COSCO/kanter/mike1st/mark2nd

By LARRY KANTER

Staff Reporter

With plans by the Port of Long Beach to build a new container terminal for the China Ocean Shipping Co. in jeopardy, officials from the rival Port of Los Angeles are making a bid for the fast-growing, Chinese government-owned shipping line.

Los Angeles Harbor Commission President Leland Wong and port director Larry Keller are scheduled to be in China this week, on a visit they say has been planned for months.

But in light of Long Beach's recent troubles, the pair at the last minute revised their itinerary to include a meeting with executives of the shipping line, known as Cosco, according to Wong.

"We're going to approach them just like we would any other customer," Wong said in an interview prior to his departure for China late last week. "We have facilities to offer that are superior (to those being offered by Long Beach). We feel we can negotiate a very good contract."

The stakes for Long Beach and Los Angeles are enormous. China is the region's second-largest trading partner, with more than $18 billion worth of cargo moving between L.A. and China each year. Cosco handles about 25 percent of U.S.-China trade.

Those stakes could become sigificantly higher if Cosco were to take over OOCL Inc., a large Hong Kong-based shipping company, as some shipping industry experts speculate may happen when Hong Kong reverts to Chinese control in July.

Under its agreement with Cosco, Long Beach promised the company a working terminal by July 1, 1998. After that, stiff monthly penalties kick in, which could cost Long Beach hundreds of thousands of dollars, according to Don Wylie, director of trade and maritime services for the Port of Long Beach.

The project, he said, already is one to two months behind schedule.

The question reverberating through local shipping circles is which side will win the latest battle.

L.A. is prepared to offer Cosco a new, built-to-suit container terminal complete with on-dock rail capabilities at its new Pier 400 development a 470-acre, $300 million facility under construction in San Pedro Bay.

Not only would the facility be custom-built, it is free from the historic structures that dot the Long Beach Naval Station as well as the symbolism associated with transferring a former military base to a facility owned by the People's Republic of China.

Pier 400 is scheduled to be completed by 2000.

For reprint and licensing requests for this article, CLICK HERE.

Prev