Supply Chain Research

COSCO Shipping will probably have to sell its Port of Long Beach assets in order to complete its acquisition of Orient Overseas, the Wall Street Journal reports. That’s not a surprise given the Trump administration’s concerns about Chinese investment in the U.S., as outlined in Panjiva research of October 25, and the requirement for approval from the Committee on Foreign Investments in the U.S. (CFIUS).

The disposal shouldn’t prove to be a challenge given the apparent interest of private equity investors in the sector, as shown by InstarAGF’s acquistion of Amports, and providing COSCO and Orient Overseas both retain their shipping relations with the port. Panjiva data shows that COSCO Shipping accounted for 18.2% of volumes inbound to the Port of Long Beach in the past 12 months (making it the largest), and Orient Overseas 12.6% (number three).

Chart segments container handling inbound to the Port of Long Beach by steamship line and port of lading company for the past 12 months, denominated in TEUs. Source: Panjiva

It is unlikely that COSCO Shipping would want to withdraw from the port anyway – assuming that isn’t a CFIUS condition – given that it accounted for 37.0% of the combined COSCO Shipping and Orient Overseas traffic into the U.S.

Chart segments container handling inbound to the U.S. by COSCO Shipping and Orient Overseas by country of port of lading and port of unlading company for the past 12 months, denominated in TEUs. Source: Panjiva