Image Woes Shrink Traffic at Port

Five years after reestablishing itself as the nation’s busiest international trade gateway, the Port of Los Angeles seems to have run aground.

At major ports in North America, booming Asian trade is producing record cargo traffic -- increases of 12% to more than 35% -- and the revenue and jobs that go with it.

But business is sinking at L.A.’s port, down nearly 2% this year, because of a serious image problem created partly by last year’s record congestion, which also affected the Long Beach port, and the 2002 labor dispute that shut down West Coast harbors for 11 days.

In addition, the Los Angeles port faces a litany of other problems, observers say. These include internal disarray, unhappy neighbors and delays in dredging and wharf construction projects to accommodate giant containerships that currently go to Long Beach, where cargo volume is nearly 16% ahead of last year’s record pace.

Combined, the result has been “a major structural shift in trade patterns,” said John Martin, president of Martin Associates, a maritime consulting firm in Lancaster, Pa. “And there does not appear to be a lot of support from the city for the Port of Los Angeles. That is bad.”

Los Angeles is at a crossroads, shifting leadership from former Mayor James K. Hahn, who had said the port needed to be a cleaner and better neighbor, to Antonio Villaraigosa, whose agenda has yet to be unveiled. The port’s five-year strategic plan is being overhauled, even as it tries to regain its footing.

Bruce E. Seaton, who became the Los Angeles port’s acting executive director last year after previous director Larry Keller was forced out, acknowledged the rough waters.

“We are obviously trying to convince customers to come back,” Seaton said. “Customers are looking for reliability, and they don’t want to see another meltdown.”

Much is at stake, port boosters say. The Southern California port complex, the nation’s largest, is an economic growth machine that generates billions of dollars in lease and tax revenue each year and directly or indirectly supports 407,000 jobs, according to the Los Angeles County Economic Development Corp.

The local ports are a rare source of high-paying blue-collar work, with the average wage on the docks and in the logistics and distribution industry topping $40,000 a year. A crane operator can earn more than $100,000 annually.

It is the “one blue-collar sector for which Southern California has a clear-cut competitive advantage vis-a-vis the rest of the United States,” said John Husing, an Inland Empire economist specializing in trade issues. “The jobs processing this cargo are ours ... if we can accommodate the rising volume of trade.”

It’s been more than a decade since the Los Angeles port experienced a drop in cargo volume.

During the 1990s, Southern California’s ports benefited from a consolidation of the international shipping and U.S. retail industries, said Martin, the maritime consultant. There was agreement that the best way to ship Asian goods to the U.S. was through the twin ports and then by truck or rail to the Midwest, the South and the East, he said.

In 2004, an unexpected flood of goods -- mostly from China -- caught the ports unprepared. There weren’t enough dockworkers to load and unload ships, which piled up more than 90 deep and were forced to wait as long as a week to disgorge their containers.

Cargo terminals and railroads also were overwhelmed. Ships were diverted to other ports, which were happy to get the business.

The local ports responded by hiring thousands of workers, and railroads added new equipment. And the ports’ terminals, which are run independently, recently began operating longer hours.

But critics say the Los Angeles port has other difficulties.

It lacks a firm sense of direction, they say, in contrast to the 1990s, when the port trailed neighbor Long Beach and knew what it wanted to be: the busiest in the nation.

Los Angeles grabbed the top spot in 2000 and cemented it the following year when it lured Long Beach’s biggest tenant, Maersk Sealand, to move onto a man-made island built out of the mud in the middle of San Pedro Bay.

That focus changed during Hahn’s tenure as mayor. The San Pedro resident introduced a number of environmental initiatives, launched a multimillion-dollar waterfront development and openly advocated better relations with surrounding communities, which objected to the port’s pollution and traffic. However, detractors say crucial construction projects have fallen behind schedule and the port has struggled with staff turnover.

Hahn said the port needed to strive for balance between growth and peaceful coexistence with its neighbors.

“The port may have flattened out in terms of growth, but I don’t know that that’s a bad thing,” Hahn said recently. “I’m very proud of what we were able to do there.”

Seaton said the port was working to put a new image before shipping lines, manufacturers, retailers and logistics experts who advise clients on how best to ship their goods.

“Last fall, they saw all of those ships at anchor,” Seaton said. “You look out there right now and the ships have all of the gangs they need and are [unloaded] as quickly as they need to be.”

Despite improvements at the local ports, big developments and double-digit traffic increases are being trumpeted by competing harbors.

“The cargo is on ships, and they can go anywhere,” Seaton said. “What I am hearing on the street is that [shipping lines] are looking for diversification” -- that is, sending goods to a variety of seaports instead of concentrating business in Southern California.

Bratz doll maker Isaac Larian is among them. Larian, chief executive of MGA Entertainment Inc., said the Van Nuys company was bringing less merchandise through Los Angeles, preferring the less congested ports of Oakland and Seattle.

“In 2005, we have huge orders from our customers and we need to be able to fill them,” Larian said. “I don’t have faith, frankly, that L.A. can handle it. We need to see action. We need to see that the bureaucracy and the politics are not there. We need to see that things have changed.”

The Port Authority of New York and New Jersey, No. 3 in the nation, is running 14% ahead of 2004’s pace. It has become a symbol of the shift of Asian trade to the East Coast via all-water routes through the Panama and Suez canals. Shipping lines added five such routes to the port in 2004, bringing the total to 24, according to spokesman Steve Coleman. He said that Asia trade now accounts for more than 43% of Port Authority business.

Fifth-ranked Port Charleston in South Carolina, up more than 14% for the year, now gets more trade from India, China and the rest of Asia than it does from Latin America, according to spokesman Byron Miller. India trade alone is up 60% since 2004, mostly in the form of furniture imports, Miller said.

The inbound container cargo boom is even more striking at other ports, such as eighth-ranked Seattle (up more than 35% over 2004’s record pace), fourth-place Oakland (up 30%), and seventh-ranked Tacoma in Washington state (up more than 25%).

“We have recognized the tremendous potential for growth, and we are committed to positioning the port to take advantage of that,” said John Wolf, deputy executive director of the port of Tacoma. His harbor will welcome new or expanded business from container shipping lines Evergreen Marine Corp. and Yang Ming Group of Taiwan and Tokyo-based “K” Line Group this year.

Then there’s Dames Point, near Jacksonville, Fla., North America’s 18th-busiest port, which was so named in the late 1800s because wives waited there for the ships carrying their husbands to return from the sea. This summer, Mitsui O.S.K. Lines of Tokyo broke ground at Dames Point for its first East Coast container terminal, which will focus in part on all-water Asian trade.

“Many of our customers were concerned about congestion on the West Coast,” said John Gurrad, the shipping line’s U.S. vice president for business planning. “We felt it was important to have our own terminal on the East Coast.”