SAN FRANCISCO PORT READY TO GIVE UP ON COSCO

SAN FRANCISCO PORT READY TO GIVE UP ON COSCO

Despite some blustering from city hall, officials at the Port of San Francisco have seemingly conceded the loss of China Ocean Shipping Co. (Cosco) to the nearby Port of Oakland.

On Tuesday, Walter Abernathy, general manager at the San Francisco port, said the facility would do its best to fill the space left by Cosco when the state-owned carrier slips across the bay in April."On the one hand, we are pleased that Cosco has plans to substantially expand their service in Northern California with new ships and cargo," Mr. Abernathy said in a written statement.

"However, we regret the apparent decision to expand their service in Oakland," he said. "In the short term, their loss will hurt financially, but it will create a marine terminal opportunity here, which we will market aggressively."

Cosco last year accounted for roughly $1.7 million in annual port revenue, comprising about 17 percent of the facility's cargo ship revenue. At the same time, the carrier shipped roughly 30,000 20-foot equivalent units (TEUs), accounting for almost a third of the port's total cargo volume.

Despite Mr. Abernathy's comments, an official in San Francisco City Hall vowed to keep up the fight.

"We are still not giving up. I think there is still some room to maneuver," said James Fang, world trade adviser to Mayor Frank Jordan. "I think the Cosco people have just exercised their option. If we try hard enough, we can still pull this thing out of the fire."

Port of Oakland officials, meanwhile, wasted little time on the matter, calling a special meeting to ratify a five-year terminal-use agreement with the Chinese carrier.

Although relatively minor by port financial standards, the deal to bring Cosco into the facility's Howard Street terminal is expected to contribute another $1.5 million to $2 million in annual revenue.

"I'm really overjoyed because I know how important Cosco is, I know how important China is, and most of all, I know what the potential for growth is," said John Loh, one of the port's seven appointed commissioners.

"(But) after everything is said and done, we are the Bay Area. What's good for Oakland is good for San Francisco, and what benefits San Francisco benefits Oakland," he added. "We are all in the same family."

For their part, Cosco representatives in New Jersey declined to comment on the shift of operations from San Francisco to Oakland. The carrier's contractual commitment to San Francisco runs out in April.