Orient Overseas Agrees to $4.6 Billion, 40-Year Long Beach Terminal Lease
Orient Overseas (International) Ltd. agreed to lease a terminal at Port of Long Beach, California, for $4.6 billion over 40 years, the biggest such agreement in U.S. history, according to the port operator.
The shipping line, Hong Kong’s biggest by market value, will also invest about $500 million in cargo-handling equipment for the Middle Harbor project through its container unit, Port of Long Beach said in a statement on its website yesterday.
“It demonstrates our long-term commitment to the Port of Long Beach as the gateway of choice for North America,” Philip Chow, chief executive officer of the container unit, Orient Overseas Container Line, said in the statement.
The port is investing $1.2 billion to consolidate two old terminals into a modern one, which is scheduled to be completed in June 2019 with annual capacity of 3.3 million 20-foot boxes, according to documents posted on the port’s website. The new terminal is projected to create more than 14,000 permanent jobs by 2020, according to the statement.
Separately, the shipping line said fourth-quarter sales fell 11 percent to $1.35 billion as it carried fewer containers and charged lower rates.
The company hauled 1.28 million 20-foot cargo boxes in the period, a drop of 2 percent, it said in a filing to the Hong Kong stock exchange. Average revenue per box dropped 9.4 percent, it said.
To contact the reporters on this story: Jasmine Wang in Hong Kong at Jwang513@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at email@example.com