BIMP-EAGA aims to improve sea connectivity among member countries to spur trade and investment. Photo courtesy of Reefer Express Line Filipinas, Inc.
Reefer Express Line Filipinas, Inc. plans to revive the Davao–General Santos–Bitung route linking BIMP-EAGA ports in August or September and include stops in the Middle East to transport Philippine bananas to make the route profitable.
The revised route will start from Davao, proceed to Bitung, the Middle East, Sabah, then back to Davao, said Felix Ishizuka, Reefer chief executive officer. The trip will take 12 to 14 days, and the service will have a monthly frequency.
The company started its trial run on the route in 2019. It was supposed to launch the service in 2020, but put it off to this year.
Backbone cargo
Ishizuka said Philippine Cavendish bananas will serve as the “backbone cargo” of the service with target markets, Iran and Saudi Arabia, added to the route. He said this ensures that the service will be profitable, and that every time Reefer’s ship sets sail, it will have a full cargo.
“Making bananas the backbone of the service is good for the Philippine economy and also for the farmers,” he said.
For the past 6 months, he has been in talks with banana growers to ensure Reefer would have a steady supply for the service. Ishizuka said Reefer 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 that will be used for the route, is ideal to transport farm goods as it has refrigerator units on board, which will prolong the life of perishable goods, like bananas or other fruits. The ship also has capability to carry dry goods and heavy equipment. The vessel can carry up to 250 TEU (twenty-foot equivalent unit) containers.
He said Reefer is also looking at Kuwait as an alternative stop in case Iran faces more stringent trade sanctions.
Sea connectivity through RORO
BIMP-EAGA 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 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 was also seen to reduce logistics costs, boost employment and incomes, and revive and strengthen ties between Indonesia and the Philippines. The study cautioned authorities to protect local industries and small producers from competing imported products.
A slow start
A roll-on, roll-off (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 it was halted after only two voyages because of low load factors and volumes. The low cargo volume was partly blamed on the similarity of goods produced by BIMP-EAGA countries.
When Reefer stepped in to service the route in 2019, it faced a similar problem, again casting doubts on the sustainability of the service. The route included Davao, Bitung, Ho Chi Minh City in Viet Nam, Muara in Brunei Darussalam, and Lahad Datu in Sabah. Brunei and Viet Nam were included in hopes of widening the range of goods its vessel could carry along the route as well as the market for the goods.
The company was supposed to bring in rice from Viet Nam to the Philippines. But because of the Philippine restrictions on rice imports, Reefer is yet to decide whether to include Ho Chi Minh City to the service.
Despite the challenges of reviving the BIMP-EAGA route, Izhizuka remains bullish about the service, noting the company was set up specifically to provide connectivity in the subregion. “It will happen. It’s just a matter of time.”
Apart from shipping, Reefer also offers trading, chartering, bunkering, crewing, warehousing, freight forwarding, and custom's brokerage services.