Swire Builds Pacific NW Presence Agreeing to Acquire Westwood Shipping
Swire Shipping announced that it has signed a definitive agreement to acquire U.S.-based Westwood Shipping Lines, a niche operator based in the Pacific Northwest. The Singapore-based shipping company said the acquisition is in keeping with its strategy to grow its operations, including expansion into the Pacific Northwest.
Founded in 1980 and headquartered in Washington state, Westwood currently operates seven con-bulk ships between Japan, Korea, China, and the Pacific Northwest. The company’s business has transitioned in the past few years handling more out-of-gauge and bulk cargo as well as containers and its legacy business in forestry products including large newsprint rolls.
Swire acquires Westwood from Japan’s Sumitomo Warehouse, which acquired the shipping company in June 2011. Sumitomo said its decision to sell the shipping company was based in part on the transition in the business and unpredictability in earnings, as well as the new environmental regulations pending from the IMO. Sumitomo said it acquired the shipping company to maintain and expand its harbor transport business.
Starting in 2015, Westwood began to see a decrease in the shipments of forestry products making the company more dependent on eastbound shipments of containers and large cargo such as machinery from Japan to the Pacific Northwest. Despite the recent improvements in container freight rates, Sumitomo determined that Westwood would be best served by a company with greater expertise in the shipping industry.
“Over the years, we have been looking at strengthening our presence around the Pacific, and Westwood, with its excellent safety standards, high-quality reputation, cargo handling abilities, and long-term customer relationships, emerged as a strong choice,” said James Woodrow, Managing Director, Swire Shipping. “We know that we will be building on Westwood’s sound business fundamentals, and we look forward to broadening our liner network.”
Earlier this week, Swire Shipping announced a new direct service between Vietnam and Seattle in partnership with American freight forwarder UWL. Swire said the new service was part of its efforts to strengthen its presence on the U.S. West Coast. Swire operates a fleet of 26 multi-purpose vessels to over 400 ports on 14 liner routes transporting both project cargo and containers.
“Westwood has enjoyed Sumitomo Warehouse’s supportive role in the transformation of these last couple of years. Now we look forward to benefiting from Swire Shipping’s deep experience while continuing to protect our clients’ supply chains between northeast Asia and the Pacific Northwest through our independent, reliable, and agile operation,” said John C. Mahoney, President and CEO of Westwood.
As part of the acquisition, Swire will purchase four open-hatch multi-purpose ships with gantry cranes owned by Sumitomo and operated by Westwood. Built between 2002 and 2004, the four vessels are each 45,000 dwt. In addition, Sumitomo chartered three additional vessels, one at 25,000 dwt and the other two at 34,000 dwt, also operated by Westwood.
Swire will make an upfront payment of $100 million for Westwood with an additional payment of up to $45 million after the 2022 fiscal year results are finalized for Westwood. The acquisition is subject to regulatory approval and they expect it will be completed by June 2022.