Orient Overseas signs 40-year Long Beach lease
Orient Overseas Container Line has signed a deal with the Port of Long Beach to lease the Californian port's Middle Harbour container terminal for 40 years in what is the biggest port agreement in United States history.
The Tung family-controlled shipping firm will pay a total of US$4.6 billion to rent the 121.6 hectare box terminal until 2052. The pact was signed about two and a half months after the port's harbour commissioners gave preliminary approval for OOCL to lease the Middle Harbour facility after 12 months of talks.
Stanley Shen, OOCL's investor relations expert, said Middle Harbour was 'an exclusive terminal for us and Grand Alliance partners'. These comprise German container line Hapag-Lloyd and Japan's Nippon Yusen Kaisha. He said it was likely the three container line partners would deploy ultra-large containerships of more than 10,000 teu (20-foot equivalent unit) on transpacific services to serve the new terminal.
'We are planning for the future,' he said yesterday.
The 12,562 teu containership, MSC Fabiola, operated by rival container line Mediterranean Shipping, became the largest ship to call at a North American port when she docked at Long Beach on March 16.
Ultra-large containerships offer economies of scale, reduced fuel consumption and improved environmental performance compared with smaller vessels, but many North American ports, except Long Beach, have restrictions on the size of ship they can handle.
A ceremonial ground breaking will be held at Long Beach next month, although construction work on the project, which is being funded by the port, is already well under way. The terminal will be capable of handling 3 million teu a year, equivalent to about half of the 6.1 million teu Long Beach handled last year.
The port is spending US$1.2 billion to merge two existing container terminals, one of which is operated by OOCL subsidiary Long Beach Container Terminal, into the single Middle Harbour terminal. Construction, which will be completed in 2020, involves the formation of 1.4 kilometres of new wharves, rail facilities and 37 container-storage areas.
OOCL will invest US$500 million to equip the facility with more environmentally-friendly equipment including electric powered cranes to replace diesel cranes. The facility will have shoreside power to enable ships to plug in to the local network and switch off their engines while berthed.
Christopher Lytle, Port of Long Beach executive director, said: 'I can't overstate the significance of this agreement. It is the largest and most far-reaching terminal lease ever at the Port of Long Beach.'
12,500
The number of containers that can be carried by MSC Fabiola, one of a new generation of ultra-large ships capable of docking at Long Beach
