Harboring Great Dreams : TRADE: The Port of Hueneme is dinky next to mega-ports in Los Angeles and Long Beach, but it’s growing nicely thanks to a focus on fresh fruit and autos.
For years, the tiny Port of Hueneme tried to persuade Cool Carriers, a Swedish shipping concern that hauls Sunkist Growers’ fruit overseas, to use its docks. For years, Cool Carriers said no.
The line had comfortably berthed at the Port of Long Beach, the biggest port on the West Coast, for 22 years. Besides, Gerry Fountain, president of Cool Carriers USA Inc., thought the Port of Hueneme was just too small.
But Port of Hueneme executives “never let go,” Fountain said. “They continually came after me. They showed me they could do it.”
So Cool Carriers switched its Sunkist shipping business to Hueneme last December.
Mainly what the Port of Hueneme did is build an $11-million dockside refrigeration facility for Cool Carriers. The warehouse--the largest and most modern of its kind on the West Coast, port officials boast--keeps Sunkist citrus fruit fresh while awaiting shipment overseas. That’s a crucial competitive and marketing advantage for Sunkist; at Long Beach, the oranges would sit up to four days in open-air sheds. Fountain had asked for a new storage facility at the Port of Long Beach, but couldn’t strike a deal.
Recently, Cool Carriers brought back former Hueneme customer Turbana Corp., which uses the new warehouse to store its own imported bananas. The Hueneme port also receives bananas and melons for Del Monte Foods, a longtime customer, and to keep Del Monte happy the port is lending the money to build another $3-million refrigerated facility to be finished next summer.
To be sure, the 54-year-old Port of Hueneme, with its 70 acres and five berths nestled next to a Navy facility, is still a lily pond compared with the mighty expanses of the Los Angeles and Long Beach ports.
But Hueneme is the only deep water port between San Francisco and Los Angeles, and in its fiscal year ended June 30 it handled 790,700 revenue tons of cargo, up 26% from the year before. But that’s dinky compared with the 83 million metric revenue tons at Long Beach in fiscal 1994 and 65 million at Los Angeles.
Small as it is, Hueneme isn’t the smallest of the state’s 20 ports--those in Redwood City, Alameda and Eureka are even tinier. But for decades the port here languished, bound by its small acreage and its location in laid-back Ventura County. Meanwhile, those in Los Angeles and Long Beach grew into giants, thanks to the booming Los Angeles metropolitan area, access to rail lines and investments in equipment and facilities needed by big shipping lines.
Nonetheless, the Port of Hueneme’s pond is filling up nicely with its successful specialty in fresh fruit and autos. The amount of cargo passing through has increased by a third over the past decade, and its operating revenues are expected to grow to a record $6.1 million in the current fiscal year, up from $4 million in fiscal 1990.
The port consistently reports a surplus over its annual budget and has been paying off debt early. In a recently released report, the Port of Hueneme estimated that it directly or indirectly generated $275 million in sales and 2,553 jobs in Ventura County.
Credit for the once-sleepy port’s awakening goes largely to Anthony Taormina, the aggressive executive director of the Oxnard Harbor District, which owns and runs the port. A former Port of San Francisco deputy director of planning and research, Taormina moved south in 1985 to run, figuratively speaking, his own ship, and he is now paid an annual salary of $99,960.
Taormina saw that the mega-ports in Los Angeles and Long Beach were concentrating increasingly on the flourishing containerized cargo trade--which includes everything from shoes to VCRs that is shipped in 20-foot or 40-foot metal boxes. Long Beach now is the nation’s largest container port; Los Angeles the second-largest. At the same time, Taormina didn’t want to continue relying on the Port of Hueneme’s biggest business then of supplying equipment to offshore oil platforms, given the volatility of the oil market.
So he and his staff of 20 focused on the other two industries Hueneme had traditionally served: fresh fruit and cars. And they lured customers who felt lost at sea in Los Angeles and Long Beach.
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Taormina learned how large ports can get afflicted with nearsightedness at the Port of San Francisco, which for more than a decade has lost business to Oakland’s port. “One of the failures of San Francisco was it felt that it was the port, and no one could take cargo away from it.”
To bring new business to Hueneme, Taormina said, he used the “sleepy little port” image to his advantage by quietly negotiating deals that the crowded ports of Los Angeles and Long Beach couldn’t match. The fees charged on cargo and ships are generally uniform port to port. But prices for renting or owning facilities at or near a port can vary widely, and therein lies an advantage for Hueneme, which has much relatively cheap land available nearby.
Consider BMW, which has delivered all its cars for 12 western states to Hueneme since 1988. The German auto maker had wanted to build a facility near the Port of Los Angeles, its old delivery spot, where it could put the finishing touches and accessories on the imports. But that proved impossible because land near the harbor is at a premium. BMW would have had to rent an old building there.
“It was easier to come to a new and emerging port like Port Hueneme where we could get the acreage close to the port and build our own facility,” said Tom McGurn, a spokesman for BMW of North America Inc.
Since then other European auto makers, including Land Rover (which also makes Range Rover), Jaguar and Volvo, have followed BMW and their common shipping line, Wallenius of Sweden, to Hueneme. Keven Beirne, regional manager for Wallenius Lines North America Inc., said the auto industry has been left somewhat on the sidelines at Los Angeles and Long Beach as those ports devote more space to containerized cargo. Wallenius turned to Hueneme after growing frustrated with the larger ports’ congestion and high rates for using the port facilities.
Wallenius ships about 50,000 cars a year to Hueneme. Three times a month, one of Wallenius’ giant floating parking lots, big enough to house 5,800 cars nose to nose on 13 decks, nestles up to Hueneme docks. Longshoremen working for stevedore companies drive the cars down ramps and park them in an adjacent lot. The cars are driven a mile down a sparsely traveled road, past strawberry fields, to the finishing facilities and are then trucked to dealers throughout the West.
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Wallenius, Cool Carriers and a third fruit-shipping line, J. Lauritzen of Denmark, are the biggest shipping customers at the Port of Hueneme. On a typical day, two ships pull into dock. Recently, Wallenius’ Madame Butterfly--all the company’s ships are named after operas--began its voyage in Sweden and picked up cars at various places in Europe. After docking at Hueneme, it was bound for ports up the Pacific Coast and then to Japan.
Yet another auto maker, Mitsubishi of Japan, moved its California car shipments to Hueneme in January, after the Port of Los Angeles told the Japanese company it would have to move to a smaller dockside facility to make room for incoming coal shipments and pay a higher rental rate.
“We didn’t feel the Port of Los Angeles was as committed to the auto business,” said Katy Bremer, director of corporate logistics at Mitsubishi Motor Sales Inc. “We needed to be someplace where autos were a priority.”
But it’s the deal with Sherman Oaks-based Sunkist and its Cool Carriers shipping line that Taormina considers his biggest coup.
Sunkist had long wanted a refrigerated facility to increase the shelf life of its oranges and lemons. The Oxnard Harbor District offered to sell tax-exempt bonds to pay for the 70% of the facility that the port would own, and Cool Carriers agreed to pay for the remaining 30%. After that, “the only thing we needed to know is that we could get our vessels in there,” said Sunkist spokesman Bill Quarles.
Sunkist now ships 60% of its member packinghouses’ fruit out of Hueneme in pallets, bound for Japan and other Pacific Rim countries. The rest of Sunkist’s exports still go out of Long Beach and Los Angeles because they are packed in containers that require those ports’ specialized container operations.
Losing business to Hueneme hasn’t gone unnoticed at Los Angeles and Long Beach, although any injury to the bigger ports is more like a pinprick than a body blow. “We’re in a competitive industry, and we certainly don’t like losing any accounts,” said Port of Los Angeles spokesman Jeff Leong. “But it would hurt more if we lost one of the major container shipping lines.” Indeed, some observers say the Los Angeles and Long Beach ports are just as glad to see non-containerized cargo go elsewhere so they can expand on their lucrative container business.
And Taormina is well aware that the Port of Hueneme still has many limitations. He has tried and failed, for instance, to lure the nation’s largest banana companies, Dole Food Co. and Chiquita Brands International, to his port. The companies now ship through Los Angeles and Long Beach and they consider Hueneme too small for their needs.
Launched in 1940 by local farmers, the Port of Hueneme was operating for only two years before the Navy took it over during World War II. In the 1960s and 1970s, the Harbor District bought back about 70 acres from the Navy and resumed commercial port operations.
Taormina is now looking at ways to keep the port growing. He’s close to a deal to lease another berth and 25 acres from the Navy on a part-time basis, an achievement that would allow another shipping line to come in. He’s also hoping to capture more business from BMW as the auto maker increases production at its first U.S. plant in Virginia.
And last week, the Port of Hueneme won another victory when it was approved by the Department of Commerce as a foreign trade zone. The new status gives import companies an advantage by allowing them to forgo paying customs duties until their goods leave the port.
But mostly Taormina sees the port growing along with expanding Pacific Rim trade and the opening of markets under the North American Free Trade Agreement and other trade pacts. If China ever opened its market to citrus imports, he said, Hueneme would be one busy little port. “We have really established a niche,” he said. “We now have to look at how do we enhance that niche.”
