Long Beach Container Terminal
Updated on May 7th 2024 | 3 minute read
Our size and scale mean we can invest in a broad range of local, national and global investment opportunities to help us grow members’ super savings and maximise their retirement income. We seek world-class investment opportunities, like the Long Beach Container Terminal (LBCT), to fund our members’ futures.
What is Long Beach Container Terminal?
The LBCT is located in Los Angeles, California and has three operational berths. It’s part of the combined Los Angeles / Port of Long Beach Complex, which is the largest cargo gateway in North America.
Within this complex, LBCT handles more cargo than any other terminal, with fewer delays. Truck turn-around times set the bar for the area, while best-in-class infrastructure, deep berth access and rail connectivity keep things moving.
LBCT’s key revenue streams include:
Vessel lift
Income from loading or unloading cargo containers from vessels (main source of revenue).
Rail lift
Income generated from loading or unloading cargo containers to LBCT’s on-dock rail facility.
Terminal services
Includes income from refrigerated container monitoring, vehicle inspections and yard services.
Demurrage
Fee charged to liners for containers that are kept on the yard for extended periods or arrive earlier than anticipated.
Why we invest in LBCT
Australian Retirement Trust invested in LBCT in late 2019 and owns a 6% interest in the terminal. Investing in LBCT offers:
Exposure to arguably one of the most efficient and lowest cost terminals in the largest port complex in North America
A long-term, highly contracted revenue underpinned by a 20-year commitment where a minimum volume is guaranteed with one of the largest container shipping companies in the world
An attractive, risk-adjusted return that is correlated to US gross domestic product (GDP)
A strong yield profile following the completion of the third berth
Environment and safety
Over the past ten years, LBCT has taken action to reduce its environmental footprint through automation, electric fleet, shore power and rail capacity. Since 2015, LBCT has increased container movements from 700,000 to more than 2.5 million while greenhouse gas emissions from equipment and vehicles (scope 1 emissions) have declined. In 2022, LBCT reported that 66% of its heavy equipment was electric, an increase from 63% in 20211.
LBCT has a climate action plan2 that includes emission reduction targets with various initiatives that are estimated to cost nearly $200 million (USD). The plan relies on collaboration with partners throughout all parts of its network to achieve the net-zero goal. In its net zero progress report, LBCT has indicated that in 2022-2023, it secured $67 million (USD) of government grants to support the company’s current plan to achieve a zero emission facility by 2030. This includes funding for, human-operated terminal equipment and electric charging units.
Safety is also a top priority for LBCT with the terminal’s lost time injury frequency rate reportedly decreasing by more than 60% from 2018 to 2023. LBCT has received several industry awards for safety since 2019.
Outlook
LBCT is anticipated to perform strongly and ahead of original expectations over our investment horizon. In the short term, dips in global spending habits mean that we’re likely to see less demand for containers. But medium to long term, e-commerce should stay strong - and LBCT’s advantages make it an attractive option for shippers. All of which makes for a robust outlook for this investment.
Learn more about our investments
- Your clients can review their investments anytime by logging in to Member Online or through the Australian Retirement Trust app
- Find out more about our approach to sustainable investing and our Socially Conscious Balanced investment option
- View more information about our Super Savings investments
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