Hueneme Seeking Bigger Slice of Pacific Rim Trade

Port Hueneme, the only deep-water port between Los Angeles and San Francisco, has begun a $26-million expansion designed to double its business by 1990 and triple it by 2010.

In the last year, the port has also lured two prestigious customers, Mercedes-Benz of North America and BMW of North America, from the Port of Los Angeles, 65 miles to the south.

The new business will make millions of dollars and create jobs for Ventura County, according to local elected officials and business groups.

Los Angeles and Long Beach port officials say they won’t lose sleep over the move by Port Hueneme, which is 50 years old this month, to take a bigger bite of the growing Pacific Rim trade. Together the Los Angeles County ports comprise one of the largest and most profitable import-and-export facilities in the world--last year moving about 115 million metric tons of goods worth nearly $60 billion.

Port Hueneme’s business amounts to 500,000 metric tons a year, and its goal is 1.5 million tons by 2010.

“Their available facilities are insufficient to do us any serious damage,” James McJunket, Port of Long Beach executive director, said of the Ventura County port. “Still, no one wants to lose a good account.”

Ventura officials also acknowledge that for the port to reach its potential, additional tens of millions of dollars in state and federal money will be required to improve roads linking Port Hueneme with the Ventura Freeway, officials say.

The largest obstacle to growth is the limited availability of land at the commercial port facility, which covers 60.8 acres. The remaining 1,600 acres of Port Hueneme is owned and operated by the Navy. By comparison, the Port of Los Angeles has about 7,500 acres of land and water.

Although Port Hueneme does not have enough land to load and unload large container shipments--which make up the biggest share of business at the Los Angeles and Long Beach ports--it has become attractive to customers shipping bulk cargo such as cars, bananas, citrus, offshore oil supplies and lumber.

Mercedes and BMW together will ship about 45,000 cars annually through Port Hueneme by 1989, company officials said. Mazda Motors of America ships about 100,000 cars a year through the port. The port of Los Angeles received 524,000 imported cars in the year ending June 30, officials there said.

The Dole Fresh Fruit Co., the country’s largest importer of bananas, is typical of the kind of firm interested in moving to Port Hueneme, port officials say.

“We are now considered a small operator in scope of Los Angeles and Long Beach,” John Musser, the firm’s vice president of operations, said. “When you are dealing with a smaller port, you become a relatively big customer, and as a practical matter, as far as service, it is better to be a big fish in a small pond.”

Dole, which imports about 20 million bananas a week through the Port of Long Beach, is negotiating with Port Hueneme officials about moving its operation, Musser said.

Banana Processing Center

As an enticement to move from Long Beach, where Dole has done business for 20 years, Port Hueneme officials have offered to design and build a $2-million, state-of-the-art banana shipment-processing center on nine acres. Dole officials are considering the offer, Musser said.

Port Hueneme Executive Director Anthony J. Taormina, who took over management of the port in 1984, said he is in no rush for a decision from Dole. These deals take time, as well as patience, he said.

Mercedes and BMW each bought about 20 acres in nearby Oxnard to build facilities to inspect and test cars that are unloaded at the port. Each firm was assisted by port and city officials to find the properties and secure city permits.

“The Mercedes deal took about two years from the time they approached us to the day we shook hands,” said Taormina, who also negotiated the BMW agreement. “We’ve been working on Dole for about a year, so I figure we’re about halfway there.”

Meanwhile, elected officials and business groups, working with the Southern California Assn. of Governments, also known as SCAG, have completed a preliminary study on improving roads between Port Hueneme and the Ventura Freeway.

Complaints About Traffic

Most of the goods shipped in and out of the port are transported by trucks passing through the cities of Port Hueneme and Oxnard. Residents along the truck routes have long complained about the traffic.

In a report scheduled for release later this month, officials involved in the study will recommend that a new portion of U.S. 1, some of it freeway, be built between Hueneme Road and the Ventura Freeway along what is now Rice Avenue. The proposed route, through primarily agricultural and industrially zoned areas of the Oxnard Plain, would take most of the truck traffic off city streets, according to the report.

“We’re now trying to find out how much these improvements would cost and where the money will come from,” said Gill Hicks, a SCAG planner who prepared the report after several months of meetings with a committee of local, county and state officials.

Federal Funds Available

Federal highway funds are available for road improvements near ports that are needed to stimulate economic development and improve the movement of trade goods, Hicks said. The ports of Los Angeles and Long Beach this year were awarded $59 million under that federal program, he said.

More than half the truck traffic to and from the Port of Hueneme originates from its largest landowner, the Navy, which operates the U.S. Naval Construction Battalion Center there.

“We are the home port of the Seabees on the West Coast,” said Capt. Brian O’Connell, commanding officer of the Navy operation at Port Hueneme.

Besides being home for the Navy’s famed engineering and building crews, Port Hueneme also docks the Navy’s antique World War II vessels used as targets for the Pacific Missile Test Center at Point Mugu. About 11,000 Navy people and their dependents live and work at Port Hueneme, O’Connell said.

Navy Acquires Land

The Navy bought 330 acres of Port Hueneme from the Oxnard Harbor District, which still owns the commercial port there, for $2.2 million in 1942 during World War II, O’Connell said. The original port was built by the district in 1937.

The Navy has over the years sold back small portions of the port, but O’Connell said he cannot foresee more property being sold to the Oxnard Harbor District for commercial port use.

“During World War II, Korea and Vietnam this base doubled and tripled its storage of supplies, building materials and personnel,” O’Connell said. “We could face that prospect again, and that is what this base is here for.”

The Navy has been adamant about retaining its Port Hueneme property. It took strong lobbying from county officials, Sens. Pete Wilson (R-Calif.) and Alan Cranston (D-Calif.) and former U.S. Rep. Bobbi Fiedler, to force the sale of 18 acres of surplus land to the commercial port district in 1983, officials said.

Act of Congress Needed

“While it does take an act of Congress for the Department of Defense to transfer any real estate, it really took a great deal of work to get the Navy to go along with the sale,” recalled Linda Royster, Wilson’s deputy press secretary. “There were a number of concerns that the Navy had, but it came down to the money.”

The Navy leases about 75 acres of its property to Mazda Motors of America to store cars before they are shipped to dealers. The money from that and from several smaller leases to commercial port users is used by the Navy to pay for maintenance and other expenses, port officials said.

Portions of the 18 acres purchased from the Navy will be used to construct Port Hueneme’s Wharf 2, as well as storage and cargo-handling facilities that are part of its expansion plans. Construction of those facilities is expected to begin later this year, officials said.

Bonds Issued in ’85

The Oxnard Harbor District issued $18 million in bonds in 1985 to pay for the port expansion. Annual payments on that debt come from profits earned at the port, which totaled about $2 million during the 1986-87 fiscal year, officials said.

Profits at Port Hueneme and other harbors doing business with Pacific Rim countries are almost certain to grow in the foreseeable future, said Duane Paul, Bank of America senior economist and vice president of Far East trade operations.

“Trade in Southern California ports has grown more rapidly than all other port complexes in the United States,” Paul said. Total trade volume in the Southern California port region, which includes Port Hueneme, has grown at an average annual rate of 18% in the last 27 years, he said.

Port Expansion Urged

“Ports should be expanding their facilities now because business is going to increase over time,” Paul said.

That kind of optimism has spawned even greater hopes for Port Hueneme among members of the World Trade Center Assn. in Oxnard. The association, one of 146 worldwide, is part of a trade group that keeps track by computer of products available for export, said local association president and Oxnard Mayor Nao Takasugi.

Takasugi said the group, formed last year, hopes to expand its membership to include all Ventura County producers and manufacturers interested in exporting products abroad. Currently, imports at Port Hueneme, as at most West Coast ports, are a little more than twice exports.

“The intent is to eventually have a free-standing building that would include users such as international bankers, freight forwarders, the U.S. Department of Commerce (and) space for seminars on international trade,” said Nancy Morris, executive director of the Ventura County Economic Development Assn., a local business organization active in the trade center association.

Growth Must Come First

Before that happens, the port will have to reach the growth predicted in its current expansion project, said Peter Tam, vice president of trade finance for Ventura County’s Bank of A. Levy. “The service people, the freight forwarders and customs brokers, will not be there until the business is there,” he said.

Angela Soo Hoo, co-owner of Soo Hoo Customs Broker, has the only customs brokerage and freight-forwarding business at Port Hueneme. She and her husband, William, the former Oxnard mayor, do a good business handling federal paper work necessary to move goods in and out of the country, Soo Hoo said.

The couple compete with large Los Angeles customs houses in much the same way the Port of Hueneme competes with its large port rivals. “We are smaller, more economical and give better service,” Soo Hoo said.