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Who owns the container terminals at the Port of Long Beach?

Peter Stewart, PortandTerminal.com, January 20, 2019

Long Beach, California – China’s influence at the Port of Long Beach has increased dramatically since its state-owned shipping line COSCO’s acquisition of rival shipping line OOCL. To get the deal approved COSCO has promised to sell off part of their container terminal stake at the port to quell the fears of regulators.

Background

In July 2017, the Chinese state-run COSCO offered to buy Hong Kong’s Orient Overseas International Ltd (OOIL), the parent company of OOCL container line, for USD $6.3 bln.

With the acquisition of OOCL, COSCO Shipping increased its fleet to 2.8 mln TEU and moved up to the third place in the global container shipping rankings knocking rival CMA CGM to 4th place. It also acquired OOCL’s stake in container terminals at the Port of Long Beach.

Who owns the container terminals at the Port of Long Beach?

Here’s the map of who owns what. Chinese ownership is highlighted in red.

COSCO’s Container Terminals in Long Beach

Prior to taking over OOCL, COSCO held 51% of shares in Pacific Maritime Services LLC, which operates Pacific Container Terminal on Pier J at the Port of Long Beach (the remaining stake of 49% belongs to SSA Marine). Circle #1 in the diagram below shows this ownership stake.

The purchase of OOCL gave COSCO ownership stakes in two additional terminals at the Port of Long Beach; Terminals E & F. Circle #2 in the diagram below shows their new ownership stake.

To note, COSCO also owns 100% of West Basin Container Terminal at the Port of Los Angeles, which it acquired through the merger with China Shipping in January 2016.

Long Beach Container Terminal (LBCT)

LBCT is one of the world’s most automated shipping facilities and among the busiest terminals in the San Pedro Bay Port complex, which houses the Port of Los Angeles and the Port of Long Beach in southern California. In 2012, Hong Kong-based OOCL agreed to lease the terminal at the Port of Long Beach for USD 4.6bn over a 40-year period, marking one of the biggest US port deals ever. 

Photo of containers being loaded onto automated trucks at Long Beach Container Terminal.
Long Beach Container Terminal

COSCO signed a National Security Agreement with US regulators committing to the disposal of the Long Beach Container Terminal (LBCT) to an unrelated third party, the company announced in July, 2018.

Next steps

COSCO committed to the auction of its lease on Long Beach Container Terminal this past summer as a result of a deal struck with US regulators to allow it to proceed with its USD 6.3bn acquisition of Orient Overseas International (OOCL).

In December 2018 Bloomberg reported that COSCO Shipping Holdings’ sale of the Long Beach Container Terminal (LBCT) has reportedly sparked interest from the U.S. private equity firm Blackstone Group LP and compatriot private investment company KKR & Co.

According to Bloomberg, the bids for the terminal, valued at USD 1 billion, also include proposals from EQT Partners and an arm of Macquarie Group.

Learn more

Alphaliner Top 100 shipping lines (January 20, 2019) https://alphaliner.axsmarine.com/PublicTop100/

Port Today – “COSCO offers to give Long Beach Container Terminal to a US operator, aims to close the OOCL takeover in June” https://port.today/cosco-shipping-give-long-beach-terminal/

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