Sea transport firms benefiting from Sulpicio Lines’ woes

MANILA, Philippines - The local shipping industry remains afloat, hardly affected by the sinking of Sulpicio Lines, Inc.’s M/V Princess of the Stars, the country’s worst maritime disaster in two decades. According to the Philippine Inter-Island Shipping Association (PISA), passenger volume is unchanged, showing that people are moving to other sealiners while Sulpicio Lines’ ships are grounded. Sulpicio Lines sails 22 vessels to 29 ports around the country. Its operations have been put on hold since the latest sinking. Gian Galvez, spokesman of rival Negros Navigation, said the company has observed a slight increase in passenger volume in select destinations, particularly going in and out of Dipolog City and Cagayan de Oro City — routes it shares with Sulpicio Lines. Aboitiz-led Superferry, the country’s largest sea transport firm, declined to comment on the disaster’s effect, if any, on its performance. The Cebu-based sealiner operates the same routes where the bulk of Sulpicio Lines passengers go. Superferry is not a PISA member. At least 845 persons were aboard the M/V Princess of the Stars when it ran aground off Sibuyan Island on June 21 during a typhoon and capsized. Only 56 people are known to have survived. In an interview, Sulpicio Lines Vice-President for freight operations Jordan L. Go said the company "has not assessed the [disaster’s] impact on [our] business." "We are prioritizing the victims’ relatives," he added. Ma. Victoria Lim-Florido, spokesman of Sulpicio Lines, likewise declined to detail their daily losses. She said the company "plays an important role in the domestic trade." "We have a big chunk in the flow of goods in the country," she added. But an official from a smaller passenger and cargo shipping firm operating from the Visayas estimates that a shipping line loses an average of P3 million daily for every grounded passenger boat. The cost is higher for a cargo boat at P4 million daily. Vicente T. Suazo, Jr., administrator of the Maritime Industry Authority (MARINA), said there is no direct link between the disaster and a possible slowdown in sea passenger travel. "Disaster or no disaster, this is the lean season," he pointed out, noting that travel frequency normally dips starting in June. "Probably, people have a tendency to move around less since it’s the typhoon season," he added. Cargo vessels operational Meanwhile, cargo vessels of Sulpicio Lines have not been grounded by the government, Mr. Suazo said. He said they had allowed the cargo vessels to operate "to prevent a disruption in the movement of cargoes in the country." The Transportation and Communications department earlier ordered the MARINA to ground all vessels of Sulpicio Lines and conduct an audit to check the ships’ seaworthiness. "The initial directive [of Transportation Secretary Leandro G. Mendoza] was to ground all [vessels], but they noted that the grounding might lead to economic problems since [Sulpicio Lines] has big operations in the cargo shipping industry," Mr. Suazo said. "The secretary had me change the decision by allowing the cargo vessels... to temporarily run until we finish the audit of passenger vessels. That would be the time we would ground all cargo vessels," he added. Eight passenger vessels out of 14 have been audited thus far, Mr. Suazo said, adding that they would be inspecting seven cargo vessels of the company. He neither confirmed nor denied reports that they had found deficiencies on some ships of the embattled shipping company, saying they were still awaiting the audit reports of electrical, mechanical and naval engineers and architects. Agriculture Secretary Arthur C. Yap said almost all commodities depend on the shipping industry and 40% of it is operated by Sulpicio Lines. On Tuesday, President Gloria Macapagal-Arroyo told transportation officials to meet with the shipping firm on the possibility of allowing its freight operations to resume to minimize the economic effects of the grounding. The sinking of the Princess of the Stars is the worst maritime accident in the Philippines in about 20 years. In 1987, more than 4,000 people died when passenger ferry Doña Paz collided with an oil tanker in the central Philippines. Sulpicio also owned the Doña Paz. — Paolo Luis G. Montecillo and Bernard U. Allauigan/BusinessWorld