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LINER SHIPPING ROUTE STUDY

FINAL REPORT

VOLUME VIII

MBOANGA & SULU ARCHIPELAGO SHIPPING SERVICES

EVALUATION REPORT

November 1994

Submitted to

United States Agency for International Development

Manila, Philippines

Support for Development Program II:

Philippine Sea Transport Consultancy

Project No. 492-0450

Prepared by Nathan Associates Inc.

under Contract No. 492-0450-C-00-2157-00
FOREWORD

The Liner Shipping Route Study (LSRS) and the MARINA and

SHIPPERCON STUDY (MARSH Study) were conducted, during 1993-1994,

under the Philippine Sea TranspoMA Consultancy (PSTC). The Final

Report of the LSRS comprises 14 volumes and the Final Report of the

MARSH Study comprises 5 volumes.

This technical assistance was made possible through the

support provided by the Offic' of Program Economics, United States

Agency for International Development (USAID) Mission in the

Philippines. The views, expressions and opinions contained in this

and other volumes of LSRS Final Report are those of the authors and

of Nathan Associates, and do not necessarily reflect the views of

USAID.
PageiNumher

INTRODUCTION & SUMMARY OF FINDINGS
1

Introduction
1

Summary of Findings
3

Cargo Services
3

Passenger Services
5

ZAMBOANGA & SULU ARCHIPELAGO LINER SHIPPING

I & FERRY SERVICES
9

Introduction
9

Shipping Operators, Routes & Vessels
9

Route Capacity Analysis
17

CARGO SERVICES EVALUATION
29

Introduction
29

Ports & Cargo Traffic
29

Capacity and Standards of Cargo Service
36

Charges for Cargo Services
41

PASSENGER SERVICES EVALUATION
45

Introduction
45

Passenger Traffic
45

Passenger Service Standards
57

Passenger Fares
67

FACTORS AFFECTING SERVICE ADEQUACY
69

Introduction
69

Government Regulation and Control

of the Zamboanga-Sulu Archipelago

Shipping Industry
70

Port Development and Operations
72

Basilan Island Road Development
73

Peace and order
74
6. APPROACH TO IMPROVING SERVICE ADEQUACY 75

Introduction

75

MARINA Actions for Shipping Service Improvement 75

Development of the Zamboanga MRO
75

RORO Vessel Operations 76

Franchising New Services
79

PPA Actions for Port Service Improvement 79

Rationalized Use of Port Facilities
79

Vessel Departure Clearance 80

PCG Actions for Shipping Service Improvement 81

Annex A

Results of the LSRS Zamboanga & Sulu Archipelago

Cargo Surveys

Annex B

Zamboanga & Sulu Archipelago Passenger Survey Results

Annex C

Zamboanga Peninsula & Sulu Archipelago

Economy and Trade
1. INTRODUCTION & SUMMARY OF FINDINGS

Introduction

The terms of reference (TOR) for the Liner Shipping Route

Study (LSRS) specify, as one objective of the study, that the LSRS

shall "survey and review the adequacy of existing liner shipping

services, including ferry services, in the Philippines, and ...

identify priorities for new franchises and franchise amendments to

provide expanded services, new types of services, and better

standards of service". The workscope section of the TOR states

that, "The LSRS must identify, from shipping operators reports on

operations, from SHIPPERCON records, and from extensive
field

interviews with users of cargo and passenger liner services, the

standards of services being performed on each liner shipping route,

including especially the availability of appropriate services,

convenience of schedule, service reliability, passenger care and

comfort standards, and safety considerations...". The TOR go on to

state that, "current low service standards, as well as high load

factors, annually or seasonally, are to be criteria by which the

LSRS will identify needs for- increasing service frequency,

including just seasonal frequency increases, and for approving new

route franchises".

The TOR also identify the limits of LSRS responsibility

regarding shipping service evaluation stating that, "It is not

expected
that the LSRS will recommend precise adjustments to

service schedules, but merely will indicate where, and the

approximate extent
to which, service schedule flexibility should be

incorporated in existing and new route franchises, and to
indicate,

approximately, the new route franchises that should be approved

during the cargo rate deregulation period, i.e., 1993-1996", and

further that. "It will subsequently be the responsibility of MARINA

LO i1nvite applications for new or expanded services, and then
to

evaluate applications received...".

To carry out the shipping service evaluation portion of the

IPS workscope, the LSRS divided the areas to be surveyed into six

groups:

- Northern Islands. The areas surveyed include the islands
of Mindoro. Marinduque, Romblon, Tablas, Sibuyan,

Masbate, and Catanduanes, and survey ports include the

principal ports of these islands, as well as the
Luzon

ports of Manila, Batangas, Lucena (Dalahican), Tabaco,

and Legaspi.

Eastern Visayas. This survey area is Region VIII of the

Philippines, and ports where LSRS surveys were
conducted

included Tacloban and Catbalogan.
- Central & Western Visayas. This area corresponds to

Regions VI and VII..LSRS survey ports included Cebu,

Iloilo, San Jose De Buenavista, Dumaguit, New Washingtop,

Culasi, Bacolod, Dumaguete, San Carlos, Tagbilaran, and

the ports of Guimaras Island.

- Northern Mindanao. This area approximately corresponds
to Region X and the northern provinces of Region XII, and
includes the survey ports of Cagayan de Oro, Surigao,

Nasipit, Iligan, and Ozamis.

- Southern Mindanao. This area approximately corresponds
to Region XI, the southern provinces of Region XII, and
the mainland provinces of the Autonomous Region of Muslim
Mindanao (ARMM), and includes the survey ports of Davao,
General Santos, and Cotabato/Polloc.
Zamboanga & Sulu Archipelago. This area includes the

ARMM offshore provinces of Sulu and Tawi Tawi, Basilan

Islanu, and most of the Zamboanga Peninsula, and ports

where LSRS surveys were conducted include Zamboanga,

Pagadian and Jolo.

The LSRS prepared a draft shipping service evaluation report

on each of the six areas identified above. In this Final Report,

however, the Northern Mindanaotand Southern Mindanao reports have

been combined in Volume VII. The other service evaluation reports

are Volumes IV through VI, and Volume VIII.

The shipping services of Palawan Province are discussed in the

Final Report's Volume IX, wherein the LSRS focus
is mainly on the

needs for additional services, rather than on the improvement of

existing services.

The port of Manila North Harbor (MNH) is discussed to some

extent in most volumes of the Final Report, because of the

importance of shipping connections to the MNH for all other areas

of the. Philippines. The principal discussion of the
MNH. is

included in Volume XII, however,
which focuses on the potential

ro!e of Batangas Port as a terminus for interisland liner shipping

services.

Northern Luzon and the Bicol Peninsula have very limited

interisland liner shipping services, in 1994. The LSRS did not

conduct any developmental route evaluations for these two large

areas of Luzon, but both areas are discussed in Volume III of this

Final Report, which provides profiles of
the sea trade of various

areas and islands of the Philippines.

Each of the five service evaluation reports examines tLhe

adequacy of both cargo and passenger liner shipping and ferry

services, identifying: routes that are franchised and the extent to

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which they are being operated; operators and vessels, with vessel

rated or estimated capacities; route capacities
for passenger

traffic and capacity utilization, including seasonaity; shipping

service standards and problems; underlying, contributory causes for

anv identified low service standards and problems; and desirable

actions
to be taken to better ensure that shipping service

standards are satisfactory in the future.

After this brief introduction,
each of the shipping service

evaluation reports presents its findings and recommendations as the

remainder of Chapter 1, and is comprised of five other chapters and

two or three annexes. Chapters 2 through 6 of each report present,

respectively, available
information on
services franchised and

operated, an evaluation
of cargo services, an evaluation of

passenger services, the identification of factors affecting service

adequacy, and a recommended approach to improving the adequacy of

services. Annexes A and B, in each of the five
reports, provide

detailed cargo and passenger survey information, respectively.

Volume VIII of the LSRS Final
Report discusses the shipping

services being provided, in 1993-1994, to ports of the Zamboanga

Peninsula, Basilan Island and Sulu
Archipelago area (ZAMBASULA).

Unlike the other four
volumes. of the LSRS service
evaluation

subset, Volume VIII includes a third annex which examines the

economy and trade of the geographic area being studied.

Summary of Findings

LSRS findings in regard to
the liner shipping and ferry

services performed
to ports of ZAMBASULA are presented in the

following paragraphs.
Cargo services are first discussed, and then

passenger services are discussed. However, much of the cargo being

moved by sea in the area is carried in small consignments,

essentially as accompanied or unaccompanied baggage. Thus, the

standards of passenger services also reflect or the
availability

and quality of a significant portion of the
area's cargo services.

Cargo Services

A large proportion of the cargo being moved in
the ZAMBASULA

area passes through the port of Zamboanga, so that the adequacy of

this port affects the quantity and cost-effectiveness
of trade

throughout the
area. In the truest sense of the term, Zamboanga is
the "hub" nort for all of ZAMBASULA. In 1993-1994, cargo services
at Zamboanga Port were mostly adequate, and shippers of Basilan and
the Sulu Archipelago seemed to have
few complaints regarding

shipping services to and from Zamboanga Port, or regarding the port

itself. There were, nevertheless, four problems areas in regard to

ZAMBASULA liner shipping and ferry cargo services which need to
be

3
addressed. These four areas are:

Containerized cargo between Zamboanga and Cebu.
In 1993­
1994, no container services were
being operated between

the principal ports of Zamboanga and Cebu. For

containerized cargo to be transported between these
two

ports, it was
necessary that the containers be

transshipped at Manila North Harbor (MNH), which entai
cd

considerable incremental cost and time,
in compariSon

with the potential
cost and time which would be incurred

with direct shipment of containers between Zamboanga and

Cebu.

Arrastre workers in Sulu Archipelago ports. Shipping

operators accommodating significant amounts of cargo, and

particularly heavy cargo, were having
to recruit and

accommodate cargo-handling labor aboard their vessels in

sailing from Zamboanga to
ports of the Sulu Archipelago,

since the cargo-handling contractors
at the SulU

Archipelago ports
did not have sufficient labor, and

labor that was available was frequently unwilling to

handle heavy cargoes. Also, iabor at these ports was

generally unavailable for work in the evening
and

nighttime hours.
Whereas shipping operators were not

.nclined to complain to the LSRS about these
operating

conditions, they did axpress an interest inconverting to

the use of RORO vesseTs, in order to considerably reduce

their needs to rely on arrastre labor.

Cargo services at Siasi. Shipping operators were

sometimes bypassing the island and port of Siasi,

although they generally did not do this in both

directions (between calls
at Jolo and Bongao). The

operators indicated that they bypassed Siasi on occasions

when another vessel was already docked at
the principal

berth
at Siasi Port, and they sometimes also were

avoiding the port because of the
large numbers of "free

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ew weerCreoea sbtbe eiiGnnugga rirdse
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Ferry services between Basilan Island and Zamboanga. The

ferry services which were being operated between Basi Ian

and Zamboanga, in 1993-1994, were not designed
to

accommodate large amounts of breakbulk cargo, and the

increasing levels
of cargo traffic were being

accommodated with some difficulty by the ferries.
The

greater concern in regard
to these ferry services,

however, was that the ferries were only serving a portion

of their potential hinterland, due
to a poor Basilan

Island road network, and due, also, to problems of civil

disturbance on the island,
a lack of security on the

4
roads, and additional charges incurred at road

checkpoints.

Charges for cargo services between Zamboanga and ports of the

Sulu Archipelago were high, in 1993-1994, in cumparison with MARINA

official fork tariffs for cargo, but none of
the shippers

interviewed by the LSRS complained about service charges.
Charges

for the accommodation of rice were being kept much lower than other

cargo charges.

Passenger Services

The LSRS conducted passenger surveys on the Manila-Zamboanga

route. on both ferrr
routes between Zamboanga and Basilan Island,

on three
liner shipping routes extending from Zamboanga to ports of

the Sulu Archipelago and (.in one case) to the island of Cagayan de
Tawi Tawi, and on one coastal route. The principal findings of
lhesc surveys are presented below.
Zamboanga-Manila Route.
The LSRS surveyed the Maynilad and

LI,,S
uperferry ITl on routes
having Zamboanga as an intermediate

port-of-call. Of the 00 passengers
interviewed who were destined

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ti7s7f atcot o9r7y . percTehnets)e

aspects included service sufficiency, convenience, reliability, and

speed; the cleanliness and comfort of the vessel, and the space to

move about; operator staff (afloat and ashore)
efficiency and

attitude; the perceived attitude
of management toward service

qu;IlitY; the' operator's space reservation system; the boarding

process, and the waiting area before boarding; baggage security;

and meals, meal service, and drinking water supply
on the vessel.

Zamboanga-Basilan Island Ferry Services.
The LSRS

interviewed passengers aboard three of the
four ferries that were

operating between Basilan
Island and Zamboanga, in late 1993 and

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rthaet ed0 assielravni cepo rhti gohfl yL amiint arne.g arPda sstoe ngseurfsf iacbioeanrcdy , alclo ntvherneiee nvcees sealnsd

reliability, and large proportions of the passengers expressed the

opinion that services had improved over the past two
years.

Passengers on
two of the vessels were nearly unanimous in approving

of the cleanliness and comfort of the vessels, and more than 80
percent of these passengers were satisfied with service speed. The
third vessel was considered to be slow by more than half of its
passengers, but 83
percent of the vessel's interviewed passengers

were satisfied
with the vessel's cleanliness and comfort.

Passengers aboard all three vessels rated
the respective crews

highly in regard to their efficiency and their attitude toward the

passengers.

5
Zamboanga-Jolo Liner Services.
The were 23 passenger/cargo

vessels serving the Zamboanga-Jolo route, in November 1993, but not

all of these had posted schedtiles. The LSRS surveyed six of the

vessels, and obtained a sample of 244 passengers who were destined

for Jolo. Other passengers aboard three of the ve:sselsa were

traveling beyond .olo, i.e.,
to Siasi. Rongao or Sitaogkai. Furvey
results were quite different among the vessels surveyed, as only
two of the vessels, the MV Nafiesa-A and tile MV M'lerlyn , were ratud
quite highly by their passengers. De'spite low grades eared hv
some of the vessels in regard to several aspects of ph "%: ical
accommodation, however, majorities of passengers on each of the1­
vessels considered services to be at least "fair"
in reard to;

sufficiency, convenience, reliability and speed, and considered the

efficiency and attitude of the respecLi v
e crews of the vessels anid

operator shore-based staff to be satisfactory.

Jolo-Siasi-Bongao-Sitangkai
Liner Services. Several of the

liner vessels serving the Zamboanga-Jolo route were continuing

onward from Jolo to the ports of Siasi,
Bongao and Sitangkai.

Three of
the vessel surveyed by the LSRS on the Zamboanga-Jolo

route continued onward, and the survey obtained samples of 16
passengers destined for Siasi, 42 going to Bongao, and i5

continuing onward to Sitangkai. In addition, the LSRS conducted a
survey at Jolo, interviewing another 36 passengers traveling to
the

island of Tawi Tawi (Bongao Port). Majorities of the passengers ir,

each case rated services as sat-sfactory in regard to sufficiency,

convenience, and reliability, and most passengers also held

favorable opinions of operator afloat
and ashore seaff. Views in

regard to standards of physical accommodation were less generally

favorable. Most passengers
bound for Siasi consldeied their

seating and sleeping areas to be unclean and
uncomfortable, and

thought that the vessel open areas
for passengers were inadequate.

Bongao-bound passengers expressed unhappiness only with the
state

of the toilets and washing facilities and the lack of drinking

water, although those boarding a vessel at Jolo were also unhappy

with the waiting area before boarding the vessel and with the

process of boarding.

Zamboanga-Cagayan de Tawi Tawi Route.
The LSRS surveyed the

MV Mocking Bird on
this route, obtaining a sample of 50 passengers.

Majorities of
the passengers (generally ranging between 63 and 73

percent) expressed favorable views in regard to al, aspects of

services. When the rating of "fair"
is included among "favorable"

views, the proportion of passengers offering such views rises
to 05

percent in regard to service sufficiency and convenience and to 85

percent in regard to schedule adherence.

Zamboanga-Pagadian Coastal Services.
The LSRS interviewed 113

passengers aboard a coastal vessel. These
passengers gave the

service relatively low grades, with the exception that they
were

generally approving of both the ashore and the afloat staff of the

shipping line,
and the majority of passengers felt that the

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