South Korean shipping line Hyundai Merchant Marine Co. (HMM) said it will buy a fifth of the company that runs the biggest container terminal at Long Beach Total Terminals International terminal (TTI), Calif., the U.S.’s second-largest port.
HMM announced that its board of directors decided to buy a 20-percent stake in TTI and equipment-leasing firm HTEC for a combined US$15.6 million.
HMM will now become the No. 2 stakeholder in TTI after Geneva-based Mediterranean Shipping Co (MSC). TTI operates terminals at Seattle and Long Beach.
HMM will receive the same port tariff rates with MSC, and it will help reduce terminal handling costs and secure stable profitability.
Also, MSC will stand surety for TTI’s loans and lease which means HMM is not responsible for TTI’s debts.
The principal benefits from acquisition of TTI stake are as below:
1. Expand US West Coast BSA(Basic Slot allocation)
2. Buy stake at low investment costs
3. Receive same port tariff rates with MSC
4. Improve sales competitiveness in Asia-US market.
HMM said “TTI’s handling volumes will dramatically increase, as we strengthen Asia-US services through strategic cooperation with 2M beginning of April.
On Wednesday, a U.S. court allowed Hanjin Shipping to sell its stake in TTI. Before Hanjin's bankruptcy in August, TTI was the largest-volume terminal at the Port of Long Beach. But since then the port's volume has dwindled and TTI's container-handling activity has slowed significantly.