Port of Long Beach swells shipping business by 15%.

It leaves L.A. port in its wake, with tonnage drop

The Port of Long Beach reported last week a whopping 26-percent surge in container traffic and 15-percent increase in overall tonnage handled in the fiscal year ended June 30, compared with the prior fiscal year.

The growth was mostly a result of shippers increasing their service to and from China, the port's fastest-growing trading partner during that period, said Don Wylie, the port's director of trade and maritime services.

Also last week, the neighboring Port of Los Angeles reported its container traffic grew by only 2.9 percent during the same fiscal year and overall tonnage handled actually fell 5.3 percent, compared with the prior year.

A 1993 state tax on bunker fuel used to run ships more than halved the number of ships refueling at the Port of L.A., which had been a major refueling port, said Al Fierstine, the port's director of marketing. Bunker fuel is counted as part of overall tonnage handled by the port, and this decline is the primary reason for the tonnage decrease, Fierstine said.

The Legislature repealed the tax late last year, but by then the ships were scared away permanently, Fierstine said.

As for the lackluster rise in the L.A. port's container business, Fierstine noted that, although the Port of L.A. has extensive trading volume with China, it doesn't enjoy the Port of Long Beach's account with the major Chinese national shipping line Cosco Agencies Inc.

But, Long Beach's Wylie said, the Cosco tie is not the only reason business boomed at that port. Rather, in general, "carriers in Long Beach have focused more toward China than did those in the Port of L.A.," he said.

Container traffic is measured by the number of 20-foot-long metal containers that pass through a port. Those containers are used to store many products during shipment. Container cargo accounts for about half of the overall tonnage at both ports, officials said.

Tonnage figures refer to the amount of petroleum products, bulk products (such as coal or petroleum coke), and breakbulk (such as steel and lumber) that comes through the port.

During the past fiscal year, 2.34 million containers passed through the Port of Long Beach, compared with 1.86 million a year earlier, according to a port statement.

The Port of L.A., meanwhile, reported that 2.38 million containers passed through its facilities during fiscal 1993-94, compared with 2.31 million during the prior fiscal year.

At the Port of Long Beach, the majority of containers handled were in-coming imported goods. Specifically, the port handled 1.2 million inbound containers vs. 722,000 outbound, according to the statement. The remaining containers were empty, said port Marketing Manager Hal Hilliard, who said he did not have a similar import/export breakdown for tonnage figures.

At the Port of L.A., about 60 percent of cargo handled, both in containers and in bulk tonnage, was imported and 40 percent was exported, Fierstine said.

The Port of Long Beach once again out-did its neighboring competitor in overall tonnage. A total of 83.3 million tons passed through the Port of Long Beach during fiscal 1993-94, compared with L.A.'s 65 million tons. These figures compare with 72.4 million tons and 68.7 million tons, respectively, a year earlier.

Shippers at the Port of Long Beach are focusing more on China because labor there is cheaper than it is in Taiwan and Hong Kong, Wylie said. Thus, factories in Taiwan and Hong Kong are shifting operations to China and adding to operations already there. That China buildup is leading to a surge in China-U.S. trading activity as U.S. customers buy goods from those factories, Wylie said.

Madison, N.J.-based Maersk Inc. and Newport Beach-based "K" Line America Inc., two shippers that call at the Port of Long Beach, each created in 1993 a service in Southeast Asia that calls in Hong Kong and then travels to the Port of Long Beach, Wylie said. Cargo delivered to Long Beach by those two new services is not officially designated as coming from China, but up to 85 percent of the trade that comes out of Hong Kong originated in China, he said. So actually, the volume of trade being conducted with China is growing even more dramatically than the official port numbers indicate.

Maersk announced last week it would begin Aug. 6 direct service between Long Beach and Southern China, according to the Journal of Commerce. This would be the first direct service from China to California.

Korea-based Hanjin Shipping Co. Ltd., another Port of Long Beach tenant, started in March an indirect service to Northern China. Ships first call on the ports there and then stop in Pusan, Korea, where they discharge the containers they had loaded in China, Wylie said. The containers are transferred to another ship bound this time for Long Beach, he said.

Hanjin has also increased its overall capacity to serve Long Beach from the Far East in general, Wylie said.

Cosco and Gardena-based Hyundai Merchant Marine America Inc., another shipper, have also both increased their capacities to serve Long Beach from the Far East, including China, he said. Hyundai Merchant Marine is a subsidiary of the Korean conglomerate Hyundai Group, which also makes cars.

Wylie noted that, although China is the port's fastest growing trading partner, Japan is still the port's largest. Hong Kong is second, Korea is third and China is fourth. Japan also remains the Port of L.A.'s largest trading partner, Fierstine said.

At the Port of L.A., shippers are currently beefing up their services to Latin America, Fierstine added. The resulting growth in container traffic should be reflected in fiscal 1994-95 figures, he said.

Shippers at the Port of Long Beach are not focusing as much on Latin American trade, Wylie said.

Fierstine added that the shippers decide when and where they want to expand services, not the ports.