“Let us make [the] Philippine shipping competitive in an Asean context. It can be a threat to some, but there are also lots of opportunities. With economics of scale wherein you have efficient companies that have a bigger scale within Asean, they can also bring down the cost of shipping,” Royal Cargo Group CEO Michael Kurt Raeuber said in a recent interview on the sidelines of the arrival of the company’s first-ever container vessel at the Batangas Port.
Raueber, who has been engaged in the local-shipping industry for more than two decades, said opportunities abound as the Philippine economy continues to grow.
Having a consumption-driven economy, he noted the country needs additional capacity in shipping, as remittances of overseas Filipino workers and revenues from the business-process outsourcing industry continue to drive consumption.
To boost the local-shipping sector, Raueber pointed out the need for more investments.
“The current and the previous administrations have been looking at the high cost of shipping in the domestic market. They want to see more investments in domestic shipping and develop more competition,” he explained.
“We saw an opportunity many years ago. Sixty ships have entered the domestic market last year. With our two additional vessels, we’re making a contribution,” Raeuber added.
The Royal Cargo CEO said opening the country’s shipyards to Asean vessels would be a boon in preparation for the regional economic union.
For example, he claimed Mindanao could be good connection between Sulawesi and East Indonesia.
He said there is also need to tackle the high cost of fuel in the country, which contributes to the high cost of shipping.
Although the Philippines needs to keep pace with its Asean counterparts, Raeuber said the country has done a lot of catching up already. “Let us be proud to a certain degree. We just have to continue on the same path. We now have brand-new Roro [roll-on, roll-off] ships.”
“Aboitiz has also brought in bigger, more efficient vessels,” he observed.
As far as their initial foray into the domestic-shipping industry is concerned, Raeuber said Royal Cargo is bullish on the prospects with the recent arrival of its first-ever container vessel expected to arrive at Batangas Port.
“We are confident of a high utilization of the vessel. Most of the container ships are coming through feeder ships, unlike ours, which came directly from Rotterdam,” Raeuber said.
The vessel has the capacity to run at a maximum speed of 20 knots, with a deadweight tonnage of 13.751 and maximum container capacity of 1,118 twenty-foot equivalent units.
The company also expects to invest in an additional vessel to further expand its coverage before year-end.
Royal Cargo’s ship will be ready to engage in trade once the company gets the Maritime Industry Authority nod. It plans to serve either the Manila-Mindanao or Batangas-Mindanao routes.
Raeuber said the firm is also interested to serve the Zamboanga Port, as “[it] needs bigger vessels”, he declared.
“We create markets with the development of infrastructure,” the CEO emphasized.
The first ship, he announced, is expected to start operations in July this year. The company will add another cargo vessel to serve the market. Delivery is expected within 2017.
Aside from the vessel acquisition, Royal Cargo recently commenced the construction of its 6-hectare solar-powered Cargo City North Hub in Plaridel, Bulacan, as part of its logistics capacity expansion in the country.
Based in the Philippines, Royal Cargo currently has 12 global offices in the UK, Germany, the US, Singapore, Hong Kong, Vietnam, Cambodia, China, Guam, Palau, Taiwan, Thailand and soon in Malaysia and Indonesia.
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