Mediterranean Shipping Company to Take Over Long Beach’s Largest Terminal
After several twists and turns, a subsidiary of Mediterranean Shipping Company has been approved to take over sole control of the long-term lease of the Port of Long Beach’s Pier T container terminal.
Previously, MSC held a minority stake in the lease for the 381-acre Pier T, while a 54-percent majority was held by Hanjin Shipping. Hanjin applied for receivership in a South Korean court August 31 and is now in the process of liquidating its assets.
More than a quarter of the Port of Long Beach’s container cargo is moved through Pier T.
The MSC takeover was finalized as the Long Beach Board of Harbor Commissioners greenlighted the move December 22. Earlier, MSC and Hyuandai Merchant Marine had submitted a joint bid to take over the terminal lease but HMM later withdrew. At one point Korea Line, South Korea’s second-largest bulk carrier, was also thought to be in the running to take over Hanjin’s stake in the terminal, but that effort went nowhere.
Port officials hope the move will improve months of poor performance at Long Beach, which has suffered in the wake of Hanjin’s collapse. Long Beach’s troubles proved a gain for the neighboring Port of Los Angeles, where container traffic has been spiking as Hanjin’s competitors picked up volume. In 2015, Hanjin accounted for about 12 percent of the containers that moved through Long Beach.
The Harbor Commission’s agreement with MSC subsidiary Terminal Investment Limited (TIL) guarantees the accelerated installation of ship-to-shore cranes capable of handling the world’s biggest container ships.
Board of Harbor Commissioners President Lori Ann Guzmán said that while Hanjin’s bankruptcy was unfortunate, the approved agreement is a worthy deal to bring steady business to one of the country’s premier container terminals.
“This decision comes at a crucial time,” she said. “With all of the changes that have taken place in the shipping industry in recent years, certainty is very important.”
Terminal Investment Limited earlier this week announced it had signed an agreement to purchase Hanjin Shipping’s stake in the terminal operator at Pier T. The South Korean bankruptcy court sought approval from U.S. authorities, including the Port of Long Beach.
Total Terminals International (TTI), the terminal operating company for Hanjin Shipping, signed a 25-year lease to operate Pier T in Long Beach in August 2002. In 2012, MSC bought a minority share of the Total Terminals lease at Pier T. The new pact would also require installation of two new cranes capable of handling container ships with capacities of 20,000 twenty-foot equivalent units (TEUs), within three years.