Settlement reached on NYK terminal at Tacoma

The Port of Tacoma and a Japanese shipping line have reached agreement on the costs involved with the port’s cancelled plan to build a massive shipping terminal for the company on the port’s Blair Waterway, reported The News Tribune.


Port of Tacoma commissioners have approved a settlement that will provide the port US$5.75 million for costs it incurred for design and development work on a 168-acre terminal for NYK Lines.


The port and the Japanese shipping line cancelled their agreement to build the terminal in 2009 after the recession cut shipping volumes and shipping line and port profits.


The port noted in initial negotiations that it had spent about $11 million on design and construction related expenses for the NYK terminal on the Blair Peninsula before the deal was cancelled.


NYK and its terminal operations subsidiary, Yusen Terminal Tacoma, countered that of that amount $7.8 million in expenses were related to design that was specific to NYK and Yusen’s terminal and which would have no residual value to the port.


The shipping line also asked that a $2 million reservation fee it paid to secure the terminal contract be repaid. Under the original agreement, the port would have refunded that fee as credits against the shipping line’s lease payments for the terminal.


The terminal company as part of the settlement also agreed not to pursue the return of $1 million it paid in costs related to the never-built terminal.


The shipping line has reportedly agreed with terminal operator APM to use that company’s facilities on the port’s Sitcum Waterway for its local business.


That terminal has been under-used since Maersk Line moved its operations to Seattle two years ago. Maersk consolidated its local operations with French shipping line CMA-CGM during the recession. CMA-CGM called on the Port of Seattle in Puget Sound.


The settlement represents a small fraction in the costs that the port incurred in preparing for NYK’s move to Tacoma from Seattle. The port spent a total of about $140 million to acquire land and design new infrastructure before the deal was cancelled.


That cost wasn’t part of the negotiation because the port retains ownership of the land which someday could be the site of a new container terminal.


NYK is scheduled to move its operations to the APM terminal in mid-2012.
(Source:http://www.cargonewsasia.com)