Chinese shipping firm's U.S. job-creation story

It is a windy day with rain showers. The Port of Boston is busy as usual, with towering cranes plucking containers from a giant vessel.

But over a decade ago, the port was confronted with a crisis of existence, with thousands of jobs at risk. Things took a turn when a Chinese shipping company came to the rescue.

China Ocean Shipping (Group) Company (COSCO), a Beijing-based shipping firm headquartered about 10,000 km away from Boston, "helped the city's languishing port become thriving again," recalled Gene Hartigan, a 62-year-old Bostonian native and father of two daughters.

Hartigan served as an adviser to the Chinese largest shipping firm over the past ten years and witnessed COSCO's operation at the port, which brought well-paid jobs to Boston, U.S. state of Massachusetts for dock workers and others who had kids to support and mortgages to pay.

In recognition of the Chinese firm's contribution to the local economy, the International Longshoremen's Association (ILA), the leading union of maritime workers in North America, in March awarded Chinese Premier Wen Jiabao "Best Friend of the American Worker" at an event to mark the 10th anniversary of the partnership between the U.S. port and COSCO.

TIMELY RESCUE

At the turn of this century, the Port of Boston, the oldest continually active major port in the Western Hemisphere, was on the verge of closure, and thousands of jobs supported by the port's operation were at stake.

In 2000, the Port of Boston's container cargo business was at a "low point" in its history after Danish shipping titan Maersk Line and its partners closed their lines to the port, said David Mackey, CEO of the Massachusetts Port Authority (Massport).

Massport owns and operates the public terminals in the Port of Boston and Boston Logan International Airport, along with other aviation facilities and commercial real estate.

The situation got even worse after the terrorist attacks on Sept. 11, 2001 dealt a heavy blow to the U.S. economy and particularly the transportation sector.

It had been a difficult time for Massport and the port, before the win-win collaboration with COSCO was inked, Mackey said.

The Chinese shipping firm started its direct cargo route to Boston on March 21, 2002, six months after the Sept. 11 attacks. Today, the Port of Boston remains a vital transportation and economic resource for New England since Boston's founding in 1630.

When Wei Jiafu, COSCO's Chairman, came to Boston in March 2002, "it was a real high point of our history," Mackey noted.

The arrival of Chinese shipping company helped preserve and create thousands of jobs over the last decade. The port's overall activity currently supports 34,000 jobs and contributes more than 2 billion U.S. dollars annually to the local, regional and national economies, said Deborah Hadden, Massport's Current Port Director.

Volume on the COSCO service has surged from 40 ship visits and 23,401 TEUs (17,000 containers) in 2002 to 76 ship visits and 122,882 TEUs (70,000 containers) in 2011, according to Hadden.

The total cargo volume of COSCO and its partners now account for about half of the annual cargo volume at the Conley Container Terminal of Port of Boston, the New England's maritime hub.

Boston, the largest city in New England, has outperformed many other U.S. cities in job creation. The unemployment rate in Boston metropolitan area stood at 5.9 percent in August 2012, lower than the national average level of 8.1 percent in the month, figures from the U.S. Labor Department revealed.

"It was a strong commitment made then by our company. COSCO might suffer some immediate-term economic losses, but the company could get many long-term gains. It's beneficial to both sides," said Liu Hanbo, president of COSCO Americas, Inc, and a veteran seaman.

CULTURE BLENDING

COSCO's direct service from Asia to the Port of Boston was a prime example of experiment in business and mutual understanding. In the past three decades, COSCO Americas, incorporated in 1982, has established a modern logistics service network covering the American continent with 25 weekly liner services connecting the Americas with other parts of the world.

In Hartigan's perspective, COSCO and Boston are like family members, as the Chinese shipping firm, business and the Port of Boston have forged three-way friendship.

"Not only did COSCO save jobs that are going to be lost in Boston, but COSCO created jobs in Secaucus and other cities. More important, people in Boston and other U.S. cities got the chance to learn more about China. It was the beginning of a great experiment," Hartigan said. "What began as an experiment in ocean shipping at the Port of Boston has become a model for partnership."

Sipping Chinese green tea in his office on the third floor of the office building of COSCO Americas, Inc. located in Secaucus, New Jersey, Howard Finkel felt proud of his current job, as his Chinese employer is the fastest expanding shipping firm in the industry.

Finkel, executive vice president of COSCO Container Lines Americas, a branch of the shipping firm's burgeoning operations, has witnessed stories of COSCO's job creation and culture blending in the nation during his 17-year service at the firm.

"We get a lot from the Chinese culture, and they get a lot from the American culture," said Finkel, who has worked for 22 years in the shipping industry.

To Finkel and other 200 U.S. employees of COSCO Americas, Inc. working in the building, both Christmas and Chinese traditional festivals like the lunar new year and the Mid-Autumn Day are their holidays. U.S. employees like Jamie Fienan enjoyed the culture diversity of the firm as she can choose either wonton or bacon for breakfast at the canteen.

"The company tries to mesh Chinese and U.S. cultures. They understand your needs," said Fienan, who was born in Hudson Country, New Jersey, and works in the vicinity of her home. The flexible working schedule of the firm gives the 45-year-old mother possibility to balance work and personal life.

The company has a "family-oriented" culture and gives generous benefits and perks to employees, said Fienan, deputy general manager for pricing and marketing of COSCO Container Lines Americas.

"In the process of the expansion of COSCO Americas' employees from two in 1982 to more than 800 currently, we deemed employees as our family members," said Liu, chief of COSCO Americas, adding that more than 90 percent of his employees were locals.

CHINA'S CONTRIBUTION UNDERESTIMATED

COSCO's story in Boston was emblematic of deepening economic ties between China and the United States.

Trade between the world's largest two economies witnessed robust growth over the past three decades, surging from less than 2.5 billion U.S. dollars shortly after diplomatic ties were established to 446.7 billion U.S. dollars in 2011, Chinese governmental figures showed.

Along with its strategic partners K-Line, Yang Ming Marine Transport and Hanjin Shipping, COSCO nowadays deploys a weekly vessel shipping furniture, apparel and footwear and other goods from the Far East to Boston, and shipping agricultural products and other goods back to Asia.

However, the arrival of new player is not always welcomed. Rising influx of Chinese investment is sometimes greeted with suspicion and even hostility in the United States, especially in the presidential election year.

"At a time when everyone is critical about China and fearing China would be the giant in the room, COSCO has proven what Americans have is a friend and partner who helped save the city and port traffic," said Hartigan, also co-chairman of the U.S.-China Partnership Committee, a U.S. national organization of government, business, education, media, and labor leaders dedicated to bilateral collaboration.

Fred Bergsten, director of the Washington-based Peterson Institute for International Economics, contended that China's contribution to the global recovery and job creation was "probably not fully appreciated" in the United States.

Emerging economies, led by China and India, were the main driver of the global economy and would continue to expand at a slower but relatively high pace for the foreseeable future, which would keep the global economy including the United States churning for some time, said Bergsten, who advocated the notion of a G2 world under the leadership of the United States and China.

Bergsten has been trying to inform the U.S. public how important Chinese economy has meant to the world economy as a whole and for the United States.

"I would prefer a more effective process of consultation and collaboration to deal with bilateral economic and trade conflicts," he said.