LOCAL cargo carrier Lorenzo Shipping Corp (LSC) is keeping operations at its current pace at least for the next three years.
The expected growth in the country’s gross domestic product of 5-6% and the 7-8% hike in cargo volume this year are “too thin” and not enough to warrant immediate business expansion, according to LSC president Roberto Umali.
At the sidelines of LSC’s 38th anniversary last week, Umali said, “You cannot plan any expansion at these percentages,” noting that local shipping companies would be hard pressed to deliver volume growth of 7-8% in the next three years.
“If economic conditions permit, the only expansion from LSC would be new routes such as secondary routes to increase cargo volume,” Umali said.
There will be no additional bottoms because the industry capacity is just about enough, he explained.
The MV Lorcon Dumaguete, the company’s newest flagship named also at last week’s LSC anniversary celebrations, is only a replacement of the MV Lorcon Luzon which was sold recently.
The 797-TEU Lorcon Dumaguete has a capacity of 130 reefer plugs and a speed of 17 knots. She will ply the Manila-Davao-Cebu-Manila route. The 11-year-old vessel was acquired for $6 million from a shipowner in Turkey.
Umali said fleet improvement will likely begin again next year until 2014 when at least two older vessels will be replaced with 400-TEU ships. LSC expects to spend $6 million on each vessel, including refurbishment.
For now LSC, which accounts for 15% of the domestic cargo market, would rather focus on increasing its load factor – currently at 70%, Umali said.
Rates will also be maintained even with the prevailing container imbalance where southbound volumes are better than northbound.
The company is closely monitoring its second-half performance to avert a repeat of what happened in 2009 when revenues nose dived due to less capacity and higher maintenance costs.
Aside from Lorcon Dumaguete, LSC operates the MV Lorcon Cagayan de Oro, Lorcon Davao, Lorcon Visayas, Lorcon Cebu, Lorcon Manila, and Lorcon Zamboanga. They are deployed in the Cebu, Davao, General Santos, Cotabato, Iloilo, Cagayan de Oro, Zamboanga, Dumaguete, and Bacolod routes.
