Home » Maritime » Monopoly in cargo sector unlikely with ATS-Nenaco deal

THE acquisition of Aboitiz Transport System (ATS) by Negros Navigation Co (Nenaco) may potentially lead to a monopoly in the passage market but not in the freight sector, shipping sources said.

The bulk of cargo volumes will still be controlled by other shipping lines, a source from the Philippine Liner Shipping Association (PLSA) pointed out, but the passage sector could potentially be cornered by ATS-Nenaco. Even prior to the sale agreement, ATS and Nenaco already controlled that market, with a 40% and 20% share, respectively.

Apart from Nenaco, PLSA counts as members Philippine Span Asia Carrier Corp (formerly Sulpicio Lines), NMC Container Lines, Lorenzo Shipping Corp, Oceanic Shipping Lines and Solid Shipping Corp. Minus Nenaco, the lines control up to 80% of the local cargo volume; Nenaco controls 10% and ATS another 10%.

The only other potential rival for the passage sector is Philippine Span Asia Carrier, but the line is still currently banned from carrying passengers by the Maritime Industry Authority (Marina) following a string of maritime disasters.

“There will still be a level playing field as far as the cargo industry is concerned,” a source from the Philippine Liner Shipping Association (PLSA) said.

“Even in the passage industry, there will be enough competition brought about by the ro-ro (roll on-roll off) industry but in the long-haul, maybe we can say the two firms can control the market.”

Boost to cabotage law

The source added, “The other positive thing going for the cargo industry is the transfer of ownership of MCC Transport from ATS to Nenaco.” MCC Transport, a joint venture between ATS and Maersk Line, was part of the Nenaco purchase agreement.

The source noted Nenaco promised MCC Transport will comply with the country’s cabotage law and will operate only Philippine-registered vessels intended for the local trade.

There have been complaints in the past that MCC skirted the cabotage law by securing a special permit from Marina to field its foreign-registered vessels for the local trade. The permit was given to address the lack of bottoms in the domestic sector.

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