Remember those long lines and empty supermarket shelves during the height of the COVID-19 pandemic? We got used to hearing terms like “unprecedented” and “supply chain disruption” on a daily basis. Until then, most of us probably didn’t think about shipping things from A to B, let alone who owns the container terminals at ports of exit and entry.
It might surprise you to know that you do, in part!
In 2019, we bought a stake in the Long Beach Container Terminal (LBCT). LBCT is a part of the combined Port of Los Angeles/Port of Long Beach complex, which is the largest port complex in the United States by tonnage.1
What exactly is a container terminal?
Most big seaports have container terminals, like airline terminals at an airport. Everything from toys to electrical goods, cars, oil, gas, and even food, passes through these terminals daily, in vast amounts, having sailed around the world in giant steel boxes on massive cargo ships.
Once the ships arrive, their containers are inspected and moved along to their next destination by the terminal operators. Consumers and businesses rely on this critical infrastructure – both in the city where it operates, and as part of the global economy.
Over US$200 billion (about A$300 billion) worth of cargo moves through the Port of Long Beach every year. LBCT earns money through contracts with large shipping companies and the ports themselves, money that is also tied to the number of containers that pass through.
Why LBCT?
We look for infrastructure assets like LBCT that we believe have a long lifespan and revenues supported by long-term contracts and therefore have the potential to enjoy strong returns over the long term. The performance of infrastructure assets has the potential to deliver returns that are independent of the performance of more traditional asset classes, like shares and bonds, that tend to be more affected by inflation or other market factors. (Check out our article on infrastructure investments to learn more, including investment risks).
LBCT is an infrastructure asset with a focus on sustainability and efficiency.
In 2021, it completed a huge modernisation project, known as the Middle Harbor Redevelopment project, that upgraded berths to accommodate the largest cargo ships and introduced advanced cargo-handling technologies2.
Through the use of electric infrastructure, vehicles and equipment, LBCT is aiming to become a net-zero emissions marine terminal by 2030. The conversion of cranes and cargo handling vehicles to zero-emissions electric has reduced greenhouse gas and other pollutant emissions by 86% and has quadrupled its cargo-handling capacity3. Further, both the ports of Long Beach and Los Angeles have adopted a Clean Air Action Plan (CAAP), and LBCT seeks to be the first marine terminal to meet all CAAP goals by 2030.
LBCT was even awarded the Sustainable Innovation Project of the year by the US Green Building Council-Los Angeles in December 2023!
We think LBCT’s focus on sustainability and efficiency makes LBCT attractive to shippers, a good corporate citizen in its own neighbourhood, and a long-term infrastructure investment that will help deliver strong returns.
1. Top 20 North American ports | AJOT.COM
2. The Making of a State-of-the-Art Terminal | Port of Long Beach (polb.com)
3. Long Beach Container Terminal wins sustainable innovation award | Marine Log %
