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U.S. Questions Cosco’s Takeover of Cargo Terminal in Long Beach

A U.S. national-security review has raised concerns about China’s Cosco Shipping taking control of the Long Beach, Calif., container terminal. Photo: Bloomberg News By Costas Paris in New York and

Joanne Chiu in Hong Kong

April 20, 2018 2:34 p.m. ET 8 COMMENTS [7]

A U.S. national-security review has raised concerns about Chinese state-run conglomerate Cosco Shipping Holdings Co. taking control of a large container terminal in Long Beach, Calif., according to people familiar with the matter. The terminal is part of Cosco’s proposed £6.3 billion purchase of an Asian shipping rival[8], which holds a long-term concession to operate the facility at the Port of Long Beach, one of the biggest gateways for imports into the U.S.

Cosco’s takeover of Orient Overseas International[9] Ltd. 0316 0.78% [10] , announced in July 2017, is undergoing a review by the Committee on Foreign Investment in the U.S., a secretive federal panel that vets foreign purchases of American companies[11] on national-security grounds.

Cosco executives met with CFIUS officials this week and proposed to divest or carve out the Long Beach terminal to satisfy U.S. concerns about the deal, the people said.

“The Long Beach terminal is a prized asset, but it’s turning to be a roadblock to the completion of the deal, so it will likely be taken out of the equation,” one person said. “The plan is to sell it.”

It is unclear if that would satisfy concerns at CFIUS, which is chaired by the Treasury Department. A Treasury spokesman declined to comment.

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The Long Beach terminal is one of the few in the U.S. that is almost fully automated and can handle some of the largest container vessels.

The terminal is expanding to facilitate ships carrying more than 20,000 boxes each. Cosco Vice Chairman Huang Xiaowen said on April 3 that the deal was on track to be completed by June, noting American approval was needed as Orient Overseas had assets in the U.S. “Up to now we are quite confident to push forward this acquisition…. It’s progressing normally,” he said at a news conference.

CFIUS has scuttled several recent transactions, including Broadcom[16] Ltd.’s £117 billion takeover of chip rival[17] Qualcomm[18] Inc. and the sale of MoneyGram International Inc.[19] to Chinese billionaire Jack Ma’s Ant Financial Services Group.

Its review of the shipping deal comes at a tense time between the U.S. and China, with leaders threatening to impose new tariffs and regulators on both sides of the Pacific weighing in on more matters. On Thursday, China’s antitrust regulator said it had concerns about[20] Qualcomm Inc.’s £44 billion purchase of rival NXP Semiconductors[21] .

Days earlier, the U.S. banned American companies from selling products to ZTE Corp.[22], a Chinese maker of telecommunications equipment. Cosco, which operates around 350 container ships, hasn’t hidden its ambition to become one of the world’s dominant carriers.

A takeover of Orient Overseas would make Cosco the world’s third-biggest container operator in terms of capacity, behind Denmark’s Maersk Line and Switzerland-based Mediterranean Shipping Co. It also would create the second-biggest mover of U.S. imports with an 11.8% market share, and the third largest in terms of exports with an 8.5% share, according to the Journal of Commerce.

Orient Overseas, which is listed in Hong Kong, is the world’s seventh biggest operator with around 100 ships in operation. Apart from the Long Beach terminal, it operates a container terminal in southern Taiwan.

Cosco has minor investments in other U.S. ports, including another pier at Long Beach as well as at the ports of Los Angeles and Seattle. These assets haven’t been part of the discussions, the people said. The proposed Cosco deal would also need approval from China’s Ministry of Commerce, which is waiting for CFIUS’s ruling.

–Kate O’Keeffe contributed to this article.

References

  1. ^ Biography (www.wsj.com)
  2. ^ @CostasParis (twitter.com)
  3. ^ [email protected] (www.wsj.com)
  4. ^ Biography (www.wsj.com)
  5. ^ @joannechiuhk (twitter.com)
  6. ^ [email protected] (www.wsj.com)
  7. ^ 8 COMMENTS (www.wsj.com)
  8. ^ £6.3 billion purchase of an Asian shipping rival (www.wsj.com)
  9. ^ Orient Overseas International (quotes.wsj.com)
  10. ^ 0316 0.78% (quotes.wsj.com)
  11. ^ vets foreign purchases of American companies (www.wsj.com)
  12. ^ ZTE’s Surprise U.S.

    Success, Now Under Threat (www.wsj.com)

  13. ^ Billionaire Raises His Bet on Container Ships (www.wsj.com)
  14. ^ China’s Cosco to Buy Shipping Rival Orient Overseas for £6.3 Billion (www.wsj.com)
  15. ^ Chinese Shipping Giants Seek Control of ‘Maritime Silk Road’ (www.wsj.com)
  16. ^ Broadcom (quotes.wsj.com)
  17. ^ £117 billion takeover of chip rival (www.wsj.com)
  18. ^ Qualcomm (quotes.wsj.com)
  19. ^ the sale of MoneyGram International Inc. (www.wsj.com)
  20. ^ said it had concerns about (www.wsj.com)
  21. ^ NXP Semiconductors (quotes.wsj.com)
  22. ^ banned American companies from selling products to ZTE Corp. (www.wsj.com)

Record cargo first quarter for Leipzig/Halle airport

Leipzig/Halle Airport handled 298,500 tonnes of airfreight in the first three months of 2018, a 12.3% increase on same period last year. The German gateway, and Europe’s fifth-largest cargo hub, handled about 107,500 tonnes in March, setting another monthly record. Leipzig/Halle Airport handled 1.14m tonnes of airfreight in 2017, a 8.2% rise over prior year, which also represents an elevenfold increase in cargo volumes over a decade.

The volumes handled by DHL express hub operation at Leipzig/Halle are the primary driver of growth at the airport. Volumes are further boosted by an extensive portfolio of freight charters by 60 cargo airlines provides a route network connecting more than 200 airports around the globe. Leipzig/Halle Airport does not have a night time flight curfew.

Johannes Jahn, managing director of Flughafen Leipzig/Halle, said: “The significant growth in freight volumes underlines the potential at Leipzig/Halle Airport, which offers ideal conditions for air traffic and logistics companies as a multimodal base at the heart of Europe.” Leipzig/Halle is also the home base for AeroLogic, a joint venture operated by DHL Express and Lufthansa Cargo. Two Antonov 124-100 aircraft have been permanently stationed at Leipzig/Halle since March 2006 as part of the SALIS Project (Strategic Airlift International Solution), providing freighter uplift for key members of the NATO western military alliance.

Russia’s Volga-Dnepr announced two weeks ago that it will withdraw from SALIS at the end of this year.[1]

The airport is also the base for a subsidiary of the Volga-Dnepr Group, Aircraft Maintenance and Engineering Service (AMTES), which has a maintenance basis for Antonov 124 and western aircraft at the airport.

Read more Cargo Airport News[2]

References

  1. ^ Opens external link in new window (www.aircargonews.net)
  2. ^ Cargo Airport News (www.aircargonews.net)

Ministers seek uniform road tax for vehicles across country

Uniform road tax structure and national permits for buses & taxis have been recommended by a group of ministers.

India should have a uniform road tax structure for vehicles across states, a group of ministers (GoM) has proposed. The GoM is constituted by the Union road transport and highways ministry. In a meeting in Guwahati, the GoM observed that a uniform tax structure will put a check on people registering their vehicles in low tax states and running them in other states.

This would also bring necessary relief to genuine cases requiring transfer of vehicles. The GoM seeks to find solutions to the various problems plaguing the road transport sector in the country so as to improve road safety and facilitate ease of transport. It has also recommended a national bus and taxi permit on lines of such permit for goods transport.

Public transport in the country is growing annually at a rate of just about 2 per cent, as against a 20 per cent annual growth in private transport.

A national permit will give the much needed fillip to public transport and help reduce road congestion and its attendant problems.

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In order to promote alternate fuel for vehicles, the GoM has also proposed liberalisation of permit system for electric vehicles.

In addition, it has recommended raising the tax on diesel vehicles by 2 per cent while lowering the tax on electric vehicles.

For the latest automotive news and reviews, subscribe to our e-newsletter and like us on Facebook or follow us on Twitter & Instagram[1][2][3][4]

References

  1. ^ e-newsletter (www.autox.com)
  2. ^ Facebook (www.facebook.com)
  3. ^ Twitter (twitter.com)
  4. ^ Instagram (www.instagram.com)

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