Philippine cargo carrier Solid Shipping Lines (SSL) is set to replace two of its ageing vessels in an effort to boost operational efficiency and competitiveness. SSL said it is soliciting offers from international vessel suppliers as well as looking for buyers for its old vessels.
SSL general manager Quirimon Tan told PortCalls the company is looking at acquiring bigger-capacity vessels. “Based on our schedule, we are replacing two of our oldest vessels with brand new ones and bigger capacity to make us more responsive to current economic times,” Tan said.
“We are now likely to bring in vessels with a capacity of about 300 twenty-foot equivalent units compared to the existing capacity of only 250 TEUs,” he added.
Tan said the vessels may be launched this year or early next year.
SSL, one of the top-five cargo carriers in the Philippines, transports about 100,000 TEUs annually. It currently has a nine-vessel fleet servicing routes between Manila and three ports in Mindanao (Davao City, Cagayan de Oro City and General Santos City) on regular weekly schedules.
Tepid growth
SSL is likely to end the year flat due to tepid cargo volume growth.
“We are okay. We are happy with our current state and just trying to maintain it while waiting for sunny days,” Tan said, adding that demand is not enough for shipping firms to post even modest growth this year.
“We are looking at a flat growth this year or at best 3% volume increase due to continuing slowdown of the Philippine economy,” he said.
“The continued refleeting of local carriers to bigger capacity vessels is likewise taking its toll on the industry,” he added, translating to even greater competition.
Overcapacity in the local trade has affected profitability of local carriers; utilization is down to about 75% from 80-90% two to three years ago.
At the moment, finished products account for the bulk of volume for SSL and most shipping lines; agricultural products, which used to be one of the biggest growth areas for carriers, have not performed as well.
Earlier, domestic cargo carriers said they are not so upbeat about volume and revenue prospects for the year due to the slow economy.
The Philippine Liner Shipping Association (PLSA) said its members are bracing for tough business conditions this year.
SSL is a member of PLSA along with Negros Navigation, NMC Container Lines, Oceanic Shipping Lines, Lorenzo Shipping Corp. and Philippine Span Asia Carriers Corp.
Photo from http://solidshipping.com/index.php
