Users line up for new Port of L.A. foreign trade zone; new L.A. trade zone ranks as one of the nation's largest.

Nearly two dozen companies have expressed interest in using the Southland's new foreign trade zone, the Port of Los Angeles reported last week.

The federal government on July 15 designated the Port of L.A., parts of Los Angeles International Airport and a proposed trade and transportation center in Bakersfield as a foreign trade zone.

The Port of Long Beach also has such a zone, but it isn't located in the port itself. Rather, it is scattered, and includes warehouse and manufacturing facilities in Long Beach, Ontario and Santa Ana.

Altogether there are more than 200 foreign trade zones of different sizes in th nation. The one at the Port of L.A. is among the largest.

It is expected to stimulate more activity by bringing to the port some assembling of products that currently takes place overseas, sources said.

This increased activity means more local jobs.

Also, since importers can defer paying duties on goods that are in the zone, they will be encouraged to bring goods to the port, sources noted.

Zones are not considered part of the U.S. Customs District in which they are situated. They are locales into which importers can bring foreign goods duty-free, assemble them, alter them, or even let them sit, and only pay duties on them when they are shipped out to places elsewhere in the U.S.

If the completed products have a lower duty rate than the products' components, the importers would pay the lower duties, according to a statement by accountin firm Arthur Andersen & Co.

Even if the importers don't alter the cargo in some way, they could defer payin duties until they send the cargo out of the zone, another benefit.

And if the goods are eventually turned around and exported directly from the zone, the owner doesn't have to pay duties at all.

Since the zone brings significant benefits to those that operate in it, the one at the Port of L.A. is expected to generate hundreds of jobs within the next five years, according to a port statement.

At least 22 companies have expressed an interest in using the zone, according t a list compiled by the Port of L.A. Big-name companies include El Segundo-based toymaker Mattel Inc.; Fountain Valley-based Hyundai Motor America, a subsidiary of South Korea's Hyundai Motor Co.; Sumitomo Warehouse U.S.A. Inc., a Torrance-based subsidiary of Japan's Sumitomo Corp.; and Hitachi Transport System America Ltd., a Torrance-based subsidiary of Japan's Hitachi Ltd.

Two port tenants considering activating their parts of the zone so their customers can benefit are California Cartage Co., which ships and stores containerized cargo, and GATX Terminal Corp., a terminal operator.

Although the port has been designated as a foreign trade zone, tenants already within the port must apply to the L.A. Customs District to qualify -- or activate -- their facilities, said Karen Tozer, foreign trade zone marketing manager with the port.

Tenants must prepare a procedures manual and get their security, inventory and accounting procedures approved, among other things, to take advantage of the zone's duty-free status, she said.

If California Cartage activated its facilities, those who use its services coul import goods and avoid paying duties until after they assemble or change the goods in some way on California Cartage property and move them out of the zone, said Harry Wilkes, California Cartage's traffic manager.

LAXFuel, a consortium of commercial airlines that buys fuel for its member carriers, stores some of its fuel at the two GATX terminals in the Port of L.A. said Barbara Ohno, finance and administration manager for Chicago-based GATX Terminal Corp.

Currently, the consortium pays customs duties when it imports the fuel, and eventually recoups these duties after the fuel leaves the country. But getting back these duties requires a lot of paperwork and takes about a year and a half Ohno said.

If GATX participates in the foreign trade zone, LAXFuel can import the fuel, store it at the terminals, transport it to LAX via pipeline, and fly it out on international flights without paying any duties at all, she said.

The pipeline linking the terminal to LAX would have to be modified to become part of the zone, the port's Tozer said.

Importers of ships' bunker fuel which use the GATX terminals could similarly benefit, Ohno said.

As of now, these importers pay customs duties when they bring the fuel into por and recoup the duties after the fuel is loaded on ships bound overseas.

If GATX partakes of the foreign trade zone, these bunker fuel importers won't have to pay duties at all, Ohno said.