COSCO SHIPPING Holdings Co. Ltd. announced on July 8 that the Committee on Foreign Investment in the United States “determined that no unresolved national security issues” would prevent the company from acquiring Orient Overseas (International) Limited (OOIL).
OOIL is the parent company to Orient Overseas Container Line, which currently operates Long Beach Container Terminal (LBCT) with a 40-year lease at the Port of Long Beach’s Middle Harbor. The acquisition approval is contingent on the company agreeing to divest LBCT to a “suitable, unrelated third party” that is acceptable to the U.S. government.
“Upon completion of the acquisition, COSCO SHIPPING Holdings’ leading position in the global container shipping industry will be reinforced and its operating scale will be further expanded,” the announcement stated. “Moreover, greater synergies between its subsidiary, COSCO SHIPPING Lines and OOIL can be achieved and their profitability will be increased through the enhancement of operational efficiency, thus enabling rapid development to be achieved.”
COSCO and OOIL entered into a National Security Agreement with the Department of Homeland Security and the U.S. Department of Justice and committed to the sale of LBCT. Ownership of the terminal will be transferred to a U.S. trust, under which OOIL is the beneficiary, until a sale is finalized.
On June 29, the Anti-Monopoly Bureau of the State Administration for Market Regulation of the People’s Republic of China announced it would not prohibit COSCO’s acquisition of OOIL. COSCO is a Chinese state-owned shipping line, while OOIL is a Hong Kong-based private company. The impacts of the sale on the Port of Long Beach are undetermined.
“The Port of Long Beach continues to monitor the developments regarding the announced purchase of OOIL,” Noel Hacegaba, managing director of commercial operations and chief commercial officer for the port, said. “We await the appointment of a trustee for Long Beach Container Terminal, and we look forward to working with all parties involved to make sure the most advanced container terminal in North America continues on the path to success.”
During a closed session meeting on July 9, the Long Beach Board of Harbor Commissioners met with Hacegaba to discuss price and terms of payment for the Middle Harbor operation. According to port staff, there was no action taken and therefore the port is unable to comment further on the situation. Long Beach Container Terminal President Anthony Otto declined to comment at this time.