OOCL waits for green light on US gateway deal
Orient Overseas Container Line is set to enter the Year of the Dragon with an agreement for a new United States Pacific gateway at Long Beach that will be the biggest rental deal in US port history.
The Tung family-controlled shipping company should hear early next week whether the Port of Long Beach in California will sign a US$4.6 billion, 40-year lease for the Middle Harbour container terminal. The two sides reached a tentative agreement on Thursday but the deal, which has been recommended for approval, needs to be ratified by the port's harbour commissioners on Monday.
Confirmation of the proposed pact came as OOCL saw a 1.5 per cent drop in total revenues to US$5.53 billion last year, parent company Orient Overseas (International) said yesterday. This was despite a 5.6 per cent increase in container volumes to 5 million teu (20-foot equivalent units), up from 4.77 million teu in 2010.
Karl Adamowicz, the port's director of real estate, said the facility 'will be the most competitive, technologically advanced and greenest terminal in the US' with shore-side power to supply electricity to ships, enabling onboard diesel auxiliary engines to be switched off.
Philip Chow Yiu-wah, OOCL CEO, said the agreement 'demonstrates our long-term commitment to the port of Long Beach as the gateway of choice for North America'.
The port will spend US$1.2 billion to create the 121.6 hectare Middle Harbour complex, which will combine two existing terminals - including the 36.3 hectare Pier F operated by OOCL subsidiary Long Beach Container Terminal - into a single terminal. The project, which will double existing capacity, includes the construction of 1.41 kilometres of new wharves, rail facilities and 37 container-storage areas. OOCL will spend a further US$500 million on new cargo-handling equipment.