Wave of Imported Autos Has L.B., L.A. Ports Straining at Seams
Five years ago, Crown Auto Body, a small company that primps imported autos before they are dispatched to dealers, moved its headquarters from an abandoned bottling plant in Long Beach to Port of Los Angeles land here.
Although the 20-acre site was more than six times the size of its previous location, the company soon called on port officials for more land. Today, after a series of meetings, the company occupies 106 acres on the island for its operations and those of two spinoff companies.
Now they need even more land.
“The port has more or less told us to slow down,” said Mike Chevalier, general manager of Crown and a vice president of the other two companies. “But every time we turn around the distributors are bringing in more and more cars. The volume keeps going up continually.”
As the number of imported cars and trucks shipped through the Los Angeles and Long Beach ports has surged--making Los Angeles the No. 1 port of entry in the nation for auto imports, according to recent figures--so has business for Crown and the handful of other companies that prepare the vehicles before they are loaded onto railroad cars or truck trailers to be sent to showrooms across the country.
The increase in imported autos and the companies that process them has changed the port’s landscape. Gazing down from atop the Vincent Thomas Bridge, one sees what appear to be endless fields of BMWs, Jaguars, Alfa Romeos, Hyundais and a host of other foreign makes.
Ironically, the imported autos are stored on land adjacent to worn, empty buildings formerly used by the island’s once-thriving commercial fishing industry--an industry that has been hard hit by foreign competition. And a nearby landfill that had been previously earmarked for construction of offshore oil rigs--an industry also suffering from overseas competition--is being eyed by imported-auto processors eager to expand.
Imports Create Jobs
Along with the imports and servicing companies have come hundreds of new jobs and additional work for waterfront laborers who perform tasks ranging from polishing and painting the vehicles to fine-tuning them. Crown workers recently were installing everything from floor mats to spare tires to roll bars in Suzuki Samurais, the four-wheel-drive vehicles that the Japanese manufacturer recently introduced in California.
Both ports are earning millions of dollars in new revenue from fees imposed on shippers, distributors and processors.
In addition, the Port of Los Angeles estimates that for every imported vehicle that comes into San Pedro Bay, $200 is pumped into the Southern California economy from items as diverse as the car salesman’s commission to the expensive stereo systems some consumers install in the vehicles.
“The ripple effects are so great,” said Travis Montgomery, the Port of Long Beach’s director of trade development. “You have the longshoremen who take (the cars) off the ships, you have the workers who actually prepare the vehicles, you have the truckers who take them to the dealers. We’re talking about significant numbers when you add it all up.”
Imported vehicles, of course, have been shipped through the ports for years, but during the past two or three years, their numbers have dramatically increased. Last fall, Ward’s Automotive Reports, an auto industry trade journal, reported that 153,885 vehicles passed through the Port of Los Angeles in the first five months of 1985, making it the nation’s leading port of entry for imported automobiles. A large part of the volume resulted from General Motors’ decision to ship Sprints and Spectrums--Japanese imports made by Suzuki and Isuzu--through the port.
A Ward’s spokeswoman said the figures, released last September, have not been updated.
River of Toyotas
At the Port of Long Beach, where a 130-acre auto terminal facility was developed three years ago to house the operations of Toyota and the PASHA Group, an independent vehicle processing firm, officials say 344,407 vehicles were handled during the fiscal year that ended last June. That translated into $5.8 million in revenue for the port. Revenue this fiscal year from imported vehicle operations is expected to come close to $8 million.
At the Port of Los Angeles, where a lump-sum revenue figure for imported auto operations is not computed, officials say the port expects to earn $3.6 million from its auto tariff alone this fiscal year--a 67.8% increase from last year. Some of the increase is expected because the port raised the tariff from $12 to $18 per car last July. In addition, officials predict that 480,000 automobiles will pass through the port this fiscal year--a 19% increase from last year.
The amount the port earns through the tariff does not reflect a variety of other fees it collects, officials say. For example, ships of the eight companies that transport cars into the Port of Los Angeles are steered into the harbor by the port’s own pilots. Depending on the length of the ship, the typical fee is $600 for each trip in or out of the harbor. Additionally, the port collects dockage fees of about $1,600 a day. Some ships carrying autos dock for two or three days at a time.
Dock Storage Fees
The port also earns money through dock storage fees and through the various leases it holds with terminal operators, distributors and four processors. Since 1983, the port has more than doubled the amount of land it leases to firms involved in auto imports to 355 acres, or 12.7% of the port’s total waterfront acreage, according to port spokeswoman Julia Nagano.
Just how many people are employed at the ports as a result of the growth in imported vehicles coming through local waters is difficult to determine. Steve Resnick, the Port of Los Angeles’ marketing director, characterizes the import operations as one of the most labor-intensive industries in the harbor, and cites the large number of longshoremen required to unload the massive ships capable of carrying 2,000 or more vehicles. Longshoremen who drive cars off the ships earn $19.32 an hour.
Crown, where many employees are Teamsters and earn about $11 an hour, has 150 full-time workers on the payroll, up from about 30 four years ago, Chevalier said. The two spinoff companies founded by Crown executives to handle Hyundai and General Motors imports employ another 120 people. Those figures do not include part-time employees hired during peak periods.
At Long Beach, Toyota spokeswoman Debra Sanchez said 225 employees are working at the company’s processing plant, where the annual payroll is $6.6 million. Last year, about 210,000 vehicles went through the plant.
Those workers are in addition to those the company employs at its truck bed manufacturing plant. The plant, where unfinished truck chassis shipped from overseas are completed, is in a federally sanctioned foreign trade zone. Such a zone allows the company to either avoid or delay paying duties on a vehicle, depending on whether it is sold in this country or not.
Struggle to Meet Demands
The Port of Long Beach’s Montgomery said that the port sometimes has to struggle to meet the space demands of auto processors. For example, Jim Lyon, PASHA’s operations manager, said that about five months ago, the company had to temporarily store 2,000 Hondas on land where a container cargo terminal was under construction. “Normally it is a constant turnover in vehicles, but every once in a while there is a hitch in the process,” Lyon said.
Nevertheless, Montgomery said Long Beach does not expect tremendous growth in import auto operations. “With the self-imposed quotas the Japanese manufacturers have set, we’re not looking for an astronomical increase.”
At the Port of Los Angeles, which has had to turn down potential processors because of a lack of available land, officials are bullish on the future of auto imports. The port has enjoyed an advantage over Long Beach in accommodating vehicle processors because it had vacant land on Terminal Island. The port also recently constructed its own vehicle receiving center to alleviate congestion on the docks.
Resnick said the port plans to continue to develop on the island “less than desirable” land away from docks to accommodate processors and coordinate their activities. At present, the port is constructing one new auto terminal and expanding another.
Despite the waiting list--at least four firms have requested space at the port and have been turned down--Resnick said the port is aggressively seeking new customers, and expects eventually to see 600,000 vehicles annually pass over its docks. The port’s New York office has already contacted Yugo America Inc. about the possibility of importing its subcompact through the port. The Yugoslavian car is now imported through the ports of Baltimore and Houston.
“We have made it one of the port’s strategic goals to maintain itself as the No. 1 import vehicle place in the United States,” Resnick said.
