The Current Plight of 2GO Now, Its History and What Could Be Done

According to their released Financial Statement in its Annual Report, 2GO had a Net Loss of PhP 1.349 billion (or a Total Comprehensive Loss of PhP 1.351 billion) in 2018.  In the previous year 2017, they also had a Net Loss of PhP 311 million(or a Total Comprehensive Loss of PhP 296 million) whereas in 2016 the only liner company left in the Philippines still had a Total Comprehensive Profit of PhP 387 million.  The combined losses of 2017 and 2018  were enough for the company to lose a lot in equity and now the only remaining equity of the company is PhP 2.248 billion.

https://www.2go.com.ph/IR/financials.asp

The two years of losses were roughly the period wherein Chelsea Shipping of Dennis Uy and the SM Investment Corporation of the Henry Sy family were already in charge of 2GO after the Sulficio Tagud group of Negros Navigation sold out to them for something like in the tune of PhP 6 billion.

The most likely reason for the losses was the resurgence in the price of fuel. 2GO under former helmsman, Sulficio Tagud also suffered losses (after buying out the most of the shares of Aboitiz Transport System [ATS] and combining it with Negros Navigation) when the price of fuel was high. They only crept back into the black when the world oil price slumped a few years ago.

People and even the more knowledgeable ship spotters were a little surprised when they heard that the SuperCat fleet of 2GO seems to have reliability problems because that did not happen before. Lately, they announced that they were suspending SuperCat trips to Tagbilaran for three months from May 16 to August 16. 2019. Today which is summer is peak season of travel to Bohol and for SuperCat to do that means only one thing — they are in trouble.

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News of unreliability of the SuperCats has been around already this year when apparently for no obvious reason SuperCat has been canceling voyages to Tagbilaran. For that to happen there must be maintenance and availability issues on their High Speed Crafts (fastcrafts and catamarans). It seems they are just concentrating all their available crafts in the Cebu-Ormoc route.

From what I heard, it seems St. Jhudiel and St. Braquiel are out of action because of engine and propeller problems. St. Nuriel, an older craft is also not in good shape as far as passenger accommodations are concerned. And so it seems it is only the new St. Sariel and St. Camael that are available for them and I even heard one of the two cannot reach its design speed. One engine is down?

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St. Nuriel had its last trip yesterday as it is going into the shipyard. It is already using just evaporative coolers and fans for its Tourist Class. Now, that is horrible  for a High Speed Craft which is supposed to be comfortable. How did that happen? They are sinking to the level of the old Kinswell?

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St. Nuriel after her last trip. Photo by Mark Edelson Ocul/PSSS

I heard it had become difficult to requisition parts for the SuperCats and a lot of papers had to be signed. 2GO is now run by non-shipping people from the rank of President/CEO who is also an SM top dog and so he wears many hats. Can he really hack it? The Board of Directors is also full of non-shipping people.

The SuperCats run from just before 6 AM up to 10 PM at times, especially in the Cebu-Tagbilaran route. There are only a few hours to make checks and small repairs before the crafts head out to sea again. If the crew report a problem while sailing and asks for parts and outside service, the paperwork can wait. It is the craft that cannot wait actually. Otherwise, upon company orders, the crafts will sail out again the next day and for sure the small problem will get bigger up to the point where a major service is needed and/or the craft will already be unable to sail. It seems this is what happened to SuperCat, at least in Cebu when cancellations became a li’l bit regular and now the crafts have to head out for major servicing.

Was that rigor in paperwork an acquired culture from SM? It seems that there the level of trust is not what is healthy in the shipping world where a company must pay heed to what the engineers are saying especially in a craft that runs like a bus (maybe in a freighter the parts can wait for coz anyway they don’t sail daily and a reduction in speed or a delay in voyage is not felt by the public).

If rigor is needed I think it should be in the proper servicing of the crafts which need to run safe daily. I just hope that that rigor is not a reflection of the cash position of the company which is losing equity and also cash flow. 2GO is in trouble. It either needs capital infusion or new money in terms of loans. I do not know if their plan to sell the container ships from Negros Navigation is an indication of this problem.

I have also heard that 2GO liners run slower compared to before. Was there an order to reduce the MCR to save fuel and parts and to lengthen the life of the engines and avoid breakdowns? What was that incident I heard about St. Pope John Paul II?

2GO is a little pompous in its Annual Report. Of course, they can boast how much they of the passengers from Manila as they are the only liner left in the country. Or boast too of their share of the container market. They are No. 1 after all in capacity. But almost everybody who knows shipping says their market share is falling for the have the highest cargo rates in the country.

These high container rates are not entirely of their own making but unfortunately for them, the public does not know the reasons or the history. Actually, sometime in the 1980’s MARINA, our maritime regulatory agency decided that passenger-cargo liners can charge more for cargo. After all, it is express cargo because liners are faster than the container ships which can even have more ports of call and higher in-port hours. But the bigger rationale was that in truth container/cargo shipping was actually subsidizing the passenger rates. In the 1990s, I think this policy was reaffirmed during the Ramos regime when rates were adjusted.

That policy was okay when the liner companies were also the main operators of the container ships. Sulpicio Lines, William Lines, Aboitiz Shipping, Negros Navigation, Gothong Lines and Sweet Lines dominated not only liner shipping then but also container shipping. There were very few shipping companies before which were into pure container shipping and they were all weak then. Those were basically the original Lorenzo Shipping of Jose Go (before it was sold to the Magsaysay Group), Escano Lines (which still had passenger ships in the 1980s), Sea Transport Company (which then folded up) and Solid Lines which was just small then.

But the “Great Merger” of 1996 came but then it ultimately failed. Along with its carcass, only Aboitiz Transport System remained. The great and fabled William Lines disappeared and for Gothong Lines, only Gothong  Southern Shipping and Carlos A. Gothong Lines Inc. remained although the latter is much smaller than the first and in the recent decade, they were no longer in passenger shipping. The family of Jose Go reincarnated as Oceanic Container Lines and Lorenzo Shipping is still around plus the Magsaysay Group re-established the National Maritime Corporation which they acquired from the Government and it became NMC Container Lines. All the named three are not into passenger shipping. And, of course, MARINA drove out Sulpicio Lines (now Philippine Span Asia Carrier Corporation) from liner shipping after the sinking of the Princess of the Stars.

A host of new container lines also emerged. One was formerly in passenger shipping but when this business of theirs was already losing they reinvented themselves in container shipping and this is the Moreta Shipping. Ocean Transport, a new shipping company also became a player and they are notable for using LCTs in carrying container vans. Among other new players in container shipping are Meridian Shipping, Seaborne Shipping and Seaview Cargo Shipping Corporation (the shipping company that uses the name “Fiesta” in their container vans). Asian Shipping Corporation is also chartering their LCTs to others to carry container vans.

General Romulo

Where before we have about 60 liners, now that is the number of our container ships almost a decade ago. And 2GO is the only liner company left. They might have good offices and service but they will always lose to these container shipping companies which can always offer lower cargo rates for they do not carry passengers. In passenger shipping, a motley of personnel is needed to service the passengers especially in hotel services (mainly feeding and cleaning services).

2GO simply cannot compete in this uneven field. But I don’t think MARINA realizes the field is uneven. The current people there might not even realize the wherefores and if they have old decisions and policies. They might not even realize that their decision to chop Sulpicio Lines in passenger shipping was a mistake. The medicine was simply too strong that the horse died, so goes the American saying.

If we have to have more liners it is not enough to encourage new players in the liner field as MARINA and the Department of Transportation tried to do in recent years. These container shipping companies existing now knows they are better off just moving cargo (not much people to hire, not that high cleanliness required, not much insurance to buy, limited food to stock too and they can be un-prompt in departures and arrivals). But of course, they won’t admit to that.

Maybe what is needed is to require these companies to operate liners too if they want to continue container operations. A certain ratio to container ships could be found and the size of the liner could be defined too. That is the only way to level the playing field for 2GO and for the country to have liners again. If not, I wonder how 2GO can exist in the long run with the high price of fuel of which nobody has control of. I will not be surprised if the day without liners will come.

A comprehensive study of our shipping must be done (but do we have true experts on shipping?) and this is a piece in that direction.

 

 

The Disproportionality of the Ferry Losses in the Philippines

Many times the question of if our ferries are safe is asked. This is especially true when a ferry has an accident or is lost especially when the casualty count is high. Rather than answering the question straight, if I am asked, I might answer it “it depends” because that is probably the most exact answer to the question anyway but then many will be puzzled by that answer (pilosopo ba?). Read on and you will be enlightened further and maybe your views about the safety our ferries might change.

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Even if a car is new it doesn’t mean it won’t take a dip into the water. Same principle applies with ships. Photo by Zed Garett (happened just today — what a timely photo for my article). Thanks a lot to the photo owner.

But first a clarification. I am purposely limiting this topic to ferries because tackling all the ship types at once will be very heavy and tedious as we have more freighters than ferries and add to that the other types like the tugs, tankers, etc. The ferry losses is the segment that actually raises the hackles of the people of the country who are mainly uneducated on the topic of maritime losses. This relative ignorance is further fanned by our also-uneducated media whose writers and editors cannot even seem to get the ferries’ names right (it seems they are too lazy to verify with MARINA, the maritime authority). Of course, it is well-known that our media is on the sensationalistic side and so oftentimes accuracy, objectivity and balance are lost with that (do these sell anyway?).

Another limitation I also pose here is I won’t include our wooden-hulled passenger crafts in the discussion. Those crafts are really flimsy especially those equipped with outriggers, the motor bancas. This ship type (those are ships because any sea craft having a passenger capacity of 12 is not a boat) lacks the basic safety equipment that even without a storm they can sink like when an outrigger breaks or when the hull develops a leak big enough that water can’t be bailed fast enough. But I would rather not comment on their seamanship or lack of formal maritime education because in my decades of traveling at sea I found that many of them are actually very good in reading the wind and the waves, a nautical skill that is not taught in maritime schools anymore. Also excluded in the discussion are the wooden-hulled lanchas and batels which were formerly called as motor boats which are not called as motor launches.

My topic here is about the disproportionality (or lack of proportionality) of our maritime losses to clarify that our ferry losses are not proportional with regards to the area and to the ship type (the implication is not all sink). Like what I just mentioned earlier, our wooden-hulled crafts especially the motor bancas are prone to losses especially in areas notorious for its dangerous waves like in Surigao. But these sea crafts continue to exist because in many cases these are the most practical crafts for certain routes like the routes to our small islands and islets or the coastal barrios that have no roads (or if taking the roundabout road will take too long). Motor bancas can land even on bare shores which the other crafts can’t do and moreover these can operate profitably on the barest minimum of passengers and cargo something which is impossible in steel-hulled vessels which have engines that are much, much bigger and are heavier.

The liners, our multi-day ships, among our class of ferries are also very vulnerable to losses (a surprise?) and much more than others classes pro rata to their small number. Relative to their small number, we have lost a lot of liners in the past for a variety of reasons – capsizing, foundering, beaching, wrecking, collision, fire, bombing and explosion. And this might come as a surprise to many because in the main it is our liners that are the biggest, these hold the highest of the certificates (and in insurance many have the comprehensive P & I or “Protection and Indemnity”), these have our most experienced and best crewmen supposedly (unlike in smaller ferries where a Second Mate can serve as Captain of the ship) and much pride of its shipping company is riding on them (well, not all, as we had liners that were no more than the average overnight ferry).

But this vulnerability is actually completely true. We lost the SuperFerry 3 (fire in a shipyard in 2000), SuperFerry 6 (fire while sailing in 2000 too), the SuperFerry 7 (fire in port in 1997), SuperFerry 9 (capsizing in 2009), the SuperFerry 14 (firebombing in 2000 but the official report says otherwise). A total of five SuperFerries when only a total of 20 ships ever carried the name “SuperFerry” (it seems it is not a good name?). The St. Thomas Aquinas, the former SuperFerry 2 was lost in a collision in 2013 and the St. Gregory The Great, the former SuperFerry 20 was also lost (taking a shortcut and hitting the reefs and she was no longer repaired and just sold after equipment was taken out). These two ferries were already under 2GO when they were lost. Not included here were the groundings of the Dona Virginia and the Our Lady of Banneux (technically under Cebu Ferries Corporation then but an actual liner) from which they were never repaired and ending their sailing careers).

Sulpicio Lines is much-lambasted and derided by most of our people but actually they have less losses from their “Princess” and “Don/Dona” series of ships in the comparative period as the existence of the “SuperFerries” of WG&A (William, Gothong & Aboitiz and its successor company Aboitiz Transport System (ATS). However, it is true that in passenger casualties the total of Sulpicio Lines is much, much higher because they have the tendency to sail straight into storms like the revered Compania Maritima before them (in terms of ship losses and not in casualties) and that historical company took a lot of losses from those risk-takings too (and more than even Sulpicio Lines).

From 1996 when the WG&A was formed, Sulpicio Lines only lost the Philippine Princess (fire while under refitting in 1997), the Princess of the Orient (capsizing in a storm in 1998), the Iloilo Princess (fire and capsizing while under refitting in 2003), the Princess of the World (fire while sailing in 2005) and the Princess of the Stars (capsizing in a storm in 2008) and the Princess of the Pacific (serious grounding incident resulting in complete total loss in 2004). That is until they were suspended in 2008 when only one liner was left sailing for them, the Princess of the South which did not sink.

In the comparative period, WG&A and ATS employed a total of 24 liners (the overnight ferries of Cebu Ferries Corporation was obviously not included here are they are not multiday liners). Sulpicio Lines had a total of 22 liners in the parallel period so their numbers are about even. But the ship loss total of WG&A, ATS and 2GO is clearly higher and the public was never made aware of this. Maybe some good PR works while it seems Sulpicio Lines never took care of that and all they knew was feeding their passengers well (unli rice or smorgasbord, anyone?). But then however those liner losses are scandalous in number, by whatever measure. Imagine losing more than one liner per year on the average.

Some of the liners of WG&A and ATS were not SuperFerries in name but but the Our Ladies, the two Cities and a Dona from William Lines had perfect safety records as none of them was ever lost. Now, does the choice of name matter in safety? Or the “lesser” ferries do try harder and are more careful? That discrepancy certainly made me think and it might be worth a study.

Negros Navigation was far safer than the WG&A and Sulpicio Lines losing only the St. Francis Xavier in 1999. Do naming of liners after saints enhance their safety? Conversely, do naming of liners with the qualifier “Super” means the ship will sink faster? Questions, questions. But the lightly-regarded and revived Carlos A. Gothong Lines Incorporated (CAGLI) tops them all with absolutely no losses. Now for a company that sometimes have difficulty painting their ships that is something (while the spic-and-span WG&A and ATS which repaints their liners while sailing tops the losses department). Does it mean it is better not to repaint liners well? I observed in the eastern seaboard that the ships that are not painted well have no losses (until the dumb Archipelago Ferries let its stalled Maharlika II sank into the waves in 2014 without rescuing it and thereby breaking the record – that ship was newly painted when it went under so the repainting might have doomed her?). Well, in my earlier thesis and later in this article I find it funny that the ships which are more rusty does not sink as long as it is not a Batangas ship (ah, the disproportionality again). While those that can always afford new paint like WG&A and successor ATS sink. Is a new coat of paint a sign of danger for the ship? Or is it the P & I insurance that did them in? Funny, funny. Negros Navigation when it was already in trouble and lacks the money already did not have one ship sinking. So the illiquidity which Negros Navigation suffered means more safety? Har, har! Whatever, I want to commend them and top honcho Sulficio Tagud for taking the high road and not just let the ships sink just to collect insurance. And last note, in multi-day liner operations before, Aleson Shipping Lines never lost a ship.

Liners sink at a faster rate pro rata compared to overnight ferries (if the wooden-hulled ferries of the past are not counted) and that is a big puzzle to me. And of course nobody will know for sure because nobody studied that as we don’t have the equivalent of the National Transportation Safety Board (NTSB) of the USA which call in true experts and go in depth why the transportation accidents happened. Is it because while on a voyage the liners are practically running 24 hours a days and systems, equipment and personnel are stressed more? Is it because the ships reach their reliability/cycles earlier in terms of hours of usage like the electrical lines which is a cause of fire? Or are their crew simply more tired and believes that their ships with high certifications are less vulnerable to sinking (as if those certificates will keep the ship afloat)?

In the earlier decades and even recently it is known that liners take more chances with storms and maybe because they think they can battle the waves better because they are bigger. There are shipping companies who were known to be more brave (or foolhardy?) in sailing ships when there are storms about and among them the old Compania Maritima and Sulpicio Lines almost surely top the list. Now, however, the field is more level as all Philippine ships are barred from sailing when the center wind of the storm reaches 60kph. And for the smaller ships less than 250gt they are not permitted to sail when the center wind is already 45kph or when the local weather agency PAGASA declares a “gale warning” even though there is no a gale. When the suspensions are in effect better just watch the foreign ships still continue sailing for they are not covered by the suspension and most actually use INMARSAT or equivalent which is just a curiosity in the local maritime world until now when that is already well-established outside of the Philippines (the lousy PAGASA which can’t do localized forecasts seems to be already good for them since it is free while they have to pay for INMARSAT).

Liners also sink faster than short-distance ferries whose sailing durations are all short and whose crews probably know their particular seas and routes more. When to think most short-distance ferries which are always small are captained in the main by Second or Third Mates and whose engine department are headed by Second or sometimes by just Marine Diesel Mechanics who have not even finished college but passed an exam just the same (well, competence in running and maintaining a machine well is not necessarily dictated by diplomas, trust me). Even though liners might be using ECDIS don’t be too sure they will reach their destination better than the lowly short-distance ferry using just what is called as dead reckoning. In truth, ECDIS or whatever better bridge equipment does not guarantee better seamanship or navigation. After all it will not show the wind and wave which only something like INMARSAT can.

So in liners disproportionality already exist. And their international certifications don’t even save them from disasters. So, I advise those who take liners, don’t be very sure and make the necessary precautions like memorizing the different alarms and making sure where your life vests are. And don’t jump to the water too early. Liners are tall and that plunge could hurt you. And when in the water at night tie yourselves together so as not to drift (a whistle is a big help in calling attention if you are drifting). Note the water can be cold at night and hypothermia can set in. Take a selfie too before jumping and upload it. Who knows if it will be your last photo. Your loved ones will sure prize it. Ah, don’t take all I said in this paragraph too seriously.

In overnight ferries there seems to be disproportionality with regards to companies and not to home port (if analyzed pro rata to the size of the fleet which means the size of the fleets are taken into consideration) and to the routes. Well, for practical purposes there are only a few home ports for overnight ferries – Cebu, Zamboanga, Batangas, Manila, Lucena and Iloilo, in that order maybe in terms of sailings (a clarification, there are overnight ships originating from say northern Mindanao but all of those ferries are actually based in Cebu). Analyzing, some overnight ferry companies deserve the Gold Award while some should be suspended from service, maybe.

It must be noted that one of the biggest overnight ferries two decades ago and which dominated the Visayas-Mindanao waters for nearly a decade, the Cebu Ferries Corporation (CFC), a subsidiary of WG&A and successor Aboitiz Transport System (ATS) did not lose a single ship ever until it they left Cebu for Batangas and became the “Batangas Ferries” and even there their perfect streak continued. Maybe some of their people need to be recruited by other companies or sent there by MARINA to share the experience. They can lecture on the topic, “On How Not To Sink”. Maybe it is not just with the choice of name that they were safe? Or was it in the livery? The only problem it seems is they did not send their Captains to their liners like the St. Thomas Aquinas who made a dumb mistake trying to test the hardness of the ice-classed bow of the Sulpicio Express Siete.

In the Cebu-based regional shipping companies which are operators of overnight ferries it is probably Lite Ferries who is the Valedictorian having lost no ships even though their fleet is already big. Maybe that will come as a surprise to many but whatever they deserve a big round of applause. Another company whose Captains might need to be recruited by other shipping companies or pry open their secret if there is any. Are they better readers of SOLAS? One thing I am sure though is its owner does not belong to the same fraternity as one former Batangas shipping company owner who threatens mayhem if his ship sinks.

There are other overnight ferry companies in Cebu that could have shared First Honors with Lite Ferries but in a tie-breaker Lite Ferries wins because they have the most ships and not by a small margin at that. Others with perfect records are the defunct Palacio Lines (well, some might argue that that is a Samar shipping company but I digress). Now I can’t understand why an overnight ferry company with a perfect safety record will go under as a company. Seems something is not right. Aside from Palacio Lines there are a lot of there Cebu-based overnight ferry companies that have perfect safety records in terms of having no ship losses. Some of these are still extant and sailing and some have already quit the business (it’s a waste, isn’t it, for them to just go away like that).

Among these is the legendary Gabisan Shipping Lines, VG Shipping, Kinswell Shipping, Roly Shipping, Jadestar Shipping, South Pacific Transport and many other smaller shipping lines with just one or two ships (most of these are already gone now but still their perfect records remain). I just don’t know why they can’t catch a break from MARINA as in they are not given special citations and handed more privileges in sailing because after all they have proven they know their stuff in shipping. But no, when MARINA goes headhunting in safety they are lambasted in the same vein as those which had sunk ships as if they are just as guilty. Actually, to set the record straight about half of the overnight ferry companies in the whole Philippines never had any ship losses. This is true even in Zamboanga where Magnolia Shipping Lines, Ever Lines and a lot of other operators with just one or two steel-hulled ferries have perfect safety records. Now, can’t MARINA even for once credit them properly and publish their names because the way I feel at times with media reports and with MARINA statements it is as if all our shipping companies already had sunk ships which is simply not the case. In the liner sector that is true but in the overnight ferry and short-distance sector, combined, most shipping companies never had any ship losses. Don’t they deserve credit and more respect and recognition? But no, they are sunk not beneath the waves but in obscurity and that is one of the purpose of this article, to set the record straight.

In Manila, the old MBRS Lines and its successor Romblon Shipping Line never lost a ship (but the company is dead now anyway, sunk by the intermodal). In Lucena, Kalayaan Shipping Lines might have a perfect safety record too at least in steel-hulled ferries. In Batangas, there are operators of just one or two ferries which have not lost a ship (do they take care not to lose one because that will mean the shutdown of operations?). In Iloilo, did Milagrosa Shipping Lines already lost a ship? In number half of the overnight ferry operators never lost a ship although in the number of ships owned theirs comprise just the minority, to clarify.

It is in short-distance ferries that I noticed a lot more of disproportionalities especially in the recent decades when maritime databases were able to keep track with them (the wooden-hulled short-distance ferries generally doesn’t have IMO Numbers so keeping track of them is difficult but these lanchas or batels were our early short-distance ferries aside from the motor bancas). For this sector or segment I would rather stick to steel-hulled ferries like what I mentioned early on especially since there is no way to track the hundreds and hundreds of motor bancas and their losses which are not even properly reported at times.

There are areas, routes and short-distance companies that have perfect safety records (again, wooden hulled ferries are not included here and that also mean the earlier years). In the eastern seaboard where the typhoons first strike and where it is fiercest the routes and shipping companies there have a perfect safety record ever since the steel-hulled ships first appeared in 1979. This was only broken in 2013 due to the dumbness of a stranger which invaded the Masbate waters (is that part of the eastern seaboard anyway? but Masbate is in Bicol). They withdrew from Bicol after that incident to just sail the more benign Camotes Sea waters. And that is one of the reasons why I was furious at Archipelago Ferries for not coming to the aid of their stalled ship for 6 hours when their good ship was just just two hours sailing away and so the stricken ship slid off the waves (shouldn’t someone be hanged for that?). Because of that the perfect record of the local shipping companies based in the eastern seaboard was broken. I just hope the crewmen of Maharlika Cuatro which failed to respond to an SOS then are not employed in the FastCats now.

Short-distance ferries also does not sink in the Tablas Sea crossings or in the routes to Marinduque from Lucena. However, I do not know what is the curse of the Verde Island Passage that many ships have been already lost there when to think practically the same shipping companies ply the three routes mentioned. To think the Tablas Sea wind and waves could be rougher than that in Verde Island Passage. Did they assign their lousier crews there? Just asking. As they say the proof is in the pudding (and the pudding tastes bad).

I just wonder too about the luck of the Mindanao Sea crossings. The waves there could also be rough and the crossing is longer but none was ever lost among the short-distance ferries running the Dumaguete-Dapitan, Samboan-Dapitan and Jagna-Balingoan routes. Like in Tablas Strait, do the longer route makes the crews more careful? Are the crews there better trained and has better seamanship?

The many routes connecting Cebu island and Negros island and Negros island and Panay island are also safe. Hard to find there a short-distance steel-hulled ferry that sank. That is also true for the steel-hulled ferries connecting Masbate island to Cebu island when the distance there is also long for a short-distance ferry and the wind and waves are no less dangerous. What is their secret there? Is it just that Camotes Sea navigators are lousier? With exceptions, of course because Gabisan Shipping surely will not agree.

I could go to the less obscure, short-distance routes. Just the same I will tell you these are also safe. Never heard of a steel ferry going to Alabat that sank. Or to Dinagat and Siargao islands (sure their motor bancas sink). Or the routes to Basilan from Zamboanga. Not even a RORO to Guimaras have sunk or a RORO to Bantayan island. That is also true for the short-distance connections within Romblon island served by steel-hulled ships (the Princess Camille that capsized in Romblon port in 2003 was an overnight ferry from Batangas). No steel-hulled ferry connecting Leyte and Bohol was ever lost too. And that is also true for the route connecting Siquijor to Dumaguete.

So a lot of our short-distance routes and the ferries plying them are actually safe. Who can argue against a perfect safety record? A little rust will not sink ships nor would a non-functioning firefighting pump (and the ship is not in the middle of an ocean anyway). Those are just a little margins that are not that critical. Does not look good to the eye but to a passenger like me it is more important if MARINA enforces their Memorandum Circular that ferries should feed its passengers if the arrival of the ship exceeds 7am. And I am more concerned if the ship is clean especially the rest rooms and if there is clean drinking water. Besides, trust me, our mariners are not that negligent or dumb that they will leave the ramps unclosed and then sail like what some Europeans did.

So are our ferries safe? Yes, it is except for the liners, some shipping companies and some routes and areas. Never mind if they are old. It is not necessarily the factor that will sink ships (a ship if it loses motive power still has the flotation of a barge). It is actually the lack of seamanship that sinks ships (old ship, new ship can both collide or fail to heed the weather). And trust the short-distance ferries on the fringes and don’t underestimate them. The crew won’t let their ships sink if their families, relatives, friends, schoolmates, etc. are aboard. Well, not all. Be a little wary in Verde Island Passage and in Camotes Sea.

Let us be more objective. Our ferries and mariners are not really that bad, contrary to what hecklers say.

Chelsea Shipping Is The New Goliath of Philippine Shipping

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The Chelsea Dominance. The declaration of intent?

When the “new shipping world” was being built there was Phoenix Petroleum first which was not into shipping anyway. Many thought Phoenix Petroleum would end up like the “independent” oil players then which had a few gasoline stations here and there but were never a threat to the major oil players which have foreign genes. But with the smiling face of the world-famous Manny Pacquiao as mascot, Phoenix Petroleum grew until it challenged the Big 3 which were Petron, Shell and Chevron (which was the former Caltex and Mobil). That was blasphemy for the oldtimers which saw Filoil never got anywhere before.

Phoenix Petroleum got far because they changed the rule of the game. Where before local oil companies had to invest in local refineries to be granted permission to operate, Phoenix Petroleum simply had to import fuel from Singapore and it so happened in Southeast Asia oil prices are only high in the Philippines because a lot of taxes are tacked on to the price of fuel as oil is the milking cow for taxes of the government which rules a vast horde of people exempted from paying taxes because they are too poor.

Along the way to being the fourth Oil Major, Phoenix Petroleum established Chelsea Shipping to handle their fuel transport needs and the company operated a fleet of tankers. But Chelsea Shipping never operated the biggest tanker fleet in the country and their fleet never exceeded ten tankers.

But this year, 2017, Chelsea Shipping made a lot of sea-shaking moves in shipping. Early this year rumor leaked out already that they have already acquired majority control of Trans-Asia Shipping Lines Inc. (TASLI), a Cebu-based regional shipping company with Visayas-Mindanao routes. A bare few months later a boardroom fight erupted in 2GO, the only national liner shipping company left when Dennis Uy, the principal of both Phoenix Petroleum and Chelsea Shipping tried to claim what they felt was their rightful representation after buying shares and the old management group represented by Sulficio Tagud, the old top honcho resisted. But in the end Tagud and company waved the white flag after 2GO gained market value because of the fight and Dennis Uy took control of 2GO.

Weeks passed and the local shipping world was rocked again by a new development when it was announced that Chelsea Shipping is acquiring Starlite Ferries Inc., a Batangas-based regional shipping company lock, stock and barrel. Starlite Ferries has routes to and from Mindoro and its fleet is being reinforced by newbuilds from Japan acquired from a loan from a government-owned bank. It seems the coffers of Phoenix Petroleum and Chelsea Shipping are overflowing to the brim. Is there another acquisition in the making?

Chelsea Shipping now has foothold to the top three passenger shipping hubs in the country which are Cebu, Manila and Batangas. In tankers they are also strong in another hub which is Davao which has the cheapest fuel in the whole country courtesy of Phoenix Petroleum and which piqued Ramon Ang enough that he chopped the fuel prices of Petron. And so Davao fares remained among the highest in the country. Does it make sense? Nope. Maybe it is the moves of Chelsea and Dennis Uy which only makes sense.

I do not know if a second “Great Merger” will happen in Philippine shipping after the first “Great Merger” of 1996 which created William, Gothong and Aboitiz or WG&A, the predecessor company of 2GO. That first one ended in disaster and it only resulted in the death of two great historical shipping companies.

Will history repeat itself? I have my doubts. This time around there is only one top honcho which is Dennis Uy unlike before there was a big merged company with three heads pursuing some kind of a mirage. Actually it could be great for Philippine shipping as Dennis Uy and his patron are both loaded and might have the money to make moves in shipping without going to the banks. Who knows if the moribund shipping industry is revived with their coming?

Now if only Manny V. Pangilinan (MVP) bought out Negros Navigation Company (NENACO) outright some 15 years ago instead of being just a “white knight”. NENACO is one of the merged companies in 2GO. We really need investors with deep pockets in shipping. That is what might turn things around and not due to some government blah-blah.

Is there a renaissance of Philippine shipping in the horizon?