Was It Choking Or Indigestion For Starlite Ferries?

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

37502538022_bc1dafb3c3_h

Starlite Pioneer by Raymond A. Lapus

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

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

33337108313_b5a84116fc_k

Starlite Reliance by Carl Jakosalem

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

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

37670389081_67d9e71de0_k

Starlite Eagle by Carl Jakosalem

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

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

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

37454566420_4f27dcd032_k

Starlite Saturn by Raymond A. Lapus

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

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

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

37388111702_16a90d55ce_z

Starlite Archer by John Edmund

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

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

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

37482308691_24e0eb57c2_k

The most senior now in the fleet of Starlite Ferries

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

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

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

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

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

The Intermodal in the Philippines

Retrieved from the Old PSSS Website
written by: Mike Baylon

Intermodal is the use of more than one form of transport in a trip or journey. In the Philippines, that usually means island-hopping using a vehicle (public like a bus or private) and a RORO. Intermodal could be for business like shipping, a container van or cargo truck. It could also be for personal pleasure like bringing one’s own vehicle for touring or visiting relatives in the provinces.

Batangas Port ©Edison Sy

35 years ago, the intermodal as we know it today barely existed. There were only a few LCTs that connected some nearby islands especially in the Visayas. The connections between Luzon, Visayas and Mindanao were not yet in existence. In fact the highways we take for granted today were still being built. The completion of that, the construction of connecting ports and the emergence of the RORO ships were the set conditions for the intermodal system to fully arise.

The idea to connect Luzon, Visayas and Mindanao were first crystallized in the Pan-Philippine Highway project dream during Diosdado Macapagal’s term. This did not get off the ground for lack of funds and basically only feasibility studies were made. The idea was then taken over by Ferdinand Marcos. War reparations equipments and soft loans from Japan were used. Hence, the project was renamed the Philippines-Japan Friendship Highway.

The Proposed Pan-Philippine Highway ©Gorio Belen

It was already Martial Law when the road constructions went into full swing. More foreign loans were contracted and applied to the project. At Marcos’ behest, the project was renamed the Maharlika Highway. Most Filipinos later identified this project with Marcos (and this probably resulted in the everlasting irritation of Diosdado Macapagal’s diminutive daughter).

At the middle portion of the road construction period the connecting ports of Matnog (in Sorsogon), San Isidro (in Northern Samar), Liloan (in Southern Leyte)and Lipata (in Surigao City) were built. Those were entirely new ports and specifically designed as RORO ports to connect Sorsogon to Samar and Leyte to Surigao. Two ROROs were also purposely-built, the “Maharlika I”, launched in 1982 and fielded in the Matnog-San Isidro route and the “Maharlika II” launched in 1984 and fielded in the Liloan-Lipata route.

Matnog Port ©Joe Andre Yo

Two key connecting bridges were also constructed. To connect Samar and Leyte, the beautiful San Juanico Bridge was built over the narrow strait separating the two islands. And to connect Leyte to Panaon Island, the Liloan bridge was built over the narrow, river-like, shallow channel separating the two islands.

San Juanico Bridge ©George Tappan

The Marcos government made a lot of hoopla about the Luzviminda (Luzon-Visayas-Mindanao) connection. Officially, when the Maharlika ferries sailed the administration then claimed it was the first time that Luzon, Visayas and Mindanao were connected in our history by the intermodal. But in reality the private sector was ahead by a few years and used their own ROROs and LCTs to connect Luzviminda using existing and makeshift ports and wharves, some of which were privately-built. The Bicolandia Shipping of Eugenia Tabinas of Tabaco, Albay and the Millennium Shipping of the Floirendos of Davao were among the key pioneers here that lasted.

Soon other RORO connections also came into existence bridging the other islands. In the Southern Tagalog routes, it was the Manila International Shipping and Viva Lines which were the pioneers. They mainly used Batangas and Lucena as base ports and they connected the two provinces of Mindoro, Romblon and Marinduque. In the intra-Visayas routes Gothong Shipping, Aznar Shipping and Maayo Shipping were among the early pioneers that lasted along with Millennium Shipping. Except for Gothong, all were short-distance ferry companies and basically carried vehicles crossing the islands.

Dalahican Port, Lucena City ©Raymond Lapus

It must be pointed out that even in the 80’s, liner companies (like Negros Navigation, Sulpicio Lines and most especially Gothong Shipping) and some overnight ferry companies (notably Trans-Asia Shipping) already have ROROs that serve the overnight and some short-distance routes. Though basically carrying LCL and palletized cargo their ships can carry vehicles if needed. However, unlike the short-distance ferry companies that was not their thrust. But their RORO liners are sometimes the only way to bring vehicles from Manila to an island not connected by the short-distance ferry companies. Hence, car manufacturers and dealers were among their clients. This presence impacted a lot the long-distance LCT/barge+tug companies like Lusteveco (Luzon Stevedoring Co.), a niche carrier established by the Americans.

Asia Korea of Trans-Asia Shipping Lines ©Gorio Belen

In the 80’s, containerization of local shipping went full blast. It began with 10-foot and 20-foot container vans moved by forklifts. But in the 90’s, the 20-footers dominated with a significant number of 40-foot vans that are mainly transshipments for foreign ports. To speed up loading and unloading the container vans were mounted in trailers pulled by tractor heads or prime movers. This mode is also considered intermodal.

While that intermodal form was gaining supremacy in the long-distance routes, the combination long-distance bus/truck plus short-distance RORO was also gaining ground in the 90’s. In the first decade of the new millennium that intermodal type was already beginning to surpass the long-distance shipping-based intermodal. This new combination has changed and is still changing the Philippine shipping seascape. The long-distance buses (along with the budget airlines) took the passengers of the liners. And the long-distance, intermodal trucking began to take the container business of long-distance shipping companies.

Calapan Port ©Raymond Lapus

In the last decade, long-distance liner shipping companies whose base is Manila has been driven out of some important islands and their frequencies were reduced in others. While Manila as an inter-island gateway port is being reduced in significance, Batangas has become a very important gateway port. Because of this long-distance shipping from Manila to Panay has been reduced to just the port of Iloilo. But even in this route the frequencies are much reduced now while the frequencies of the buses and trucks are in full upswing. Occidental Mindoro ferries from Batangas also lost out and Mindoro passenger shipping from Manila is now almost over (this does not include Lubang island).

The intermodal bus/truck plus short-distance RORO combination has also invaded Cebu, traditionally our second most important port. There are now long-distance trucks from Manila coming to Cebu and some of these are even Cebu-based. These trucks have already short-circuited the traditional Cebu shipping bailiwick Eastern Visayas. To compete Cebu manufacturers and distributors are already using their own delivery trucks to the nearby islands esp Negros, Bohol, Leyte and Masbate. Trucks from those islands also reach Metro Cebu.

Polambato Port, Bogo City, Cebu in the North ©James Gabriel Verallo

Bato Port, Santander, Cebu in the South ©Jonathan Bordon

Toledo Port, Toledo City, Cebu in the West ©James Gabriel Verallo

Cebu Port in the East and Central ©Mark Ocul

In general, even in the face of these inroads the overnight ferries of Cebu using break bulk or palletized loading have held forth and are still expanding. In the main their northern Mindanao, bailiwick is still intact save for Pulauan port in Dapitan City in Zamboanga peninsula.

In Mindanao, there are only three ports with significant rolling cargo – the Pulauan port in Dapitan, the Lipata port in Surigao City and the Balingoan port in Misamis Oriental. In Pulauan ships generally connect to Dumaguete but many connect further to Cebu. In Lipata port, the traffic there is generally going north to Tacloban and further up to Luzon and not to the direction of Cebu. The RORO route to Camiguin from Balingoan, Misamis Oriental has long been developed and was initially buoyed by tourism. Recently, that route has already been extended to Jagna, Bohol.

Pulauan Port, Dapitan City ©Mike Baylon

Lipata Port, Surigao City ©Aristotle Refugio

Balingoan Port, Balingoan, Misamis Oriental ©Michael Denne

In the Visayas, the important intermodal connections going east of Cebu passes through the following: the Bogo-Palompon route, the Danao-Isabel route, the Mandaue-Ormoc route and the Mandaue-Hindang route. The ROROs in these routes mainly carry rolling cargo, usually trucks.

In Bohol, the main intermodal ports of entry from Metro Cebu is Tubigon, Jetafe and Clarin. However there is an important connection between Argao, Cebu and Loon, Bohol. There are also important connections between Negros and Cebu islands. From southern Cebu there are a lot of connections to ports near Dumaguete. In the north, the Toledo-San Carlos and Tabuelan-Escalante routes are important connections. There are also ROROs connecting Cebu island to Bantayan island, Masbate island and Camotes islands.

Tubigon Port ©Mike Baylon

Negros island is mainly connected to Panay island through the Bacolod-Dumangas route. And Panay is connected to Mindoro and Batangas through the Dangay port in Roxas, Oriental Mindoro.

From the Bicol peninsula, ROROs connect to Catanduanes (from Tabaco City) and Masbate island (from Pio Duran, Albay, Pilar and Bulan in Sorsogon). However, the main connection of Bicol now to Samar is through the town of Allen, Northern Samar via two ports of entry – Balicuatro and Dapdap. There is also an alternative route now from Benit port, San Ricardo, Southern Leyte to Lipata, Surigao City. And Leyte connects to Ubay, Bohol via Bato, Leyte and Maasin, Southern Leyte.

There are still a lot of minor RORO connections I have not mentioned. These are mainly connections to smaller islands like Lubang, Alabat, within Romblon province, to Ticao, Dinagat, Siargao, Samal, Balut, Olutanga, Siquijor, Guimaras and Semirara islands. If necessary, the ROROs in Zamboanga City can take in rolling cargos to Basilan and Jolo islands and ports in Tawi-tawi province. There is also an important RORO connection between Mukas and Ozamis City which obviates the need to go round the whole Panguil Bay.

Zamboanga Port ©britz777

The short-distance RORO sector is still growing and more routes are still being created. In its wake should come the buses, trucks, jeeps and private vehicles normally. However, in the last few years, the Arroyo government has oversold the intermodal system and in its wake is creating a lot of “ports to nowhere” and RORO routes that do not make sense. “Ports to nowhere” are ports where practically no ships call.

Strong Republic Nautical Highway(Visayas) ©Raymond Lapus

But as the cliché goes, that is a different story altogether.

More Photos of Intermodal Ports, Click here