Port of Boston Looks to China to Fill Void Left by Maersk's Departure

BOSTON – The Port of Boston's search for a carrier to replace recently departed shipping giant Maersk Sealand has shifted to China during a time of high diplomatic tensions with the United States.

Port director Mike Leone is in Beijing this week meeting with officials at the China Ocean Company Shipping Group about establishing Boston as a direct port of call.

Officials at the company — known as Cosco Group — visited Boston earlier this month. Leone is expected to return to Boston on May 1.

The overtures from the Massachusetts Port Authority come at a time when U.S.-China relations are strained, first by the detention of 24 Americans after a U.S. spy plane made an emergency landing in China on April 1, then by President Bush's decision this week to offer arms to Taiwan. The Chinese consider Taiwan a renegade province.

Leone's trip was planned before the recent events in China. Concerns about the political situation never rose to a level that Massport considered canceling the trip, said Massport spokesman Jose Juves.

"Our objective is to maintain the viability of the Port of Boston and the 10,000 jobs associated with it," he said. "We're going to talk to any interested parties."

Shipping consultant Jim Brennan said trade restrictions, not politics, influence business decisions. Neither the U.S. or China trade are like to impose new restrictions, despite current tensions.

"I suspect Beijing is still in the hard currency game and is unlikely to make that decision," said Brennan, of Reston, Va.-based Norbridge Inc.

President Bush is an advocate of trade with China.

Massport has courted shipping companies in the Caribbean and South America, but talks with Cosco have progressed to "deeper discussions," said Massport spokeswoman Georgeane Tacelli.

Leone left for China Sunday to meet with Cosco President and Chief Executive Officer Wei Jaifu, Tacelli said. Massport will also meet with Wei during a scheduled visit to the U.S. at the end of May, she said.

Cosco Group owns about 500 merchant ships that visit more than 1,200 ports in 500 countries, according to a company Web site. It services numerous ports on North America's east and west coast, including New York, Seattle and Oakland.

Massport has been trying to replace Maersk Sealand since it stopped direct service to Boston in November. Maersk was the only remaining member of a five-company shipping alliance that disbanded last July after more than a decade in Boston. The alliance accounted for 35 percent of the port's container volume.

Maersk still moves cargo through Boston on barges from other ports, so Boston saw just a slight decrease in container volume last year, dropping from about 1.16 million container tons in 1999 to 1.11 million. Maersk is owned by Copenhagen-based A.P. Moeller group.

But additional direct-call service would allow a mid-sized port such as Boston to attract new business, and retain current business, because it lowers transportation costs for manufacturers, Brennan said.

"It is absolutely critical to have as many direct-call carriers as your port and the market can sustain," he said.

Boston recently made $100 million in improvements to vessel and yard operations. The port, ranked 30th in the country in total cargo volume in 1999, has room to grow, Tacelli said.

Bill Ciesinski, transportation logistics manager of Boston-based International Forest Products, said his company doesn't use the port of Boston. But a Cosco connection gives the company incentive to use Boston by opening Far East markets.

"It could develop into more market share," he said.