Santa Ana-based U.S. Lines and Melbourne, Australia-based ANL Container Lines said last week that they will shift operations from the Port of Los Angeles's TraPac Terminal to Long Beach port facilities as of April 1.
ANL could not be reached for comment and U.S. Lines declined to comment on their reasons for the move. CMA CGM, the world's No. 3 ocean carrier, purchased Santa Ana-based U.S. Lines in December and Melbourne, Australia-based ANL in 1998.
The departure by the two lines is the latest in a series of shipping line departures from TraPac over the past five years.
In November, three TraPac tenants -- CSAV Norasia, Sinotrans Container Lines, and Wan Hai Lines -- left TraPac and began operations at Long Beach's TTI Terminal.
CMA CGM departed the TraPac terminal for neighboring Long Beach in 2002. The French line cited the terminals' inability to handle the carrier's then-on-order 8,000-TEU vessels when it decided to head to Long Beach. Shortly after carrier China Shipping did the same.
In a letter to Los Angeles port officials last summer, Norasia, Sinotrans and Wan Hai said they had "no choice but to leave TraPac" due to lack of movement on improving terminal efficiencies. The three lines?vessel sharing agreement, the Mid-China Transpacific, ended shortly after its departure from TraPac.
According to TraPac officials, the combined departures have cost the terminal more than 50 percent of its business since 2002. The total losses, including U.S. Lines and ANL, represent more than $70 million in annual cargo. TraPac did not cite the losses in TEUs.
The two latest departures leave only Mitsui O.S.K. Ltd., APL, Compania Sudamericana de Vapores and Hyundai Merchant Marine Co. calling at the terminal, TraPac said. However, APL and Hyundai only call at the terminal as members of the New World Alliance, of which MOL is also a member. APL has its main Southern California operations at Los Angeles' Global Gateway South terminal and Hyundai operates its main Southern California facility at the Port of Long Beach.
The ports of Los Angeles and Long Beach have found themselves boxed in since major terminal development stalled at both ports nearly five years ago.
In 2002, the National Resource Defense Council won an appellate 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. The settlement eventually cost the port more than $100 in retrofits and lost revenues.
Shortly after the NRDC settlement, a minor development project at the Port of Long Beach was shelved following city council opposition and threatened litigation over environmental issues. Following both incidents, major development at the two ports ground to a halt.
Since then, the ports have pledged hundreds of millions of dollars in environmental projects. Despite the four-year effort, opposition to port development from the groups has continued.
In December, the Port of Los Angeles broke its self-imposed moratorium on development and passed preliminary environmental documents for the long-delayed TraPac expansion, a $1.5 billion proposal that includes numerous environmental mitigation components. The project would renovate 3,000 feet of existing wharfage at the terminal, construct more than 700 feet of new wharf, add 57 acres to the terminal, and construct a new on-dock rail system.
Ten days after Los Angeles port officials approved the TraPac EIR, a coalition of 16 environmental, community and labor groups fronted by the NRDC, asked the Los Angeles City Council, which must second the port-approved EIR before the project can move forward, to reject the document. The group claimed in its appeal to the City Council that port officials are not moving fast or far enough in proposed environmental efforts regarding the project.
The coalition appeal claims that Los Angeles Harbor Commission has failed to adopt aggressive air-quality mitigation programs curtailing port-generated pollution. The groups also claim that the port has fallen behind schedule in implementing its environmental Clean Air Action Plan, jointly developed and approved with the Long Beach port commission in November 2006.
Following the coalition's appeal, the council delayed a vote on the TraPac EIR and referred the document to its Committee on Trade, Commerce, and Tourism, which is headed by port-area Los Angeles City Council member Janice Hahn, who has sided with the coalition.
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