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

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

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Intermodal trucks for loading in BALWHARTECO Port in Allen, Samar

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

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

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

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

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LCT Raenell of Asian Shipping Corporation in Mandaue

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

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

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

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LCT Akira of Ocean Transport by John Carlos Cabanillas

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

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

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LCT PMI-3 from Leyte

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

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

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LCT Poseidon 15 in Verde Island Passage

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

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A Quartet of Sister Ships

The Lite Ferry 1 and Lite Ferry 2 of Lite Ferries, the Maria Helena of Montenegro Shipping Lines Inc. and the Danica Joy of Aleson Shipping Lines share one thing in common which is a common hull design making them all as sister ships. The four were built in different yards and in different years and they have different engines but they share the same superstructure too making them similar from afar though many do not realize that immediately. They also sailed at one time not far from each other and some might even have met in Dumaguete port.

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Among the four, it was Omogo which came first to the Philippines in 1987 from Setonaikai Kisen KK of Hiroshima, Japan to become the Danilo 1 of Danilo Lines. The Sensui Maru of the same Japan company followed in 1989 and she became the Danilo 2 of Danilo Lines. Actually, the two are among our early ferries, a product of the right bet of Danilo Lines on ROROs when they connected the ports of San Carlos and Toledo across the Tanon Strait dividing Negros and Cebu islands. When Danilo Lines was acquired by Lite Shipping Corporation, Danilo 1 became the Lite Ferry 1 and Danilo 2 became the Lite Ferry 2. Officially, however, the two ships still belong to Danilo Lines which was not dissolved yet but everybody knows now they are under Lite Ferries and other ships of Lite Ferries periodically relieve them now in the route and sometimes the two ships are assigned other routes of Lite Ferries.

The third to arrive in the country was the Danica Joy and she was one of the early ROROs of Aleson Shipping Lines when she came in 1994. The last to arrive was the Maria Helena which only came in 2004 after a stint in China with the Qingdao Ferry. Belonging to different companies, the quartet of sister ships have different home ports, the Lite Ferries in Cebu, Danica Joy in Zamboanga and the Maria Helena in Batangas.

Among the four, three were built in 1969 which are the two Lite Ferries and the Maria Helena. The Danica Joy, meanwhile was built in 1972. The Lite Ferry 1 was built by Kanda Zosensho in Kure yard, Japan. The Lite Ferry 2, though having the same owner in Japan was built by a different shipyard in the same year. She was built by Matsuura Tekko in Higashino yard, Japan.

Meanwhile, the Maria Helena was built as the Yanai by Nakamura Shipbuilding and Engineering Works in Yanai yard, Japan for Boyo Kisen KK of Yanai, Japan. She went to China as the Lu Jiao Du 1 in 1993. Lastly, the Danica Joy was built as the Nakajima by Nakamura Zosen in Matsue yard, Japan. [Note: Danica Joy is the same ship as the earlier Danica Joy 1.]

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Photo by James Gabriel Verallo

Lite Ferry 1 has the permanent ID IMO 7005530. Lite Ferry 2 has the permanent ID IMO 6926969. That means her keel was laid ahead of Lite Ferry 1. Maria Helena is also identified as IMO 7535274 and Danica Joy is IMO 7852414. I do not know why the IMO Numbers of Maria Helena and Danica Joy are out of sequence.

The four are not basic, short-distance ferry-ROROs but belongs to the next class higher which are over 40 meters in length (in fact, just below 50 meters LOA). The distinguishing characteristic of the four is the rectangular box at the front or bow of the ship which serves as protection for rain, sea splash and rogue waves. The four looks rectangular from the sides. All except Danica Joy have full two passenger decks here and a single car deck (Danica Joy just have a partial second passenger deck).

The car decks of the four have three lanes and four trucks or buses can be accommodated in each lane (more if it is sedans, SUVs or jeeps). Originally and until now, the four have RORO ramps at the bow and at the stern although all basically just use the stern ramp now for handling rolling cargo hence they dock stern-wise.

All the four have combined bunks and seats so all can be used either as a short-distance RORO or as an overnight ship. All have an airconditioned Tourist class and the usual open-air Economy class. The size of the Tourist class varies among the four, however and so do the passenger capacity. Maria Helena has the smallest passenger capacity among the four at only 310 passengers.

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Maria Helena by John Carlos Cabanillas

The gross tonnage (GT) of Maria Helena might be a little bloated at over 1,000, a pattern I noticed among ships that passed through China (if it is compared to its Japan GT). Meanwhile, the GT of the three others might be a little understated because it was practically unchanged from the Japan GT (when scantlings were added to ships). Until now, the Philippines have no true reliable GT figures (because MARINA does not know how to compute that?).

The four sister ships are equipped with a pair of Daihatsu marine main engines. Three have a total of 2,000 horsepower but the Lite Ferry 2 only has a total of 1,700 horsepower making it the slowest at 13 knots when new. Lite Ferry 1 was capable of 13.5 knots when new while the two others were capable of 14 knots when new. Realistically, they are only capable now of 11-12 knots given their age and the additional metal. Some might even sail at just 10 knots given the demand of the route.

The quartet all have raked bows and transom sterns. All have two masts and two funnels at the sides. However, only Lite Ferry 1 and Lite Ferry 2 have stern passenger ramps which is a trademark of Cebu overnight ferries. This design does not interfere with the car or cargo loading of the ship. This is not possible with Maria Helena because she has no full scantling.

The four have no permanent assigned routes. The nearest to having a permanent route is the Danica Joy in the Dumaguete-Dapitan (Pulauan) route where she was the first short-distance RORO with bunks. Montenegro Lines always rotate their ships but for a time Maria Helena was always in the Bogo-Cataingan route. Meanwhile, Lite Ferries always rotate their ships every so few months.

These four are all starting to advance in years now. However, all are still very reliable. Their metal seems to be still good too. So I don’t see them quitting anytime soon as all are still good ferries especially in the short routes, the routes that loads a dozen vehicles and a few hundred passengers.

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If there is anything that will kill them it will be the wrong proposal being pushed now by some quarters to retire ferries that are over 35 years in age. As if safety in ships is determined by the age of the ships when empirically it is not. Actually, it is vested interests and not just concern for safety that is fueling that push.

Anyway, I hope to see this quartet continue to sail for many more years. They are still capable ferries.

Note: It is possible that Ruby-1 or Ruby-2 of Alexis Shipping that plied the Batangas-Calapan route is also a sister ship of the four. But they are already missing.

The MV Mac Bryan

The latter half of the 1990’s was a decade of ferment in Zamboanga shipping like in Cebu shipping, Manila shipping and Batangas shipping. The liberalization and modernization policy of President Fidel V. Ramos was already in full swing and all were optimistic that the bad decade of the 1980’s was really over. The mood then everywhere and in every sector was to invest and to expand. Shipping was not excluded in that and ships of all kinds were coming fast from freighters to containers ships to conventional ferries up to the High Speed Crafts. But the bears soon follow the bulls and in the early 2000’s shipping actually has an overcapacity then. But this was not captured by the paper of Myrna S. Austria which still held that many routes have no or no significant competition. Wrongly because she only looked at competitions within a route and completely failed to see that parallel routes actually compete.

In the hoopla decade for shipping that was the 1990’s the Ever Lines Inc. of Zamboanga had a rather calculated response only. They only brought in two ferry-ROROs that was the next bigger size to the small, basic, short-distance ferry. This kind of ferry usually have a passenger deck and a bridge deck (which can be converted to an additional passenger deck), two ramps front and rear and two engines (and of course, two funnels and two propellers). The two ships that they brought in were the former MV Amagi and the former MV Shiraito of the Surugawan Car Ferry of Japan. The former became the MV Ever Queen of the Pacific in the fleet of Ever Lines while the latter became the MV Ever Queen of Asia. The two were true sister ships and they arrived in Zamboanga in 1998. In 2007, after nine years of sailing, Ever Lines decided to sell the MV Ever Queen of the Pacific when they were able to buy a fishing vessel, the former MV Coral White which was then converted into a passenger-cargo ship in Zamboanga. This ship is not a RORO (Roll On, Roll Off) and is a bit smaller but Ever Lines deemed her fit for their Tawi-tawi routes and so the MV Ever Queen of the Pacific was sold to the Sta. Clara Shipping Company of Bicol where she became the short-distance RORO named the MV Mac Bryan.

The MV Amagi which became the MV Ever Queen of the Pacific and later the MV Mac Bryan was built by the Shimoda Dockyard Co., Limited in Shimoda yard in Japan in 1970. The ship measured 54.0 meters in length over-all, 50.9 meters in length between perpendiculars with and an extreme breadth of 12.0 meters (which means she is a “thin” ship) and a depth of 3.8 meters. Her Gross Register Tonnage (GRT) was 491 and her Deadweight Tonnage (DWT) was 102. She was powered by two Niigata marine diesel engines with a total output of 1,800 horsepower which propelled the ship to a sustained top speed of 14 knots when still new. She plied a route in Suruga Bay much like other ferries that later came to the Philippines. Her passenger capacity in Japan was 203 in seats in a cabin with a few more seats in the open deck. Her permanent ID is IMO 7034452.

A steel-hulled RORO she has a bow ramp and a stern ramp with a car deck of four lanes with a total of approximately 50 meters length. Her approximate rolling cargo capacity is about 550 lane-meters. She has a rectangular box at the bow where the ramp fits and this serves as rain deterrent so that the car deck won’t be as wet and slippery in rainy weather. The bow of the ship has a raked look and with the rectangular box she looks muscular. She only has one passenger deck and the bridge deck was reserved for the crew. The ship has two masts with the aft mast looking tall. The stem of the ship is raked and the stern is transom.

After being sold to Ever Lines and arriving in Zamboanga in 1998 she underwent refitting to become an overnight ferry fitted with bunks. Together with the sister ship the MV Ever Queen of Asia, they were used in the Zamboanga-Jolo-Siasi-Bongao-Sitangkai route of the company. This is actually not an overnight route but a multiday route with the ships sailing between route legs are mainly at night and it takes five days for the ship to come back. However, though the routes and schedules are fixed the MV Ever Queen of the Pacific was not a true liner as the amenities do not fulfill that of a modern liner although she was a two-class ship with an open-air Economy class and an airconditioned Tourist class. Her sailing was more of a multi-overnight ferry with few basic amenities. She can also be called a passenger-cargo ship as the stress in that route is cargo and they take in lots of it but it is not rolling cargo although she is a RORO. The ramps actually just makes the loading and unloading of the porters easier. Most of the cargo in their route is loose cargo.

In 2007 when she was sold to Sta. Clara Shipping Corporation to do short-distance Bicol routes she was reconverted to a short-distance ferry not with bunks but with seats and this time she is already known as the MV Mac Bryan. At the front an airconditioned section with bus seats (yes, bus seats!) were fitted. This was the old passenger section in Japan. Since the original seats were no longer around this was the most available seats already that were a little comfortable and ordering them was not difficult as in the Bicol routes the ships of Sta. Clara Shipping Corp. and its sister company Penafrancia Shipping Corporation loads a lot of buses. At the rear of the airconditioned Tourist section is the open-air Economy class with fiberglass bucket seats which is not comfortable for long sailings. The ship also has a small kiosk between the two accommodation classes where drinks, snacks and knickknacks are available. There is no restaurant but there is a simple galley for the crew.

This time around as the MV Mac Bryan under Sta. Clara Shipping Corp., she is already used as a true RORO and almost all her loads are vehicles, practically 98% of it, and most of it are trucks and buses. These intermodal trucks and buses are in the main already contracted by the company. So in peak seasons it actually operates not in First Come, First Served basis as most ignorant motorists suppose and which they do not understand. The ship will even wait for a “suki” vehicle if it is a little delayed to the scratching of the heads who do not know or understand the contractual system.

Equipped with seats the passenger capacity of MV Mac Bryan is about 500. As fitted now her Net Tonnage (NT) is 239 and her Gross Tonnage (GT) marginally rose to 499. Her local Call Sign is DUJ 2136 but she has no MMSI Number.

I have visited the bridge of MV Mac Bryan like I have visited the bridge of her sister ship MV Ever Queen of Asia. The bridge equipment of MV Mac Bryan is more complete and it is much cleaner and tidy. It even has a mini-library for the necessary files and references.

In Sta Clara Shipping Corporation she plies all routes of the company in rotation. The three routes of her company are Matnog-Allen, Tabaco-Virac and Masbate-Pio Duran. In her last assignment after her drydock in Nagasaka Shipyard in Tayud, she was brought to the last-named route because they want their second ship there to have a smaller engine since their second schedule for the route is not that full. She did not stay full-time there because Sta. Clara Shipping Corporation and Penafrancia Shipping Corporation always rotate their ship and route assignments.

I have heard the Niigata engines of MV Mac Bryan are no longer that strong. But over-all, she is still a reliable ship. Maybe she just need to have her engine revolutions lessened a bit. Well, her company and its sister company Penafrancia Shipping Corp. are actually good in extending the life of old ships and with its special relationship with Nagasaka Shipyard it is sure that their ships will be maintained well. And if need be she can just specialize in the short Matnog-Allen route which can be kinder to the engines although her rolling capacity might be a little small for the route when peak seasons come.

I expect a long more time of her sailing the Bicol routes successfully, knock on wood.