjets proved a little troublesome for the unclean waters of our ports when trash sometimes get sucked by the waterjets which threw schedules awry (they can’t run well with the waterjets clogged thus voyages were cancelled because maintenance has to be made first).

The Philippine Fast Ferry Corporation then had a policy decision to shift away from waterjets and the thirsty MTU engines. One by one, the merged Sea Angels, Waterjets and the Seven Sisters were sold and all to foreign buyers. By the mid-2000s none of them were left. SuperCat 3, 5, 7, 8 and 9 were sold to Jadrolinija of Croatia while SuperCat-I was sold to Tahiti and SuperCat 2 was sold to South Korea. SuperCat 3 became the Karolina, SuperCat 5 became the Judita, SuperCat 7 became the Novalja, SuperCat 8 became the Dubravka and SuperCat 9 became the Bisovo. Meanwhile, SuperCat-I became the Normandie Express (later as Moorea Express) and SuperCat 2 became the Korea Express. What replaced them in the SuperCat fleet were smaller High Speed Crafts of less power and speed, none were waterjets and some were fastcrafts. Except to that were the trimarans Tricat 50 and Tricat 2.

Later on, there were still some changes of ownership among the “Seven Sisters”. But rest assured all seven are still alive although they are elderly now (they are nearing 30 years of age) and might be nearing their end.

Still, they were fun when they were here. Even to just watch them make their run.

sc7-marlon-griego

Photo Credits: Masahiro Homma, Marlon Griego, Vinz Sanchez, Nowell Alcancia, PSSS

When SuperCat Ruled The Waves

SuperCat as a brand of Aboitiz Shipping Corporation started in the summer of 1994 in the Batangas-Calapan route with the fielding of the SuperCat 1. She was not the very first High Speed Craft in the route as Bullet Express 1 beat her by a day. However, SuperCat immediately made a very big splash and impact. It was super-fast compared to the local ferries and would only take 45 minutes for the 24-nautical mile route when other ferries in the route normally took 2.5 hours. And being a catamaran it made a lot of visual impression. She was also very comfortable considering there no airconditioning in any of the ferries in the route. There was also a smooth and true passenger service. I myself was there in Batangas port when the SuperCat 1 was formally launched and it was impressive.

Bullet Express 1 was also outclassed, overwhelmed and very soon it quit the route because they can’t match SuperCat and they went to the Visayas. Meanwhile, the old kingpin of the area, the Viva Shipping Lines immediately purchased two second-hand fastcrafts of Japan origins from the Sun Cruises of Manila to say they also have a fast one. It charged cheaper but they were not as fast as they took one hour for the route.

However, in about 4 months time, SuperCat 1 met a mishap and was wrecked on the western side of Verde Island soon after MARINA ruled she should take that route (before she took the route east of Verde Island and between the “Mag-asawang Pulo”). She hit an underwater obstacle and the superstructure completely deformed. There were suspicions of sabotage but the investigation ruled it was an accident. Whatever, Aboitiz had already sensed High Speed Crafts (HSCs) will be successful in the Philippines since SuperCat 1 had good patronage and many were impressed. Well, it was peak season when she came (a summer when many are going home) and the Batangas-Calapan route really lacked bottoms then and no ferry there had airconditioned accommodations and good service.

Aboitiz immediately sought a replacement to the wrecked SuperCat 1 and within months a new one arrived in the route and this was named the SuperCat I. Many thought this was a repaired version of SuperCat 1 but actually this was a different ship. Since Aboitiz thought High Speed Crafts will be successful in the Philippines and wants to jump the gun on the others, so to say, it partnered with a Macau operator of High Speed Crafts and the company Universal Aboitiz Inc. was born. In a short time, catamarans started arriving for SuperCat and Aboitiz fielded them to different routes. Aside from the Iloilo-Bacolod route, it based catamarans in Cebu for different routes to the near islands like Leyte (Ormoc), Bohol (Tagbilaran), Negros (Dumaguete) and it even had far routes like Surigao (via Maasin) and it has an extension to Dapitan in Zamboanga del Norte.

With this move for partnership with the Macau concern, Aboitiz was the first in the Philippines to have many High Speed Crafts and in the process they overtook Bullet Express which was backed by combined Zamboanga-Malaysia concerns. In just the years 1995 and 1996, eight catamarans arrived for Universal Aboitiz and they practically swamped their competitors which were also new to High Speed Crafts. These were the Sea Angels of Negros Navigation Company and Waterjet Shipping Company. With Bullet Express, Viva Shipping Lines (and its legal fiction companies Sto. Domingo Shipping and DR Shipping), Royal Ferry, Florinda (RN High-Speed Ferries), Oceanjet (Ocean Fast Ferries), Sea Cat (ACG Express Liner) and a half-dozen other minor operators in the mix, very soon it became a veritable dogfight in the High Speed Craft world here as in matira ang matibay (only the strong will survive).

Not long after, the Sea Angels and Waterjet both gave up and merged with SuperCat. That will happen as there were just too many High Speed Crafts for the passengers willing to pay their higher fares which were double or so the regular ferries. With that suddenly SuperCat had 13 high-speed cats, the SuperCat I, SuperCat 2, SuperCat 3, SuperCat 5, Supercat 6, Supercat 7, SuperCat 8, SuperCat 9, SuperCat 10. The St. Raphael and St. Gabriel of the Sea Angels became the SuperCat 11 and SuperCat 12, respectively and the Waterjet 1 and Waterjet 2 became the SuperCat 17 and SuperCat 18, respectively. These were just too many for some 5 profitable routes (Batangas-Calapan, Cebu-Ormoc, Cebu-Tagbilaran, Cebu-Dumaguete and Iloilo-Bacolod (I am not sure if Cebu-Dapitan is really profitable) and to think the competition has even more High Speed Crafts than SuperCat (though admittedly not as good).

Except for SuperCat 6 and SuperCat 10 which were smaller and not that fast, all the other SuperCats had 2 x 2,600hp MTU engines with two waterjets as propulsion and all were capable of 38 knots, a speed not reachable by propeller-driven High Speed Crafts because of the phenomenon called “cavitation”. All of them were true sister ships and all were built in Singapore but by different manufacturers. All had aluminum alloy hulls for light weight. While the catamarans from Macau were not brand-new (but still very good), the former Sea Angels and Waterjets arrived here brand-new. All were built by Kvaerner Fjellstrand and were all true sister ships (together with the Stella Maris of Grand Seaways that also came here too). The rest that came from Macau were built by FBM Marineteknik.

In 1999 and 2002, the trimarans TriCat 50 and TriCat 2 also joined the SuperCat fleet. Later the tricats were renamed the SuperCat 2001 and SuperCat 2002. Both also had 2 x 2,600hp MTU engines with twin waterjets but being bigger their speed were a little lower at 36 knots. The two were true sister ships and they were the biggest ever High Speed Crafts that plied Philippine waters. Aboitiz, being a partner in FBM-Aboitiz (FBMA) which built them in Balamban, Cebu surely would have had to purchase one of their products even just for showcase purposes.

This was the time that SuperCat completely ruled the waves. They were the fastest, they were the most comfortable, they had the best passenger service and they have the best booking system. They even had the best, owned passenger terminal in Cebu port (which was shared with WG&A and Cebu Ferries Corporation ferries). In speed it was only the Weesam Express (1) and Weesam Express 5 of SRN Fastcrafts which can give any semblance of challenge but still the MTU-powered SuperCats were slightly faster. They dominated the High Speed Crafts routes and even bullied the opposition a bit (well, isn’t that what alpha dogs are supposed to do?).

But speed has its cost which is higher fuel consumption. And waterjets might give better speed especially at ranges where propellers begin to lose efficiently because of “cavitation” but waterjets also needs more maintenance. The dirty waters of our ports can easily clog them especially since many people just throw their trash in the water and the rivers that empty into the sea also contains garbage and these can be sucked by the waterjets. And one fouling costs money and moreover it throws a monkey wrench on the schedules, trips are lost and tempers and the patience of passengers are tested.

With the merger with Sea Angels and Water Jet, SuperCat actually found themselves with many excess catamarans especially since it was already found out then that the routes where one can field High Speed Crafts are limited since many others do not have enough patronage. The successor company to Universal Aboitiz, the Philippine Fast Ferry Corp. soon realized that. There was also the late realization that their catamarans were overpowered and that waterjets are actually not too well suited for local waters. Soon SuperCat began selling their MTU and waterjet-powered catamarans. And slowly they began buying High Speed Crafts that were not that powerful, not propelled by waterjets and some were actually not catamarans but fastcrafts which are monohulled vessels. Their first non-MTU, non-waterjet HSC, the Supercat 20 was actually a fastcraft.

Soon all their MTU and waterjet-powered catamarans and trimarans (which are triple-hulled vessels) were gone and sold abroad. One of the factors that forced them was the steady rise of the world oil prices starting in 2001. They then had a mix of catamarans and fastcrafts which were equipped with propellers. Their next favorite powerplant after MTU was the Caterpillar brand. With those changes, the SuperCats became just a fast as the competition and there were Weesam Express fastcrafts which invaded the Visayas that can already beat them in raw speed.

They were also not so as numerous as before as SuperCat slowly pruned down the number of units because of over-competition. Moreover, their parent company WG&A was split asunder and had to sell ferries to pay for the shares of the partners that were divesting. And the paring down of vessels included that of SuperCat too. With that situation the number of SuperCat HSCs shrank by a half and they no longer had showcase units which will show they have the best High Speed Crafts. Along this way the company’s name was changed to SuperCat Fast Ferry Corporation.

So, once at the apex of the High Speed Craft field, their rule of the waves slowly vanished in the new millennium. They then just became one of the few survivors of the High Speed Crafts wars here where most HSC companies sank. They initially still had a slight lead though but then their controlling stockholders, the Aboitiz family got more interested in the power generation industry and tried to sell the Aboitiz Transport System (ATS), the successor of WG&A. This was consummated later and SuperCat became a brand of 2GO under Negros Navigation Company.

With the number of units not growing and getting older, SuperCat slid further and the mistake of acquiring SuperCat 36 and SuperCat 38 did not help. Currently their best units are just the sister ships St. Jhudiel and St. Braquiel, the former SuperCat 30 and SuperCat 32, respectively. Though still using SuperCat as a brand since that is already an established brand, their High Speed Crafts have already been renamed to saints in the tradition of Negros Navigation Company. And yet this did not arrest the slide of SuperCat and they have HSCs whose engines that are already getting tired.

In this situation, Oceanjet began their challenge for the top of the High Speed Craft field. The company embarked on continuous addition of vessels to their fleet with their own-assembled fastcrafts and by acquisitions of the High Speed Crafts by the competition that quit the HSC field. And before the middle of this decade, Oceanjet or Ocean Fast Ferries already overtook SuperCat in sheer number. And then they were also overtaken in speed and newness by Oceanjet which aside from assembling their own fastcrafts also continuously changes the tired engines of HSCs in their fleet.

Most people including the tourists have no idea of these developments. Many think, wrongly, that SuperCat is still on top. They do not know that SuperCat is now just a shadow of its former self that once ruled the waves. However, Super has ordered two new HSCs in Austal Balamban recently but I doubt if it can overtake Oceanjet and rule the waves again.

[Photo Owner: Masahiro Homma]

HIGH SPEED CRAFTS IN THE PHILIPPINES

In the recent era, the High Speed Crafts (HSCs) industry in the Philippines has been consisted only of Fastcrafts and Catamarans (which are colloquially called “FCs” and “cats”). In the earlier years though we had Hydrofoils like the “Flying Fish” which sailed in Manila Bay. One extant but non-running example of a hydrofoil here is in Ouano in Cebu but it cannot yet be identified at the moment.

Flying Fish hydrofoil ©Gorio Belen

Fastcrafts are monohulled vessels with overpowered engines to give them high speeds. On the other hand, catamarans are twin-hulled and some are even triple-hulled and these are sometimes called as trimarans. We also had such examples here of that in the Jumbo Cats of Universal Aboitiz.

Supercat TriCat ©Gorio Belen

Many High Speed Crafts have aluminum alloy hulls to lessen weight and thus increase the ‘power to weight ratio’ to give them better speed. Our HSCs are not big and they are among the smallest in the world. We do not have a High Speed Craft that can carry vehicles.

Fastcrafts usually have propellers (screws) as means of propulsion. Catamarans, however, can have propellers or water jets. The latter type is no longer preferred here since water jets has a higher fuel consumption rate compared to propellers. Additionally, water jets are prone to fouling due to the rubbish and flotsam found in the waters of or near our ports.

Oceanjet 8, a fastcraft and St. Jhudiel, a catamaran. ©Mike Baylon

In general, catamarans are faster than fastcrafts since one advantage of twin hulls is the lower water resistance. The speed advantage is more pronounced with the use of water jets. However, there are some fastcrafts that can give ‘cats’ a good run for their money and sometimes speed races between the two happen especially when the cost of fuel was not yet high.

The catamarans, being wider, can carry more passengers than fastcrafts. However, their center of gravity is higher and if there is no motion dampening system the ‘cats’ roll (‘sway’ in layman’s term) more. It does not mean, however, that they are less safe but some passengers are more prone to motion sickness.

Fastcrafts in the country are mainly of two different designs. The more numerous are the fastcrafts made in Malaysia which were derived from a riverboat design. They were mainly built by several yards in Borneo with fastcraft-building centering in Sibu. The Malaysian FCs are long and sit low and have steel hulls. If crippled, a Malaysian FC can be tied to another and not towed. On a rough sea, waves will pass over its roof and splash on its windows and the craft will rock a little but sitting low nausea does not easily set in. it is actually a formula for a good sleep. Many doubted the Malaysian FCs at the start but when tried on a choppy sea it is then people realize they are more stable.

Weesam Express-I, a Malaysian FC design. ©Mike Baylon

The other design of our fastcrafts come from Japan and they are based on the motor launch. Many are aluminum alloy or FRP-hulled  (FRP is Fiberglass Reinforced Plastic) and both are light compared to steel. One disadvantage though of an FRP hull is in the event of an engine fire, the hull simply melts and none are almost saved from sinking. Like aluminum alloy hulls, when burning, FRP hulls produce noxious fumes. Montenegro Lines operates the most number of ex-Japan fastcrafts in the Philippines. Many of the Japanese fastcrafts here are actually sister ships having come from one basic design.

City of Masbate and City of Dapitan, two different Japanese design fastcrafts operated by Montenegro Lines ©Mike Baylon

There is also a third fastcraft design used in the country, the ones that came from Hongkong which looks like an oversized boat. It has good passenger capacity but with a wide hull it cannot match the Malaysian fastcrafts in speed. Only Oceanjet uses this type of fastcraft in the Philippines, the Oceanjet 3, 5 and 6.

Oceanjet 6, a Hong Kong-style fastcraft. ©Jonathan Bordon

Recently a new type of Fastcraft showed in the country, the Australian type which was built from kits sent here and assembled by Golden Dragon Fastcraft Builder in Labogon, Mandaue, Cebu. The examples are Oceanjet 8, 88 and 888 with another still being assembled and expected to be completed in the year 2015.

OceanJet 88 ©Mike Baylon

The primary exponent of catamarans in the country was the old Universal Aboitiz as represented by the SuperCat series. Aboitiz even established FBM Aboitiz Marine to build catamarans of Australian design in Balamban, Cebu. They sold this shipyard now to Austal but the facility still build ships including catamarans of Australian design which are meant for the international market (the local market can no longer afford such brand-new catamarans).

Most of the Aboitiz SuperCats are gone now along with its former competitors — the Sea Angels of Negros Navigation and the Waterjets together with many competitors that tried the Batangas-Mindoro and Iloilo-Bacolod routes. The SuperCats  recently passed on to 2GO in the merger of Negros Navigation and Aboitiz Transport System and they have since been renamed into saints.

St. Jhudiel, a catamaran operated by SuperCat/2GO Travel ©Mike Baylon

Gone too were most of the other shipping companies that tried catamarans in the ‘90s along with their crafts and routes. Among them are Prestige Cruises (operator of the Mt. Samat catamarans), El Greco Jet Ferries, ACG Express Liner (operator of the SeaCats), Royal Ferry, etc. The short-lived HSC boom happened when the price of fuel was still low. It seems the companies simply overestimated the market and maybe forgot most of the riding public are poor and will not readily pay double the fares of the ROPAXes. Even the boom of tourism in the recent years was not enough to lift our HSC sector. It was still the short-distance ferry-ROROs that thrived.

Mt. Samat Ferry ©rrd5580, flickr

Magsaysay Lines through Sun Cruises also operate cruise tours using High Speed Crafts from Manila to Corregidor.

Sun Cruiser II and Sole Cruiser of Sun Cruises ©Ken Ledesma

The biggest remaining operators of High Speed Crafts nowadays are Oceanjet Fast Ferries, 2GO, Weesam Express (SRN Fastcrafts), Starcrafts and Montenegro Lines. Lite Ferries recently entered this field and they now have three HSCs with two of them Hongkong examples but different from that used by Oceanjet.

Lite Jet 1 of Lite Ferries ©Jonathan Bordon

These are also several High Speed Crafts laid up in Manila, Lucena and Cebu and most of them are no longer in sailing condition. Most were victims of the HSC wars in the Batangas-Mindoro routes.

The Philippines has no formal definition of what is a High Speed Craft but in other countries HSCs are vessels that run faster than the ROPAXes. Our fastest ROPAXes sail at 20 knots and so the Philippine Ship Spotters Society (PSSS) has adopted 20 knots as the minimum speed to be considered a High Speed Craft. Older HSCs no longer capable of this speed are then downgraded into Medium Speed Crafts (MSCs). There are also vessels that came into the Philippines as original MSCs not capable of 20 knots and the prime examples of these are the sister ships Anika Gayle, Anika Gayle 2 and Anstephen. The Kinswell crafts were MSCs too.

Anika Gayle ©Mike Baylon

Though this sector is not growing it won’t go away, however. Maybe the recent collapse of the oil prices might see a renaissance if the price holds steady at the low level. Otherwise, the only hope is if the shipping companies can import fuel from Singapore tax-free but that is just like shooting for the moon or the stars. If this is not possible then the only hope will be is when the real income of the Filipinos go high enough so they will look for and be able to afford better sea crafts than they are used to. But then that will still be at least one generation away or even two given the glacial pace of change in this country.

For more photos of High Speed Crafts, please click here.