Tuesday, January 4, 2011

Cal United Officially Shutters Long Beach Terminal

California United Terminals, one of the keystone tenants at the Port of Long Beach, California for 30 years, officially shuttered its 130-acre Pier E facility over New Year's weekend.

CUT, a subsidiary of Hyundai Merchant Marine, is now operating out of 98 acres of land subleased from APM Terminals in the Port of Los Angeles. CUT began operations at the new facility in Los Angeles on December 5, 2010, just two weeks prior to the final vessel call at the Long Beach facility. The CUT terminal in Long Beach, which opened in 1979, was servicing calls mainly from Hyundai as well as carriers APL and MOL.

In August, 2010 CUT announced its intention to relocate to the Port of Los Angeles by the end of 2010. CUT officials said at the time that the Long Beach facility was no longer a good fit based on construction schedules, land configuration and berthing space limitations.

Port of Long Beach officials estimate that the departure of CUT will cost the port about 385,000 twenty-foot-equivalent units, or TEUs, a year – roughly 7.6 percent of the port's total TEUs handled in 2009. According to port officials, negotiations are under way with at least one current tenant at Long Beach to possibly backfill into at least some of the vacated CUT location.

"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," said Port of Long Beach Deputy Executive Director Chris Lytle last year.

Lytle said demand for terminal space in Long Beach remains high and that new cargo coming to Long Beach will quickly 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 TEUs a year," said Lytle in August. "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."

Lytle also said at the time that the departure of CUT would not impact the Long Beach port's ongoing Middle Harbor Redevelopment Project, which is centered on the shuttered CUT location.

In August 2010, the Port of Los Angeles governing commission approved an amendment to their lease with APM Terminals Pacific that provides for a CUT sublease of APM property located on the Los Angeles port's Pier 400. The nearly 500-acre APM facility on Pier 400 is home to shipping giant Maersk.

Ironically, Maersk was also a defector from Long Beach, moving to the then-recently completed Pier 400 in the early 2000s and taking with it nearly a quarter of Long Beach's annual container traffic. Surprising most in the industry at the time, Long Beach port officials were able to make up the loss in about 18 months with new tenants and expanded operations by existing tenants.