Port of Orange County : First-Ever Detailed Examination of Scope and Tonnage of the Cargo Moved by Local Importers and Exporters Offers Overview of Foreign Trade and Impact on Economy
Cotton isn’t grown in Orange County, but about 2,000 metric tons of the fluffy white stuff--packed in bulging, 600-pound burlap-wrapped bales--was shipped overseas last year by a Santa Ana exporter from the ports of Los Angeles and Long Beach.
The cotton shipped by R.W. Zebrowski Inc. came mostly from mills in central California, Texas and Oklahoma--the nation’s major cotton-growing regions.
But like most export brokers, Zebrowski does business all over the world, buying products at the source and having them moved by truck or train to the most convenient seaport for shipment to buyers overseas.
When a seller is in Orange County and its buyer is in Japan, China or anywhere along the Pacific Rim, it likely means the goods will travel through the Long Beach or Los Angeles ports.
In the past, the size of the county’s export-import business has been a matter of educated guesswork by local economists. But trade analysts at the ports of Long Beach and Los Angeles recently prepared for the Times Orange County Edition a first-ever look at the scope of the cargo that exporters and importers load each year onto the decks of the S.S. Orange County.
The analysts’ numbers for the first half of 1994 show a nearly 8% increase in ocean cargo exports by Orange County-based shippers as well as a 15% hike in imports being sent to Orange County companies. That could add 2,000 more jobs to local payrolls and boost the economy by about $500 million, said Esmael Adibi, director of the Chapman University Center for Economic Research.
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Examining the county’s entire volume of exports and imports is clouded by the lack of information about goods shipped by air and truck--the shipments are not tracked by city or county of origin, as are goods moved by ship. But the U.S. Customs Bureau estimates that 75% of all export and import goods--by weight--comes through the nation’s seaports, so a review of Orange County’s use of the ports of Los Angeles and Long Beach is indicative of the county’s foreign trade.
Orange County’s own harbors are given over to a military base and several marinas, but having two of the nation’s largest commercial seaports less than 30 miles away has helped bring a large and growing number of export-import companies here: companies like 19-year-old R.W. Zebrowski and the recently opened national headquarters of Japanese electronics giant Hitachi Corp.’s U.S. transportation and distribution subsidiary.
“Orange County is a major distribution center for importers and exporters alike, and it is because the county is near the two ports,” said Adibi, an economics professor at the private university in Orange.
The adjacent ports, which stretch in an arc from Long Beach to San Pedro, handle the majority of Orange County’s export and import goods. Ocean transport is far less expensive than air freight and many products are too bulky to go any other way: cars, business machinery, heavy construction equipment and scrap steel and paper are among Orange County’s leading exports.
A recent export shipment by Fluidmaster Inc., the Anaheim plumbing repair parts maker, illustrates the case for ocean cargo when time is not a factor.
“We just pulled a 20-foot container off the dock and sent it by air instead, at the customer’s request,” said Fluidmaster’s international trade director, Tricia Murdock.
The Australian customer wanted the material sooner than the five weeks it would have taken to get it there by freighter. By air, it took four days from the time the container left Anaheim until it cleared customs in Australia.
But the customer paid dearly. The approximately four-ton shipment would have cost $3,500 to send by sea. The air freight bill was $15,007, Murdock said.
Anil Puri, Cal State Fullerton’s dean of economics, said the business of exporting represents 9.6% of Orange County’s gross annual production and is responsible for about 10% of the jobs in the county. For 1994, that would equal $7 billion and 112,000 jobs.
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There are two principal reasons for the increase, economists and trade specialists say.
Because of its location, Orange County is a principal distribution point for goods being shipped out and brought in by companies throughout the nation, and the U.S. import-export industry has grown as most states participate in a mild recovery from the recession that began in 1990.
More important, said export consultant Marilyn Loewy, Orange County businesses have become more aggressive in their overseas marketing to make up for domestic sales lost in the recession.
In 1993, companies in Orange County shipped almost 400,000 metric tons of goods from the two ports and imported about 500,000 tons.
That places the county just slightly above the midway mark in a list of 18 regions that use the two ports: at just under 2% of the total tonnage shipped through the ports, Orange County’s businesses are a bigger user than all of the companies in Mexico or Washington state, for instance. But local firms ship fewer goods through the Los Angeles and Long Beach ports than the combined businesses of the nine New England and Mid-Atlantic states, which use the two ports as their outlets to the Pacific.
The bulkiest and heaviest cargoes shipped by Orange County businesses are scrap-paper and metal--destined for recyclers in Japan, Korea, Taiwan and China. Last year, brokers such as Global Fibers in La Palma and Yao Yang Enterprises in Los Alamitos shipped nearly 175,000 metric tons of paper to customers in Asia. In the first half of 1994, an additional 122,000 metric tons were shipped.
(Shipments are weighed in metric tons--2,204.6 pounds versus 2,000 pounds for a standard U.S. ton--because most of the world uses the metric system.)
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Like Zebrowski’s cotton, most of the paper and a lot of the produce, scrap metal and consumer goods shipped by Orange County companies originated in other parts of California or in other states and was transported directly to the ports without ever entering Orange County. It is credited to the county as an export because that’s where the shipper is based.
Chemicals are the second largest of the county’s export cargoes by weight--more than 100,000 metric tons in the 18 months ended June 30. In third place is fresh fruit--45,000 metric tons.
Export cargo tonnage drops rapidly after that, though in many cases the value of the cargoes--everything from hides and fabrics to resins and auto parts--goes way up: the 5,245 tons of electronic machinery, scientific instruments and other electronic equipment shipped to foreign buyers by Orange County companies in 1993 and the first half of 1994 had a cumulative worth well in excess of the value of the 175,000 tons of paper, trade analysts said. So did the 3,000 tons of computers and other office equipment. The value of specific cargoes is not released for competitive reasons.
But the trade office of the Port of Los Angeles, which has handled about 45% of the tonnage shipped in and out of Orange County in the last six months, said the value of all exports from Orange County-based businesses from January through June was $3.7 billion while the value of imports destined for companies in the county was $2.9 billion--an aggregate of $6.6 billion for one port for half a year.
At first glance, the list of Orange County’s exports and imports makes the area look like an underdeveloped region--more raw material and agricultural products than finished goods are exported and far more high technology and consumer products are imported than shipped out. Imports also outweigh exports by nearly 30%.
“The imbalance between imports and exports is a problem and the whole country faces it,” said Eugene J. Milosh, president of New York-based American Assn. of Exporters & Importers. “But we have to trade goods where we have an economic advantage. That means we ship a lot of chemicals and forest products, because we have more than most other countries.
“And we ship a lot of scrap metal and paper because we produce and consume so many more finished products than most other countries that we produce a lot more waste.”
In addition to being an attractive place for brokers and freight forwarders like Zebrowski and Burlington Northern in Irvine to set up shop, the nearby ports have helped Orange County manufacturers, including computer maker AST Research Inc. and scientific equipment maker Beckman Instruments Inc., achieve significant growth through foreign trade.
“We also have the U.S. headquarters of big companies like Hyundai and Toshiba and Mitsubishi,” which has both automobile and electronics subsidiaries in Orange County, “and they’re not here just for the weather,” said Adibi, the Chapman University economist.
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Hitachi Transport System America Inc., in fact, held an open house earlier this month to show off the 340,000-square-foot warehouse complex it opened in Anaheim in August to handle goods that Hitachi ships to the United States--most of it arriving at the Port of Los Angeles.
There are 110 employees there and in just two months in business they have distributed $55 million worth of consumer and commercial products ranging from sophisticated surgical equipment and medical instruments to televisions and video players through Anaheim to Hitachi sales facilities throughout the nation.
By contrast, R.W. Zebrowski has only five employees, including Hans J. Holste, the company’s president and buying agent, and majority owner Hilla Zebrowski--whose late husband, Rolf, founded the business 19 years ago.
Though small, Zebrowski ships about $50 million worth of cotton linters--a type of short cotton stubble recovered when cotton seed is processed for its oil--to customers throughout Europe and Asia. A lot of it goes through the ports of Long Beach and Los Angeles.
A week ago, the company sent 1,000 metric tons of linters to China via the Port of Long Beach. This cotton byproduct is used to produce high-quality cellulose for explosives, food processing, plastics and paper-making. It was Zebrowski’s first deal with the Chinese and one of the first shipments of foreign-produced cotton linters into that nation in the wake of a dramatic fall-off in Chinese cotton production last year.
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As different as they are, the American cotton shipper and Japanese-owned electronics company illustrate Orange County’s import-export industry and its reliance on the neighboring seaports.
Foreign trade is important to entrepreneurial Orange County, where most companies are small: It rewards drive and initiative as well as size and financial muscle. And for several years it has been one of the only growth areas in an otherwise sluggish economy.
“We had 10% to 15% growth in the business in each of the last two years even though the economy has been down,” said Don Miller, president of the World Trade Center Assn. of Orange County. “And we expect that growth again this year.”
Without the ports, however, the growth would not be as significant or constant, he said.
Port of Orange County
In 1993, Orange County companies shipped almost 400,000 metric tons of goods from the ports of Los Angeles and Long Beach. Imports totaled about 500,000 tons. One metric ton equals 2,204.6 pounds. Orange County’s share amounts to about 2% of the tonnage shipped into and out of the ports. Cities that shipped and received the highest tonnage for both ports combined during 1993:
EXPORTS
City Metric tons Top export Los Alamitos 90,363 Paper La Palma 69,465 Paper Irvine 65,051 Chemicals Anaheim 35,191 Fruit Laguna Niguel 29,805 Chemicals Garden Grove 13,540 Paper products Newport Beach * 11,084 Fruit Huntington Beach 10,649 Metal scrap Fullerton 9,547 Chemicals Santa Ana 8,095 Metal products
* Includes Corona del Mar
IMPORTS
City Metric tons Top import Fullerton 80,074 Building materials Anaheim 70,333 Foodstuffs Irvine 62,880 Steel products Cypress 37,881 Auto parts Buena Park 37,274 Consumer goods Santa Ana 30,837 Stereo Equipment Fountain Valley 26,932 Footwear Brea 22,697 Consumer goods Huntington Beach 22,135 Sporting goods Placentia 20,284 Sporting goods
Sources: Ports of Los Angeles and Long Beach; Researched by JOHN O’DELL and JANICE L. JONES / Los Angeles Times
What We Give and Get
Orange County exports through the two ports are dominated by two commodities--paper products and chemicals; imports are more balanced. Paper products and foodstuffs are the only two products that appear near the top of both export and import lists. Top commodities in metric tons:
EXPORTS Paper products: 163,026 Chemicals: 86,639 Fruits: 30,807 Paper (including waste): 11,538 Foodstuffs: 10,325
IMPORTS Building materials: 46,113 Automobiles: 39,516 Paper products: 31,238 Office equipment: 29,696 Foodstuffs: 29,072
Sources: Ports of Los Angeles and Long Beach; Researched by JOHN O’DELL / Los Angeles Times
* TRADING PLACES: Growing need by smaller companies helps trade brokers proliferate. D8
