China Shipping Lines to expand its container service through Seattle
The Port of Seattle announced Monday that China Shipping Lines will expand its container service through Seattle, a deal that port Chief Executive Tay Yoshitani called a "major coup for us."
China Shipping will move from Terminal 18, where it has called since 1999, to Terminal 30, where its division China Shipping Terminals will be an equity partner with terminal operator SSA Terminals -- a joint venture between Seattle-based SSA Marine and Matson Navigation Co.
"China Shipping is taking a major equity stake at Terminal 30, which demonstrates their commitment," Yoshitani said.
Shanghai-based China Shipping, through its wholly owned U.S. divisions, brings 97,000 TEUs per year through the Seattle seaport's Terminal 18. TEUs are 20-foot-equivalent units, the standard measure of container volumes because of their varying lengths.
Yoshitani anticipates that China Shipping will double its current cargo volumes during its first year of operation at Terminal 30; by 2012, that volume could quadruple, he said, which would take the terminal near its capacity. Yoshitani said the port and its terminal operators had not yet determined who would buy the cranes to serve Terminal 30, nor how many would be bought.
But China Shipping Lines' departure from the SSA Terminals-operated Terminal 18, the seaport's largest, will leave a 97,000-TEU hole in its wake in May 2009. That's when SSA Marine Vice President Bob Watters said the carrier will move over to Terminal 30, which features two cruise-ship berths but will be revamped after the close of this year's cruise season to serve 8,000-TEU container ships.
Still, "there's no question that having a major steamship line at Terminal 30 is better than the alternative," said Paul Bingham, the principal of global trade and transportation for Global Insight, an economic and financial analysis company.
"There has been some turmoil about getting this done, who was going to be the tenant after (Mediterranean Shipping Co.) bowed out, but the long-term potential for growth is still there -- and freeing up some capacity at Terminal 18 is to the port's benefit."
In May 2006, the port and its largest terminal operator, SSA Marine, announced a triumph: Mediterranean Shipping Co. S.A.-- the world's second-largest container-ship operator -- would begin calling at Terminal 18 in 2007 with hopes of moving to Terminal 30 a year later. But in November 2006, the Seattle P-I reported that SSA's deal with MSC had gone sour, foiling the Seattle seaport's designs on being the host port for MSC's anticipated 221,000 annual TEUs.
SSA Marine, the world's largest privately held container-terminal operator and cargo-handling company, also runs terminals in Oakland and Long Beach, Calif., through a series of sometimes overlapping joint ventures.
"SSA Terminals will be the day-to-day operator of Terminal 30 and will report to the board -- it will be a board-run operation, and the board will consist of SSA Terminals and China Shipping Terminals," Watters said.
The port's investment of $55.9 million to expand Terminal 30 into a 70-acre container terminal using acreage from neighboring Terminals 25 and 28 was slated to bring in lease payments of $95.3 million from those terminals over 30 years. The cruise ships that now call at Terminal 30 will be moved to the port's Terminal 91 in Interbay. Yoshitani said that Terminal 30 will now be nearly 80 acres and that the port could get additional revenue from that increased acreage and, possibly, use of the cranes if the port owns them.
"Most importantly, we'll get a lot of additional man-hours," Yoshitani said.
Terminal 30 was once viewed as an opportunity to lure an entirely new carrier to the Seattle seaport, and it is unknown whether joining the crowd using Terminal 18 will be enough to entice ships that have not yet called here to do so. Yoshitani said he is "optimistic" about filling China Shipping's place at Terminal 18. Leadership of the International Longshore & Warehouse Union Local 19 could not be reached for comment.
By 2012, the group of steamship lines using Terminal 18 could be diminished with the departure of one of Seattle's oldest customers, the Tokyo-based Nippon Yusen Kaisha, or NYK Line, for which the Port of Tacoma is building a $300 million, 168-acre terminal on the industrial east side of Tacoma's Blair Waterway.
Still, "having a major line like China Shipping, which is gaining market share, is clearly an advantage for the port," Bingham said. "If the pricing is right ... the port could attract a smaller trans-Pacific liner, depending on their volumes."
Watters said that SSA is "having discussions with MSC, and also talking with other folks to come in at Terminal 18. We'll probably have an announcement later this year as to some new customers for Terminal 18."
Running cargo is a complicated business -- a partner in one port may be a customer to be wooed in the next, members of the same global shipping alliances poach one another's business, and seaports fall over themselves trying to court the organized mayhem to bring trade and the resulting jobs to their communities.
As one example, Long Beach SSA Terminals LLC, formed to run that port's 170-acre Pier A, includes Terminals Investment Limited, an affiliate of MSC, which has been doing the Texas Two-Step with SSA and the Port of Seattle over whether to bring containers through Elliott Bay.
Last April, the Port of Seattle decided to push back construction of the $62.4 million-and- rising Terminal 91 cruise facility by one year for a new opening date of April 2009, keeping the two berths at Terminal 30 open for Princess Cruises and Holland America Line through the current cruise season. Before the delay, the terminal was expected to open by year's end.
The port is planning to spend $62.4 million on cruise operations to gain $6.1 million in new cruise revenue; $31.5 million of the cruise lease revenue gained by the move would have been taken in at the five-year-old, $18 million Terminal 30 cruise building slated to be destroyed.
Vessel traffic through Puget Sound is expected to grow 5.6 percent as a result of the seaport project, which the port estimated will bring 75 more deep-draft vessels per year. Still, a softening economy has hit all the West Coast ports hard, and Yoshitani said he believes the Port of Seattle's container volumes would decline between 5 percent and 7 percent this year.
China Shipping will move from Terminal 18, where it has called since 1999, to Terminal 30, where its division China Shipping Terminals will be an equity partner with terminal operator SSA Terminals -- a joint venture between Seattle-based SSA Marine and Matson Navigation Co.
"China Shipping is taking a major equity stake at Terminal 30, which demonstrates their commitment," Yoshitani said.
Shanghai-based China Shipping, through its wholly owned U.S. divisions, brings 97,000 TEUs per year through the Seattle seaport's Terminal 18. TEUs are 20-foot-equivalent units, the standard measure of container volumes because of their varying lengths.
Yoshitani anticipates that China Shipping will double its current cargo volumes during its first year of operation at Terminal 30; by 2012, that volume could quadruple, he said, which would take the terminal near its capacity. Yoshitani said the port and its terminal operators had not yet determined who would buy the cranes to serve Terminal 30, nor how many would be bought.
But China Shipping Lines' departure from the SSA Terminals-operated Terminal 18, the seaport's largest, will leave a 97,000-TEU hole in its wake in May 2009. That's when SSA Marine Vice President Bob Watters said the carrier will move over to Terminal 30, which features two cruise-ship berths but will be revamped after the close of this year's cruise season to serve 8,000-TEU container ships.
Still, "there's no question that having a major steamship line at Terminal 30 is better than the alternative," said Paul Bingham, the principal of global trade and transportation for Global Insight, an economic and financial analysis company.
"There has been some turmoil about getting this done, who was going to be the tenant after (Mediterranean Shipping Co.) bowed out, but the long-term potential for growth is still there -- and freeing up some capacity at Terminal 18 is to the port's benefit."
In May 2006, the port and its largest terminal operator, SSA Marine, announced a triumph: Mediterranean Shipping Co. S.A.-- the world's second-largest container-ship operator -- would begin calling at Terminal 18 in 2007 with hopes of moving to Terminal 30 a year later. But in November 2006, the Seattle P-I reported that SSA's deal with MSC had gone sour, foiling the Seattle seaport's designs on being the host port for MSC's anticipated 221,000 annual TEUs.
SSA Marine, the world's largest privately held container-terminal operator and cargo-handling company, also runs terminals in Oakland and Long Beach, Calif., through a series of sometimes overlapping joint ventures.
"SSA Terminals will be the day-to-day operator of Terminal 30 and will report to the board -- it will be a board-run operation, and the board will consist of SSA Terminals and China Shipping Terminals," Watters said.
The port's investment of $55.9 million to expand Terminal 30 into a 70-acre container terminal using acreage from neighboring Terminals 25 and 28 was slated to bring in lease payments of $95.3 million from those terminals over 30 years. The cruise ships that now call at Terminal 30 will be moved to the port's Terminal 91 in Interbay. Yoshitani said that Terminal 30 will now be nearly 80 acres and that the port could get additional revenue from that increased acreage and, possibly, use of the cranes if the port owns them.
"Most importantly, we'll get a lot of additional man-hours," Yoshitani said.
Terminal 30 was once viewed as an opportunity to lure an entirely new carrier to the Seattle seaport, and it is unknown whether joining the crowd using Terminal 18 will be enough to entice ships that have not yet called here to do so. Yoshitani said he is "optimistic" about filling China Shipping's place at Terminal 18. Leadership of the International Longshore & Warehouse Union Local 19 could not be reached for comment.
By 2012, the group of steamship lines using Terminal 18 could be diminished with the departure of one of Seattle's oldest customers, the Tokyo-based Nippon Yusen Kaisha, or NYK Line, for which the Port of Tacoma is building a $300 million, 168-acre terminal on the industrial east side of Tacoma's Blair Waterway.
Still, "having a major line like China Shipping, which is gaining market share, is clearly an advantage for the port," Bingham said. "If the pricing is right ... the port could attract a smaller trans-Pacific liner, depending on their volumes."
Watters said that SSA is "having discussions with MSC, and also talking with other folks to come in at Terminal 18. We'll probably have an announcement later this year as to some new customers for Terminal 18."
Running cargo is a complicated business -- a partner in one port may be a customer to be wooed in the next, members of the same global shipping alliances poach one another's business, and seaports fall over themselves trying to court the organized mayhem to bring trade and the resulting jobs to their communities.
As one example, Long Beach SSA Terminals LLC, formed to run that port's 170-acre Pier A, includes Terminals Investment Limited, an affiliate of MSC, which has been doing the Texas Two-Step with SSA and the Port of Seattle over whether to bring containers through Elliott Bay.
Last April, the Port of Seattle decided to push back construction of the $62.4 million-and- rising Terminal 91 cruise facility by one year for a new opening date of April 2009, keeping the two berths at Terminal 30 open for Princess Cruises and Holland America Line through the current cruise season. Before the delay, the terminal was expected to open by year's end.
The port is planning to spend $62.4 million on cruise operations to gain $6.1 million in new cruise revenue; $31.5 million of the cruise lease revenue gained by the move would have been taken in at the five-year-old, $18 million Terminal 30 cruise building slated to be destroyed.
Vessel traffic through Puget Sound is expected to grow 5.6 percent as a result of the seaport project, which the port estimated will bring 75 more deep-draft vessels per year. Still, a softening economy has hit all the West Coast ports hard, and Yoshitani said he believes the Port of Seattle's container volumes would decline between 5 percent and 7 percent this year.