Report: Suitors Launch Their Bidding for Long Beach Container Terminal
- Business & Finance
COSCO Shipping Holdings’ sale of the Long Beach Container Terminal (LBCT) has reportedly sparked interest from U.S. private equity firm Blackstone Group LP and compatriot private investment company KKR & Co., Bloomberg reported.
The terminal divestment is being pursued by COSCO as part of its USD 6.3 billion takeover of Orient Overseas International Limited (OOIL), a concession required by the U.S. regulators in order to clear the merger.
OOIL’s shipping arm OOCL holds a 40-year concession to operate the facility at the Port of Long Beach, which is one of the biggest gateways for imports into the US.
According to Bloomberg, the bids for the terminal, valued at USD 1 billion, were solicited last week, and they also include proposals from EQT Partners and an arm of Macquarie Group.
“The sale of the Long Beach Container Terminal is indeed still a work in progress and we have no further updates to provide. All interested parties and their offers will be reviewed accordingly,” OOCL spokesman Stephen Ng told World Maritime News.
COSCO and Shanghai International Port (Group) concluded the acquisition of OOIL’s shares on July 13, 2018. The merger will provide for a combined fleet of 400 vessels, with capacity exceeding 2.9 million TEUs including orderbook, Drewry’s data shows.
The transaction is in line with the prominent consolidation trend in the container shipping industry which has seen numerous heavyweights forge ties in order to combat industry headwinds.
The liner industry has been facing severe market conditions since 2016 which are being further aggravated by the recent bunker price spikes and slow recovery of freight rates.
Both LBCT is yet to provide WMN with a comment on the matter.
Port of Long Beach Thriving on the back of U.S.-China Trade War
According to the November figures from the Port of Long Beach, cargo volumes continue to rise setting the stage for a second consecutive calendar year record, mainly due to the ongoing trade war between the U.S. and China.
The port handled 621,835 TEUs of container cargo during the month, a 1.5 percent increase compared to November 2017. Last month’s performance pushed 2018’s total TEU count to 7,349,377, enabling the port to most likely eclipse its record of 7,544,507 TEUs set last year.
Imports continuing to outpace goods shipped overseas coupled with the large number of unloaded containers illustrate how the higher tariffs imposed this year by the United States and China have impacted the flow of commerce, according to Port of Long Beach Executive Director Mario Cordero.
“American retailers are stocking up on goods made in China to avoid anticipated higher tariffs,” said Cordero. “You’re seeing the opposite effect on the other side of the ocean. Chinese businesses seem to be already looking to other countries for goods and raw materials, meaning there’s less demand for American exports and more empty containers are being shipped.”
World Maritime News Staff