TIL Inks Deal to Replace Hanjin at POLB

By Mark Edward Nero

New cargo business could be coming to the Port of Long Beach’s largest terminal soon after the port’s harbor board approved an agreement to replace a vessel operator that declared bankruptcy four months ago.

On Dec. 22, the Long Beach Board of Harbor Commissioners okayed the move by a subsidiary of vessel operator Mediterranean Shipping Co. to take over sole control of the long-term lease of the port’s 381-acre Pier T container terminal.

MSC previously held a minority stake in the lease for Pier T, which is the terminal where over a quarter of the port’s container cargo is moved.

The port says the new agreement with MSC subsidiary Terminal Investment Ltd. (TIL) also guarantees the accelerated installation of ship-to-shore cranes capable of handling the world’s biggest container ships.

TIL takes control of Pier T from Hanjin Shipping, the South Korean ocean carrier that declared bankruptcy on Aug. 31. In 2015, Hanjin accounted for about 12 percent of the containers that moved through Long Beach. The deal comes at a crucial time, Harbor Commission President Lori Ann Guzmán said.

“With all of the changes that have taken place in the shipping industry in recent years, certainty is very important,” she remarked. “Although we regret the loss of a long-term partner in Hanjin Shipping, we look forward to the opportunities that Terminal Investment Limited, Mediterranean Shipping Company, Hyundai Merchant Marine and their ‘2M Alliance’ partners will bring to Long Beach.”

Earlier this month, Terminal Investment Limited announced that it had signed an agreement to purchase Hanjin Shipping’s stake in the terminal operator at Pier T.

The new pact also requires installation of two new cranes capable of handling container ships with capacities of 20,000 twenty-foot equivalent units within three years.

MSC Buys Stake in POLB Terminal

Mediterranean Shipping Co. has decided to buy a stake in the leasehold for the marine terminal operations at Pier T, the Port of Long Beach’s largest container terminal, port Executive Director Chris Lytle announced during his annual “State of the Port” address Jan. 31.

“I am proud to announce that the Mediterranean Shipping Company, the second-largest shipping line in the world, has increased its investment in the Port of Long Beach by partnering with Total Terminal International at Pier T. This essentially doubles their stake here at Long Beach,” he said. “MSC already has an interest in Pier A, but this decision makes Long Beach the carrier’s West Coast hub, ensuring it will move more cargo through our port.”

Port of Long Beach is MSC’s biggest West Coast hub of operations, and Pier T is the port’s largest container terminal. The decision by Mediterranean to increase its investments at the terminal is the second such move by a leading shipping company in recent months.

The port announced in December that CMA CGM, the world’s third-largest ocean carrier, had purchased a stake in Pier J in Long Beach.

“For those of you who have been keeping tally, yes, that’s right: two of the world’s top three ocean carriers are now here in Long Beach,” Lytle said during his speech, which took place in front of hundreds at the Long Beach Convention Center’s Grand Ballroom, which seats up to 2,100.

The Swiss-based MSC and CMA CGM, of France, have been coming to the Port for years, but their direct investments mean Long Beach will be their exclusive gateway in Southern California, bringing more trade. MSC and CMA CGM operate some of the biggest containerized cargo ships in the trans-Pacific trade. The MSC Beatrice, for example, is among the latest generation of larger, greener ships. The MSC Beatrice can carry 13,798 container units – more than 70 percent more than the typical “megaship” of a few years ago.

Also during his address, Lytle touched on various other topics, including the port’s ongoing 10-year, $4.5 billion rebuilding and modernization program, which focuses on bringing cleaner and more efficient facilities to the port. Components include major waterfront improvements at Middle Harbor and Pier G and a $1 billion project to replace the aging Gerald Desmond Bridge.

“Ports in Canada, Mexico and right here in the US – on both coasts – all want a greater share of our business. To stay competitive and keep jobs here, we must continue to improve our facilities,” he said. “We are committed to ensuring that the hundreds of thousands of trade-related jobs that depend on our success stay right here in Southern California.”

Port of Long Beach Releases Grain Export Study

The Port of Long Beach on Dec. 9 released a draft environmental impact report on a proposal to build a grain export facility at Terminal Island’s Pier T.

The proposed Total Terminals International facility would transfer grain from railcars into ocean shipping containers and export from 750,000 to 1.5 million tons of grain per year utilizing existing rail and container shipping facilities.

The proposal includes installation of a grain transloading facility on a vacant 10-acre parcel on Pier T adjacent to the existing 385-acre TTI container terminal. The proposed project would be located on the former Navy Mole, a 2-mile-long, 500-foot-wide peninsula that wraps around Long Beach Harbor’s west basin.

Existing rail lines follow the southern edge of the site and connect to other rail lines including the BNSF and the Union Pacific networks.

TTI says the project would enable the transfer of a high quality feed for cattle utilizing the existing rail and shipping infrastructure. Under the proposal, the same frequency of shipping vessels would occur, but the containers would instead transport grain to China.

Shipping vessels currently transport empty containers from Pier T.

Construction of the facility would last about 14 months, from June 2012 through July 2013.

The port hosts a public hearing to solicit comments on the document at 7 p.m. Jan. 11 at Long Beach City Hall Council Chambers, and written comments are being accepted by the port through Jan. 23. The draft document is available at polb.com/ceqa.