Reefer Express to restore BIMP-EAGA service with Middle East calls

MV Baltic Summer. Photo courtesy of Reefer Express Line Filipinas, Inc.
  • Davao-based Reefer Express Line Filipinas eyes revival in August or September of the Davao-General Santos-Bitung route to transport Philippine bananas, with stops in the Middle East
  • The revised monthly service will start from Davao, proceed to Bitung, the Middle East, and Sabah, before heading back to Davao on a 12- to 14-day trip
  • Philippine Cavendish bananas will be the service’s “backbone cargo” with target markets Iran and Saudi Arabia added to the route

Davao-based Reefer Express Line Filipinas, Inc. plans to revive in August or September the Davao-General Santos-Bitung route linking Brunei, Indonesia, Malaysia, and the Philippines-East ASEAN Growth Area (BIMP-EAGA) ports to transport Philippine bananas, with stops in the Middle East to make the route profitable.

The revised route will start from Davao, then proceed to Bitung, the Middle East, and Sabah, before heading back to Davao, according to Reefer Express chief executive officer Felix Ishizuka. The trip will take 12 to 14 days with a monthly frequency.

After starting a trial run on the route in 2019, the company put off to this year the planned launch of the service in 2020.

Ishizuka said Philippine Cavendish bananas will be the “backbone cargo” of the service with target markets Iran and Saudi Arabia added to the route. He said this will ensure the service is profitable and that the Reefer Express ship sets sail with a full cargo each time.

“Making bananas the backbone of the service is good for the Philippine economy and also for the farmers,” he said in a statement.

For the past six months, Ishizuka has been in talks with banana growers to ensure a steady supply for the service. Ishizuka said Reefer Express could also transport pineapples and other agricultural products to the Middle East.

For the return trip, the company plans to transport nuts and fruits from Iran, such as pistachio, passionfruit, kiwi, and apples.

Ishizuka said MV Baltic Summer, the ship to be deployed for the route, is ideal for transporting farm goods as it has refrigerator units on board, which will prolong the life of perishable goods, like bananas or other fruits.

The vessel, which can carry dry goods and heavy equipment, has a capacity of 250 twenty-foot equivalent units.

Ishizuka said the Reefer Express is looking at Kuwait as an alternative stop in case Iran faces more stringent trade sanctions.

BIMP-EAGA is an Association of Southeast Asian Nations (ASEAN) sub-region that aims to improve sea connectivity among member countries to spur trade and investment.

A 2013 master plan drawn up by the Japan International Cooperation Agency (JICA) on an ASEAN Roll-on/Roll-off (RoRo) Network identified the Davao-General Santos-Bitung route among three priority routes.

The network also includes the Dumai (Indonesia)-Malacca (Malaysia) and the Belawan (Indonesia)-Penang (Malaysia)-Phuket (Thailand) shipping routes.

According to the JICA study, the Davao-General Santos-Bitung route has the potential to bolster cargo and passenger traffic across the route and boost local economies.

The service is seen to reduce logistics costs, boost employment and incomes, and revive and strengthen ties between Indonesia and the Philippines. The study cautions authorities to protect local industries and small producers from competing imported products.

A RoRo shipping service between Davao City and General Santos City in Mindanao and Bitung City in Sulawesi was launched in 2017 by another shipping company, but halted after only two voyages due to low loads and volumes. The low cargo volume was partly blamed on the similarity of goods traded by BIMP-EAGA countries.

READ: PH-Indonesia trade seen expanding with new RoRo service

When Reefer Express stepped in to service the route in 2019, it faced a similar problem, again casting doubts on sustainability of the service. The route included Davao, Bitung, Ho Chi Minh City in Vietnam, Muara in Brunei Darussalam, and Lahad Datu in Sabah. Brunei and Vietnam were included in hopes of widening the range of goods its vessel could carry along the route as well as the market for goods.

The company was supposed to bring in rice from Vietnam to the Philippines but because of Philippine restrictions on rice imports, Reefer Express has yet to decide whether to include Ho Chi Minh City in the service.

Despite challenges of reviving the BIMP-EAGA route, Ishizuka remains bullish about the service, noting the company was set up specifically to provide connectivity in the sub-region. “It will happen. It’s just a matter of time,” he said.