Macquarie buys Long Beach Container Terminal


The Australian investment company Macquarie has bought Long Beach Container Terminal, a newly built facility that promises to be one of the largest marine container handling facilities in the US.   

Macquarie has agreed to pay US$1.78bn to buy the terminal from Orient Overseas (International) Limited (OOIL) who was obliged to sell the development on being taken-over by COSCO on the ground of national security. This cannot have been entirely welcome to either COSCO or OOIL as the Long Beach presence has been one of the companies longest held assets and core to their presence on the trans-pacific shipping trade.

OOIL has agreed to a commitment to provide “a Container Stevedoring and Terminal Services Agreement” for the terminal, essentially providing operational management for the facility. 

The decision to sell to Macquarie appears to be largely driven by the price, with the Australian institution being one of three or four companies that bid for the terminal. These included EQT Infrastructure, Seaspan and Yildirim.

The facility is one of six container terminals at the Port of Long Beach. Although operations at the ‘Pier E’ location are long established, they have been under-going a redevelopment designed to give the terminal the ability to handle three Ultra Large Container Vessels simultaneously with new highly automated crane and container handling systems. This ‘Middle Harbour Terminal Redevelopment Project’ will be capable of handling roughly half the container volumes at the entire Port. The Port of Long Beach handled 8m TEUs in 2018.

Macquarie is now one of the largest owners of infrastructure in the world, including power generation and other utilities as well transport. Its assets are estimated to be worth approximately US$129bn. The purchase was made within the Macquarie Infrastructure Partners IV fund. This has already made a number of investments in transport assets in the US including a minority share in a container terminal at the port of New York. Although the company sold its holding in the Gdansk Terminal in Poland earlier this year, this appears to have been exceptional, with the investor very much looking to acquire new opportunities.

Source: Transport Intelligence, May 2, 2019

Author: Thomas Cullen