Friday, August 6, 2010

CUT to Move From Long Beach to Los Angeles

As first reported in PMM Online yesterday, California United Terminals will be moving from their home of more than 30 years at the Port of Long Beach to the neighboring Port of Los Angeles sometime around the end of the year.

On Thursday, the Port of Los Angeles governing commission approved an amendment to their lease with APM Terminals Pacific that provides for a CUT sublease of up to 200 acres on the APM property located on the Los Angeles port's Pier 400. According to port documents, the new Los Angeles facility for CUT, though physically on Pier 400, will be known as Pier 500.

The future Los Angeles CUT facility will be located on portions of the nearly 500-acre APM facility on Pier 400 which is home to Maersk. Ironically, Maersk was also a defector from Long Beach, moving to the then-recently completed Pier 400 in the early 2000s.

The current 130-acre CUT terminal in Long Beach is the epicenter of the Long Beach port's ongoing Middle Harbor Redevelopment Project and according to port officials, the CUT operators felt that the facility was no longer a good fit based on construction schedules, land configuration and berthing space limitations.

The CUT terminal in Long Beach, which opened in 1979, currently services calls mainly from Hyundai Merchant Marine as well as APL and MOL. The terminal handled just under 390,000 TEUs last year.

The move came as no surprise to Long Beach officials, who report that they have already been talking with potential replacement customers for the departing CUT.

"The departure of Hyundai Merchant Marine will not impact construction of the Middle Harbor Project," said Port of Long Beach Deputy Executive Director Chris Lytle.

"The Middle Harbor Redevelopment Project was designed to modernize and upgrade aging port infrastructure, regardless of the shipping company leasing the facilities. In fact, the timing of this departure allows us to entertain a variety of leasing opportunities that may ultimately result in a more effective use of this property and shorter construction times."

Lytle said demand for terminal space in Long Beach remains high and that new cargo coming to Long Beach will offset the loss of Hyundai’s trade volume.

"New vessels have or will shortly begin calling at the Port of Long Beach, with an additional 1 million or more TEU’s a year," said Lytle. "At SSA’s Pier A facility alone, the recent addition of two services will result in an additional 550,000 TEUs. Matson’s new China service will add about 234,000 TEU a year."