Container Terminal Management
Container Ports in the West Coast of the United State and Canada operate under different types of institutional and management structure than that of Japanese ports. These ports, in many cases serve the same shippers, carriers, and terminal operators. In all of the container ports, in the three countries studied, labor considerations are significant. Other areas of importance given consideration included the type of institutional arrangement for container terminals; the various types of lease arrangements between the ports, the marine carriers, terminal operators and/or others; the markets served; the types of technology employed to make the container terminal “user friendly”; and the productivity of the terminals.
There are now four types of institutional arrangements in Japan for container terminal management: the Public system; the Port Terminal Public Corporation(PTPC)system; the Joint stock company system; and the “New system”. These systems were described in Bollard Nippon, Vol.10 by WAVE, March 1999 “Container Terminal Systems and Trend m Japan.” In North America the e are two basic types of institutional arrangements for container terminal construction and management - the Facility Service Provider model and the Landlord model. A Facility Service Provider arrangement for terminals means that the public sector provides overall inter-port services including stevedoring. This type is represented at the Port of Portland on the U.S. West Coast and is similar to the “new system” for container terminals in Japan. The Landlord arrangement applies to terminals in Los Angeles (6), Tacoma (6), Long Beach (8), Oakland (8), Seattle (6), and Vancouver, Canada (3) for a total of 48 landlord terminal type systems on the North American West Coast.
Most of the landlord ports in the United States tend to be partnership or joint efforts, using the definition of “landlord port”. APL's Container Terminal #300 at Port of Los Angeles is a good example. The Port entered into an agreement with APL to build a terminal to APL's specifications on Port land and when completed the terminal was leased for a long term to APL. As part of the negotiations and agreement, the Port required that APL buy/own the cranes and some other handling equipment. Other container terminals examples that were constructed/leased in this same way include the Port of Tacoma's Sea-Land terminal and all the other newly constructed terminals built in Seattle, Los Angeles, and Long Beach.3
U.S. ports do not normally lease out the land to be improved at the expense of the lessee. From the Port's standpoint the major reason is that they need to retain ownership and control of their properties. From the standpoint of the Lessee, which in most cases is a shipping line, a major reason is that if they leased the land and built the terminal facility with their own money, the terminal would be on the tax rolls. In a normal landlord type lease, the terminal remains the property of the Port and the lessee pays only a more modest “in lieu of” property tax that is usually based on the lease payment amount rather than the assessed valuation of the facility. A second major reason is that most shipping lines do not have the cash, or credit lines, or have better ways to use their money than to build terminals unless they absolutely have to. They would also incur debt at a taxable bond rate and would be required to pledge their own corporate credit. It would also be difficult to sell a mortgage backed bond since they do not own the land and it would require them to list the debt on their balance sheet.4
In the U.S., the public sector (the Port) usually provides both the financing and the construction of the container terminal. Then they are usually leased to private terminal operators, sometimes a stevedoring company and/or a subsidiary of a steamship line. The negotiations are complex and container terminal leases are usually 30-year contracts with periodic reevaluation clauses.5 In the U.S., the majority of a Ports revenue is obtained from operations and leasing of its facilities. These revenues support all of the Port's operations. In general, U.S. public ports usually are given financing capability via bond issues, etc. to provide construction and facilities for terminal expansion.6 The big difference between port authorities in the U.S. and Japan may result from these negotiation approaches. The construction of U.S. ports does not begin before completing negotiations and making agreements. On the other hand, the construction of Japanese port's may begin before all agreements are reached (between ports and users).
