The FastCats That Could Be Paradigm-Changing

When the FastCats first arrived I did not know how to assess them properly. It was brand-new but truckers and buses which are charged disproportionately higher (because they say of the weight) decide on the price point and not on the newness and amenities of the ship. Actually, rebates in the form of complimentary passenger tickets (which is then sold), outright discounts and cash bonuses are stronger inducements to them. The superior speed of the FastCats might not also be decisive because that can be trumped by longer waiting hours in the ports if the departure gaps are significant. And by large on many buses and trucks it is not the decision of the drivers where to board as that is a company decision if there are company-to-company arrangements and accounts. It might only be in private cars and SUVs where the FastCats might have a better pull but then most drivers will not wait if the departure time is still two or more hours away.

The amortization weight of the FastCats also played into my mind. These medium-speed ships were all loaned from the DBP (Development Bank of the Philippines) from a JICA loan window meant to modernize our shipping. I do not know the loan terms and that part not on the top of the table but it could be in the vicinity of P3 million a month, a rough guesstimate. That would translate to about P80,000 a day (it could be less if the amortization terms are longer and it could be higher if shorter or if the if it is not a soft loan) on top of operational costs and other costs incremental to operating a ship (think fuel and parts) and a shipping company (think offices and office staff) plus the mandatory taxes, insurance and registration. Add to that the expenses and downtime of drydocking which will also be in the millions of pesos.

A Moderator of Philippine Ship Spotters Society (PSSS), our Math Professor induced me to Calapan to have a firsthand look. After observation and calculation, I immediately conceded that if the route is Batangas-Calapan with its high traffic the FastCats will be profitable since ferries sail there 24/7 except on rough weather and storms. But I had my doubts then on other routes where the traffic is not so strong. Weaning away patronage from competitors is not that easy because it is not really a free market since many trucks and buses are already locked in in contracts with some shipping companies especially those which are good in the rebate, discounting and hospitality (like free meals) game. These shipping companies generally have their ships fully or nearly-fully amortized hence their break-even point could be lower even if their fuel cost is higher .

The FastCats are catamaran ROROs but unlike what they say they were not the first to field this type of craft since the Starlite Ferry and Lite Ferry 23 came ahead of them. The FastCat are not High Speed Crafts (HSCs) because they only sail at 17 knots. Hence, their classification will fall to Medium Speed Craft or MSCs. It seems the choice of their name was meant to fool those who are not very knowledgeable of sea crafts.

fastcat-ramp-nowell

The FastCats originated from a design of Sea Transport Solutions of Australia but all were built in China by different yards. These vessels feature aluminum alloy hulls for less weight which help in boost speed, lower fuel consumption and in resisting corrosion. A catamaran design means less drag but it can also be wicked in cross-swells. The FastCats do not carry their own ramp thus saving more weight and instead there is a hydraulically-activated ramp in the port which connects to the ship. The disadvantage however is they need a dedicated docking area because the ramp-in-the-port precludes the use of others of that space and so applying for a port are sometimes complicated by this requirement. The ramp can also be damaged by storm waves as shown by what happened in Calapan port.

The dimensions of the FastCat are 50.6 meters in length over-all, 47.2 meters in length between perpendiculars, 17.8 meters in breadth and 4.2 meters in depth. Originally the ship has 683 to 704 gross tons when these left China but with the added passenger deck for the Economy class on the bridge level (they call the bridge the “wheelhouse”) the gross tonnage rose and in the case of FastCat M6 it Is already 967 gross tons. The gross tonnage of the others would then not be far from that. The original net tonnage was 207 to 212 but definitely it is now far higher than that because of the additional Economy section. Generally, the declared DWT is 300 tons.

The passenger capacity of the vessel is between 275 to 290 divided into Tourist and Economy. The Tourist has cool airconditioning and airline-type seats with enough leg space and it is located on the deck below the Economy. The ship’s canteen which reminds one of a convenience store is also located there and its offerings are much better than the basic, short-distance ferry-ROROs around. The passenger service is much better too in all aspects. It seems the service personnel were recruited from Hotel and Restaurant Management course grads instead of the plain able-bodied seamen of competitions’. The passenger accommodations are located in only one side of the ship making for an unbalanced look. The bridge is located at the middle of the ship above the car deck.

The first FastCats are powered by 4 Cummins engines with a total of 2,600 horsepower while the latter ones are powered by Cummins clones built in China with the same power output. From a report I got the FastCats have 4 screws which means they are not using synchronizers. That means less weight, less complication, less power lost and there is no possibility of an unbalanced and difficult run if ever one engine loses power (as they will just shut down another engine on the opposite bank). The bridge of the FastCats are also modern like that of a High Speed Craft (not the ones from Malaysia) and for me the most notable feature is it produces its own power and is not dependent on the power supplied by the engine room (and that is a lot of safety margin).

fastcat-bridge
????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

The FastCats were built by different companies in different yards in China. They total ten but the owner of Archipelago Philippine Ferries Corporation recently announced they will order more and will apply for routes in our neighboring countries and on additional routes in the country. The ship series was originally intended to be named “FastCat M1” to “FastCat M10” but heeding the Chinese aversion to the number “4” there is no “FastCat M4” and instead there is a “FastCat M11”. The first one in the series of sister ships arrived in 2013 and the last one arrived in 2016.

Analyzing the FastCats and comparing it to other ROROs of the same length what I noticed is the 17.8 meters breadth of the FastCats means an extra RORO lane. At 2,600 horsepower the FastCats do not use a bigger engine than many ROROs of the same length. That means the extra speed comes not in overpowering these catamaran ROROs. It was instead coming from the less weight due to the aluminum alloy hull, the less drag of the catamaran design and the minimalist superstructure. The last one might be the key along with the use of aluminum. The old-style ROROs really have a lot of steel being carried around. That will tell on fuel consumption and it will weigh down the speed. That is the reason why most ROROs in the 50-meter class with about the same or a slightly higher power output runs at only 13-14 knots. And for sure with the higher vessel weight and conventional hull design plus the age they consume much more fuel than the FastCats.

fastcat-car-deck-jakosalem

And that is the reason why the FastCats can, at the start, match the fares and rolling rates of the competing ROROs although they are carrying a much higher amortization rate. Anyway they cannot charge significantly higher because the better amenities and passenger service will only primarily attract the private vehicle owners driving sedans and SUVs.

However, total revenues of any transport will primarily depend on the kilometers or nautical miles run. That is true for airplanes, that is true for the buses and that is also true for ships. That is one of the reasons why budget airplanes are successful now because they practically fly round-the clock with just a few hours of lay-over and to be able to do that they use double crewing. That is also the reason why Philtranco loves the Manila-Davao run because night and day the bus runs and the more kilometers and hours it run the more is its revenues.

And that brings to the tactic that Archipelago Philippine Ferries is and will be using to have enough revenue in routes not as strong as Batangas-Calapan — they will run the opposition to the ground by running the FastCats with as many trips as possible in a day like in the 44-nautical mile Dumaguete-Dapitan route where they now have 3 round trips in a day (there is no guarantee, however, that this will not change). Somehow, something has to give way and since they are running they will be able to gain load and passengers. There is really no reason for them to wait for the next ferry unless they are contracted to it as they are not faster. Everybody loves time saved as long as the rates are about the same.

FastCats can do that many trips a day because they are faster. That is the same line of reasoning why regional container ships normally sail now at 20 knots, the same speed as our SuperFerries that became saints of 2GO. With such speed they can make more voyages in a year and that means more revenues. Or put it another way the shipping operator can make the same revenue with less number of ships. Neat, huh?

Faster time is also a come-on on ferries that have close time departures. If there is a FastCat that is promising a 2.5hr sailing time in a route then dumb is the passenger of private car owner which will opt for a 4-hour sailing. Well maybe if he is related to the owner or the Captain then it is forgivable. That is the reason why then I do not take the slow Maharlika II in the Liloan-Lipata route since Super Shuttle Ferry 18 will overtake it even if it left later and I have the benefit of a ship with better accommodations. But in shorter routes the sailing time difference will be not that much great and the come-on of greater speed will be less. The time consumed waiting in the port will be the more decisive factor then.

That is why the FastCat is dangerous for the old-style ferries and even to new Starlite Ferries. Speed is their ace. I have heard that even in the Batangas-Calapan route some now opt for the FastCat rather than the SuperCat because at 17 knots versus 22 knots the travel time difference in the 24nm route is not that great and yet there is a significant difference in fare as in almost double while their facilities are just about the same. So even the High Speed Crafts which gulp a lot of fuel and do not carry any significant volume of cargo is threatened by them.

A view of some of the old-style ferries of the competition or possible competition, same size class and engine size:

King Frederick 56.8 m x 14.0m, 2400hp, 13.5 knots when new

Nelvin Jules 56.8 m x 14.0m, 2400hp, 13.5 knots when new

Maria Zenaida 54.0m x 11.4m, 2400hp, 12.5 knots when new

Reina Genoveva 59.9m x 11.0m, 2600hp, 14 knots when new

Reina Hosanna 59.9m x 11.0m, 2600hp, 14 knots when new

Super Shuttle Ferry 12 53.0m x 10.4m, 2700hp, 14 knots when new

Lite Ferry 15 60.3m x 11.4m, 2600hp, 14 knots when new

Starlite Navigator 57.3m x 13.5m, 2400hp, 14 knots when new

Lite Ferry 1 48.7m x 11.0m, 2000hp, 13.5 knots when new

Lite Ferry 7 50.8m x 10.8m, 2000hp, 14 knots when new

Maria Helena 49.0m x 12.2m, 2000hp, 14 knots when new

Maria Rebecca 49.9m x 13.2m, 2000hp, 13.5 knots when new

Hansel Jobett 51.1m x 14.0m, 2000hp, 13.5 knots when new

Star Ferry III 46.4m x 11.5m, 2000hp, 13.5 knots when new

Those ferries are already 1.5 knots down, on the average, from their speed when new. And those 2,000hp ferries will be using more fuel now per nautical mile than the 2600-horsepower FastCats. Even when new it is not sure they were consuming less fuel because of their higher weight and drag. Those 2,600-horsepower ferries will be definitely consuming much more fuel now than the FastCats.

Note also the difference in the breadth which translates to lane-meters of rolling cargo. Those ferry sampling have on the average a greater passenger capacity than the FastCats especially since all except one have two passenger decks. But on ROROs the rolling cargo earn a disproportionate share of the revenues compared to passengers and FastCats have one or two more lanes for vehicles compared to that sampling. And if the passenger capacity of the FastCats will prove lacking then another passenger compartment can be added to the vacant side of the vessel. So sometimes it is said that the FastCats are not full but their rolling cargo load might already “full” if compared to the load of that sampling which has a narrower and smaller vehicle deck than the FastCats.

There are short-distance ferry-ROROs that are in the 60-meter class that can run at 14-14.5 knots true speed if they want but on the average these feature engines that are on the average are bigger as in nearly 1,000 horsepower more. The fuel consumption difference compared to the FastCats will even be greater and actually they might be one truck longer than the FastCats but still the rolling cargo capacity of the FastCats are bigger. A sampling:

Maria Felisa 57.4m x 13.0m, 3600hp, 15.5 knots when new

Maria Vanessa 57.4m x 13.0m, 3600hp, 15.5 knots when new

Maria Oliva 64.3m x 13.5m, 3200hp, 16 knots when new

Maria Ursula 61.4m x 14.0m, 3400hp, 16 knots when new

Reina de los Angeles 60.9m x 12.8m, 3600hp, 16 knots when new

Anthon Raphael 61.4m x 14.0m, 3400hp, 15.5 knots when new

For sure this set consumes a lot more fuel than the FastCats and there is still a 2.5-3-knot disadvantage.

The only one in this size which will not be too a laggard compared to the FastCats is the Jack Daniel of the Sta. Clara Shipping Corporation. She is 65.0m x 14.0m and sailed at 17 knots when new but her engine has 4,300 horsepower already, well over the 2,600 horsepower of the FastCats. Maybe the aluminum hull and the catamaran design did a lot of magic to keep the FastCats separated from the pack.

Which brings us to the new Starlite ferries. These are 66.8-67m x 15.3m ferries and that means a car deck capacity nearly equal to the FastCats. These definitely has more passenger capacity at 750 persons but as I have said if a new passenger compartment will be built on the other side of the FastCats the current passenger capacity of 300 of the FastCats will nearly double to 600 which will not be much behind than the new Starlite ferries. These new Starlite ferries have a speed of 14.5 knots and 3,650 horsepower are needed to produce that speed. So for a possible equality in passenger and rolling cargo capacity the new Starlite ferries are using more fuel for even less speed. Now I begin to understand why there are a lot of catamaran ROROs in other countries with aluminum hulls. They are simply more efficient. And these are the aces of the FastCats.

fastcat-canteen

If all can run 100 to 150 nautical miles average in a day (that is about the back-and-forth run of the Cebu ferries to Ormoc) then they might be able to amortize their fleet, my guess. In Batangas-Calapan they have no problem with that quota. In Cebu-Ormoc, the Oceanjets and SuperCats do over 200 nautical miles in a day, to think and they are profitable (with maybe a 2/3 load) even though they guzzle a lot of fuel. That will take a lot of wrestling customers away from other shipping companies. Well things do not happen in a vacuum. With amortized ships the others could choose to lower the fares and the rates (now that will be good for the the riding public and shippers; after all rolling and cargo rates in the Philippines is really high).

But then I don’t place too much emphasis on that now. If the amortization is only P80,000 a day, if a FastCat runs 8 trips in a day that will be only P10,000 per trip and if that is Batangas-Calapan that will just mean taking out the revenues from two trucks! And it might just be one truck in longer routes! Above and beyond the operational costs like fuel, labor, etc. Dangerous, dangerous! For the competition, that is. That also shows how high our rolling rates are (as I always asked since when did MARINA learn how to properly compute rolling and container rates?)

However, in the Liloan-Lipata route I heard a disquieting report. One FastCat has left and the remaining one also cheats now on the schedule as in they compact the schedules if there is not enough load (well, useless to run and run if the load cannot justify it). The reason is the Cargo RORO LCTs there are suctioning the trucks like vacuum. That is also a phenomenon noted in the various Cebu-Leyte routes and even in the various Cebu-Bohol routes. Cargo RORO LCTs can offer rates as low as half of the conventional ROROs and for trucks that is a decisive come-on. And that is the reason why and Cargo RORO LCTs seem to be also a new paradigm change.

And besides many commercial vehicles (trucks, buses and panel trucks like those of LBC, etc.) are already locked in through company-to-company arrangements and through the use of super special rates and special rates plus other inducements. As I said it it not really a free market and the only ones that actually pay the published rates are the newcomers and the seldom travelers. The published rates are actually artificially high so as to cover all the discounts that the RORO ferry companies are giving to their regulars. This is actually a sucker’s world but the newbies do not realize that.

Which of the two paradigm changes will prevail? And will the old RORO ferry companies hold on through the locking game? Well, only the future can tell (how can we guess all their moves, counter-moves, guts and instincts?). But I love paradigm changes. With those things begin to get interesting.

fastcat-docked

Photo Credits: Carl Jakosalem, Nowell Alcancia, Mike Baylo, PSSS

Advertisements

The FastCats

Starting in 2013, the brand-new FastCats of Archipelago Philippine Ferries started arriving in Batangas one after another. As of last count at the end of 2014 five are already in the Philippines with five more set to arrive in 2015. The arrival of these vessels was well-noted and it created a stir as brand-new ships don’t come into the country (the last wave were the High Speed Crafts that came 20 years ago).

The FastCats are ROPAX (RORO-Passenger) catamarans by classification. They were designed in Australia and built in China in several yards. The capital was loaned from DBP Leasing Corporation, a government-owned and controlled corporation (GOCC). Published reports say one FastCat costs PhP 240 million.

FastCat M2 ©Mike Baylon

The FastCats are supposed to be fielded in the routes of Archipelago Ferries and PhilHarbor Ferries which are two separate companies legally but operating as one. These two companies operate the poorly-maintained “Maharlika” ship series. The routes where the FastCats are supposed to be fielded are:

Batangas-Calapan with 2 FastCats

Bulalacao-Caticlan (in place of Roxas-Caticlan) with 2 FastCats

Matnog-Allen with 2 FastCats

Liloan-Lipata with 1 FastCat

Dumaguete-Dapitan with 1 FastCat

Bacolod-Iloilo with 2 FastCats

The first route served was Batangas-Calapan starting in 2013. As of the end of 2014 it is still this route that Archipelago Ferries is serving. One problem is FastCats cannot use a port directly because a specific pneumatic docking mechanism has to be attached to the vessel before it can handle rolling cargo (i.e. vehicles). This was the reason why for several months they can only handle passengers in the Batangas-Calapan route when the docking mechanism was damaged by a typhoon. When the docking mechanism is already attached in the wharf other ships can no longer use the same docking space as it becomes an obstruction to them. FastCats are not equipped with RORO ramps for vehicles.

FastCat pneumatic ramp ©Raymond Lapus

The FastCats are identical and all are sister ships. They measure 50.6 meters by 17.5 or 18 meters and a GT of 683 for the slimmer ones and a GT of 704 for the wider ones. Net Tonnage is 207 with a DWT of 300 tons and a passenger capacity of 275. Each is powered by four Yanmar Marine or its clone Newage diesels which develop a total of 2,600 horsepower. The FastCats have steel hulls and aluminum alloy superstructure. Cruising speed is 17 knots and thus are classified as Medium Speed Crafts (MSCs).

Fastcat M2 Bridge ©Raymond Lapus

The passenger accommodations of the FastCats are only on one side of the vessel in two decks. The lower deck is the airconditioned Tourist section together with the canteen. The non-airconditioned Economy section is above that on the bridge level. The bridge occupies the center position in the ship with 360-degree visibility and its consoles are modern-looking.

FastCat airconditioned accomodations ©Raymond Lapus
FastCat open-air accomodations ©Raymond Lapus

The car deck has a declared capacity of 8 regular trucks or buses and 20 cars. Converted that should be at least 18 trucks minimum if there are no long trucks or trailers. However, what will be the limiting factor is the deadweight tons of 300. Truck-trailers with container vans can weigh up to over 30 tons here and wing van trucks can also exceed 20 tons gross. Deadweight tons is actually the sum of the weights of the cargo, fuel, water, ballast, supplies and stores and passengers and crew carried by the ship so the net carrying capacity in weight of a FastCat will not reach 200 tons as the FastCats are designed to carry 79.0 tons of fuel, 6.7 tons of fresh water and 2.9 tons of lubricating oil.

FastCat M2 Car Deck ©Mike Baylon

Can the FastCat pay for itself? I think that is the big question (although I will grant the FastCats are a good addition to the local fleet being new and a good technical development). I am concerned with this not only as a citizen but also it reminds me of the brand-new ship purchases of the government-owned National Development Company in the 1960s which were leased to local companies. The government lost money in that and we only squandered the war-reparations money that came from Japan. If this FastCat project fails then in the end we will be the ones paying for the mistake.

For high-density routes like Batangas-Calapan where FastCats sail night and day there is no problem in viability. This is akin to budget air carriers which can afford brand-new planes because the planes fly from dawn to night and people are willing to pay high for air cargo and parcels which are the bread and butter of planes. But in less dense route I wonder if the viability is not iffy. At PhP 240 million each and assuming 6% interest and 15-year repayment term the interest and principal payment will come out to about PhP 2 million a month. And for that money out it does not yet include fuel (which is the primary operational cost), crewing, docking charges, insurance, maintenance and drydocking costs and depreciation.

FastCat M1 docking at Batangas ©Mike Baylon

There will be routes where two roundtrips a day might not be feasible for the FastCats at the current traffic especially if they use two vessels in the route. That is why I am a little puzzled why Archipelago went for 10 FastCats immediately. Unless they are thinking of penetrating other high-density routes like Cebu-Bohol, Cebu-Leyte or Cebu-Negros but they might run against the blocking tactics of the current operators as they are not former operators there.

What is notable, however, is that the FastCat is a good technical development, although not as a catamaran RORO because there have been such ships before her contrary to the claim of Archipelago Ferries. What I mean is at 2,600hp which is average for an HSC (High Speed Craft) here they can carry a lot of vehicles while an HSC can’t. And the passenger capacity at 275 is also just about average for an HSC here. So that bonus of being able to carry 8 trucks and 20 cars is a very big plus compared to an HSC which cannot carry any significant amount of cargo and thus has to charge the passengers high. With a high cargo load the FastCats can charge just a little bit higher than ROPAXes (of course being new carries a little premium). While being at least 1.5 times faster than them and not conceding that much in speed compared to HSCs which use semi-economical speeds now.

FastCat M2 cruising between Batangas and Calapan ©Raymond Lapus

Many owners or crew of the rolling cargo will prefer the FastCats if the rates are comparable to the old and sometimes half-decrepit ROPAXes. And FastCats have the bonus of speed and a snappier crew ,which is a far cry from the old Archipelago and PhilHarbor ways. And maybe they are safer too not just because of the design but because they are simply much newer which means less things can go wrong like engines conking out in a near-gale which is what happened to “Maharlika Dos”.

Maybe the survival and viability of the FastCat will need taking traffic and patronage away from ROPAX competitors (and even the HSCs). I do not know if this was their calculation and intention right at the very start. I have no qualms with that as free competition is really like that. As long as cartels or monopolies do not happen then supposedly the passengers and shippers should stand to benefit from competition in the market.

It is only time and practice that will really tell if at that price tag the FastCats are really viable. Much will also depend on the quality of management, the maintenance and the use of astute business policies. Of course, the price of fuel will also be a factor along with our exchange rates (the price of parts depends on this). The current downward spiral of the world market price of oil is a boon to shipping as fuel cost is the highest operation cost in shipping.

FastCat M2 ©Raymond Lapus

Maybe having the FastCats built in China (but with the assurance of an Australian design as Australia is a world leader in catamaran design) was a wise business decision as China is now the world’s leader in shipbuilding cost (as in the lowest cost builder). Having China equipment might also be a good decision as it brings down the cost and replacement parts are cheaper there. Possession of an ABS (American Bureau of Standards) certification is also reassuring.

FastCats have a handful of business and competition pluses. Now, if only Archipelago Ferries reinvents itself completely and be able to maintain its new standards so it can surmount the biggest hurdle of the FastCats which is its high acquisition price.