Matson, Horizon win bids for L.A. port cranes
Two main Jones Act ocean carriers have won the bid to purchase three gantry cranes from the Port of Los Angeles with a plan to refurbish and install them on the island nation of Guam.
Oakland, Calif.-based Matson Navigation and Charlotte, N.C.-based Horizon Lines plan to have the cranes up and running at Guam's commercial port by next year. The two lines, concerned with failed local governmental attempts to replace two aging cranes at the island port, offered the deal to the Guam government last week. The Guam government accepted the deal earlier this week, just in time for Matson and Horizon to meet the Tuesday deadline to bid on the Los Angeles cranes. Financial details of the transaction were not released.
The three cranes are being replaced at the Los Angeles TraPac Terminal with new Paceco-Mitsui Co.-built cranes that arrived in Los Angeles last week.
In return for picking up the $12 million to $15 million tab for purchasing and installing the three refurbished cranes, the two shipping lines are asking that the cranes be used at the Guam port for at least five years. The firm's are also asking that their Guam Port Authority user fees be offset by the costs of the cranes. Future negotiations would be required to set the cost offsetting.
The Guam port's current cranes — one 24 years old and one 28 years old — are rapidly reaching a point where maintenance is a difficulty for the port. A lack of new cranes could create a bottleneck for a U.S. military transfer of personnel and facilities to Guam from Okinawa set to begin in 2010. Cargo volumes through the Guam port are expected to triple during and after the buildup.
The Guam government has made several attempts to purchase new cranes, with the most recent effort being stymied by the government's own General Service Agency. The Guam GSA found that the sole bidder in the most recent 10-month-long bidding process — Shanghai-based crane maker ZPMC — did not meet certain criteria in the bid and went $2 million over the port's budget of $14 million for the cranes. ZPMC has said that it needed to pass along higher manufacturing and shipping costs, mainly due to the world price on steel and fuel, which have developed in the past 10 months.