Los Angeles port loses three shipping lines to Long Beach
A long-delayed expansion project at a Port of Los Angeles container terminal has led to the defection of three major shipping lines to the neighboring Port of Long Beach.
The loss of Norasia Lines of Hong Kong, Sinotrans Container Lines of Shanghai, and Wan Hai Lines of Taipei, Taiwan to Long Beach will cost the Los Angeles port nearly $11 million a year in revenue, and a volume loss of about 144,000 TEUs a year, according to numbers cited by the Los Angeles Times.
It is the second major carrier loss for the Trans Pacific Container Service, or Tra-Pac, terminal in less than five years.
CMA CGM, the world's No. 3 shipping line, left Tra-Pac in 2003 after it became clear the facility would not be able to handle the French carrier's then-on-order 8,000-TEU vessels. CMA-CGM now calls at Long Beach's Pier A.
The defection highlights the precarious position the two adjacent ports have found themselves in since all major development stalled at both four years ago. In 2002, the National Resource Defense Council won a appeal court decision stopping a major Port of Los Angeles terminal development project that was nearly completed. Port officials signed a $60 million settlement five months later allowing the facility to open, albeit with major environmental upgrades.
Shortly afterward, a project at the Port of Long Beach was stymied by threatened litigation over environmental issues, and the project was essentially shelved. Since both incidents, major development has ground to a halt as the ports have tried to design projects that keep them out of court.
The Tra-Pac expansion plan, originally planned to have started several years ago, is the first test case for the ports since adopting more detailed environmental impact reporting methods for construction projects. The Tra-Pac project is now in a required public comment phase that ends Sept. 26.
The recent forward movement on the project comes too late for the three Asian lines though. All cited the delayed expansion of the Tra-Pac terminal as the major reason for leaving Los Angeles.
The three told port officials in a recent letter that in order to improve the efficiencies of their operations they 'have no choice but to leave Tra-Pac.' The three lines will stop calling at Los Angeles in early November.
Port of Long Beach officials expect tenant Total Terminals International to announce that the three lines will begin calling at the TTI facility following the move.
The Port of Los Angeles has handled 4.76 million TEUs through July after reaching 7.8 million TEUs in 2006. Long Beach reported 4.17 million TEUs through July, and 7.2 million TEUs for 2006.