China Shipper Nears L.A. Deal.

The Port of Los Angeles is in final negotiations to build a major cargo terminal for a fledgling Chinese shipping line that has vowed to become one of the top five shipping companies in the world.

Unlike the national controversy ignited when the Port of Long Beach announced plans to build a terminal for another Chinese shipping line, these negotiations have been conducted almost to conclusion without drawing any media attention or political opposition.

The Port of L.A. cargo terminal is to be built for the 3-year-old China Shipping Co. on about 70 acres of vacant land once occupied by Todd Shipyards. It would be the Chinese company's first exclusive container terminal in the United States.

Officials at the U.S. headquarters of the Chinese company, located in Secaucus, N.J., were unavailable for comment last week. But L.A. port officials confirmed that negotiations should be completed within the next few weeks, after which the deal is to be sent to the Board of Harbor Commissioners and Los Angeles City Council for final approval.

Snagging the Shanghai-based shipping company would be a coup for the L.A. port, which is the second busiest in the United States and the eighth busiest in the world. The Port of Long Beach, an arch rival of the Los Angeles port, also was trying to woo China Shipping Co., and still hopes to build a facility to complement its container tenninal at the L.A. port.

"We still may be talking to them," said Art Wong, a spokesman for the Long Beach port. "They are a relatively new shipping company and growing extremely fast."

Long Beach, which has the busiest port in the United States, was stung three years ago when its deal to build a 145-acre terminal for China Ocean Shipping Co., or Cosco, fell through. Cosco wanted to lease a terminal on the site of the former U.S. Naval Station, after sharing container facilities for nearly 20 years at the Long Beach port.

But several conservative Republican congressmen criticized Cosco's proposed terminal project because they felt the shipping line might use the facility for intelligence gathering.

One of the California congressmen most vociferously opposed to Cosco getting its own facility in Long Beach was Randy Cunningham, R-San Diego, who had described the Beijing-based Cosco, which is owned by the Chinese government, as a quasi-military operation that could bring spies in through the Long Beach area.

Cunningham last week expressed similar concerns about the China Shipping Co. coming to Los Angeles. He opposes the company taking full control of its soon-to-be-built terminal, using Chinese stevedores to load and unload its cargo instead of using U.S. long-shoremen.

"If they take full control of this facility, I will oppose it," he said during a phone interview from his Washington, D.C. office.

U.S. labor stronghold

L.A. port officials noted that the International Longshore and Warehouse Union controls all labor at the port and would never let Chinese stevedores handle the cargo.

While labor issues apparently would not be an issue, there are strong links between Cosco and the China Shipping Co. Like Cosco, the China Shipping Co. is owned by the Chinese government. It is headed by Capt. Li Kelin, Cosco's former president who left three years ago to form this new venture.

Shipping authorities said that the new Chinese shipping line is on an aggressive growth campaign. They said that, while some of the young company's financing is clearly coming from the Chinese government, they believe there are other sources as well.

Whatever the sources, the financial backing of China Shipping is considerable. It already has more than 90 container ships, and has ordered several more enormous container ships -- each capable of carrying 10,000 TEUs (20-foot equivalent units), said Julia Nagano, an L.A. port spokeswoman. Those ships are to be delivered in the next few years, she said.

Currently, China Shipping has two ships a week that call at the Los Angeles port. That is slated to increase to three ships a week beginning in May, Nagano said.