Long Beach usage agreement helps COSCO
A 20-year usage agreement made as part of Orient Overseas (International) Limited's (OOIL) US$1.78bn sale of Long Beach Container Terminal to Macquarie Group subsidiary Olivia Holdings will ensure a continued benefit for OOIL's subsidary Orient Overseas Container Line (OOCL) and its owner Cosco Shipping Holdings.
The usage agreement means that COSCO remains the major customer of the terminal, despite the sale of the terminal and the US government's requirement for COSCO to sell its rights to the terminal before it could buy investment company OOIL last year, stated Neil Davidson, senior analyst ports and terminals at Drewry. He added that the deal also benefits the Ocean Alliance, of which OOCL and COSCO are members.
He said: “As part of the sale deal there is a 20-year usage agreement signed with OOCL. So the terminal will continue to be used by OOCL, in effect Cosco, and by association the Ocean Alliance."
He said the impact the sale will have on the ports and terminals industry "depends on the nature of this agreement, such as what minimum volumes OOCL is guaranteeing and hence the extent to which the terminal will also wish to pursue business from other customers".
The Ocean Alliance enable slot-sharing and vessel-sharing agreements among the world’s major carriers. In January, members of the OCEAN Alliance, CMA CGM, COSCO Shipping Lines, OOCL and Evergreen, signed an agreement to confirm the extension of the duration of OCEAN Alliance to ten years, until 31 March 2027.
"All of the Ocean Alliance members have other terminal interests in LA/LB - either majority ownership, or minority stakes and long term usage agreements," said Mr Davidson. "Evergreen has a terminal, CMA CGM has minority stakes in two terminals, as does Cosco. This creates an interesting dynamic within the alliance."
Bidders for the terminal concession also included Yildirim Holding Inc., Sweden-based multinational private-equity group EQT Infrastructure and US fund Stonepeak Infrastructure Partners.
By Rebecca Jeffrey
LATEST PRESS RELEASES
The innovative online route planner contains deep-sea and short-sea schedules connecting to 550 port... Read more
Solvo.TOS has been chosen by Sogester S.A. (APMT and GF Sociedade Gestore de Terminais, SA) to moder... Read more
Sany well understood the customers’ need to improve cost. In 2018 SANY introduced the new Reach Stac... Read more
Bromma has been selected to deliver the spreaders for the automatic stacking cranes to be commission... Read more
Kalmar's automated and manual straddle carriers selected by Patrick Terminals for fleet renewal programme
Kalmar's automated and manual straddle carriers selected by Patrick Terminals for fleet renewal prog... Read more