Blowing the Lid Off a Hot Commodity
Global commerce is neatly wrapped for Christmas on the streets of Toytown.
In cardboard boxes.
Thousands of the corrugated containers filled with Chinese-made vinyl dolls, plastic action figures, electronic gadgets, video games, clothing and die-cast cars pour daily into wholesale and retail toy shops in a dozen-block area on the eastern edge of downtown Los Angeles.
When they’re empty, the boxes are flattened, trucked out of Toytown and shipped back to China, where the cycle begins all over again.
Inexpensive toy knickknacks and knockoffs, along with electronic gear and apparel, are Los Angeles’ biggest Chinese import. And China-bound cardboard and other scrap paper have turned into a huge export.
A shortage of natural resources mixed with China’s burgeoning manufacturing sector has triggered the rush to buy recycled cardboard.
At the Port of Los Angeles, wastepaper is by far the leading export. At the next-door Port of Long Beach, it’s third, behind petroleum coke and petroleum. At both shipping centers, the Chinese demand for scrap paper far outpaces that for other recycled American exports: scrap metal and empty plastic soda bottles.
“I’ve probably seen this cardboard three or four times, maybe more,” joked Javier Ramirez as he tossed a flattened box labeled “Made in China” into the back of his 1999 Chevrolet stake-bed truck. Ramirez, 39, of South Los Angeles has been recycling corrugated boxes along Toytown’s Winston Street for seven years.
Narrow and lined with tiny storefronts, the street is one of the busiest in the city’s downtown toy district. About 1,000 shops, stalls and curbside stands fill the bustling area, roughly bounded by 3rd Street on the north, San Pedro Street on the east, 5th Street on the south and Los Angeles Street on the west.
Along with toys, the shops are filled with housewares, sporting goods, silk flowers and clothing imported from such places as Thailand and Pakistan as well as China.
Ninety percent of the stores sell at wholesale prices.
The toy district has been growing steadily since importer Charlie Woo started it by opening his own toy import business there in 1979.
These days the 54-year-old Woo is called the Mayor of Toytown by other merchants. But back then he was a UCLA student studying for his doctorate in physics when he took a summer off to help other family members launch ABC Toys, a wholesale business.
The business was a quick success. In the 1980s Woo encouraged other Asian-immigrant entrepreneurs who were buying toys from him to sell at swap meets to instead open businesses downtown near him. Woo began buying warehouses and empty buildings in the area and renting space to the newcomers.
“I always thought that bringing more wholesale businesses into the area would be beneficial to everybody,” Woo, of Rancho Palos Verdes, said this week.
As the concentration of toy sellers grew, so did the area’s reputation. Toy buyers from across the U.S. and other countries found it to be a convenient place to acquire Asian-made merchandise.
Woo said the cardboard recycling trade that has sprung up on Toytown streets is a miniature example of the global economy at work.
Among the box collectors are street people who prowl alleys to gather cardboard tossed out by shopkeepers. One, who declined to give his name unless he was paid $2, said he earns about $20 a day. He uses a box cutter to slice them open and stacks the flattened cardboard on a cart. He serves as something of a subcontractor to a main box collector who consolidates loads and takes the cardboard to recycling trucks such as the one operated by Ramirez.
Guillermo Diaz, 22, of Commerce said he has worked with Ramirez as a main box collector for seven months. He said the volume of scrap cardboard picked up dramatically as Christmas approached.
Ramirez was being paid $55 a ton this week by recycling centers that use compactors to compress the corrugated panels into bales that can be loaded onto shipping containers for transport to China. His truck carries about 2 1/2 tons of cardboard per trip. On a typical day Ramirez collects about 7,000 pounds of corrugated scrap.
The corrugated scrap price is low compared with the $70 per ton that cardboard has fetched in the past, Ramirez said. When cardboard prices are high, the four people who regularly work as Ramirez’s main collectors can pocket as much as $100 a day.
No one knows how many tons of cardboard are recycled from Toytown each year. Statistics, in fact, are hard to come by throughout the district.
Business leaders can only estimate the number of individual merchants and vendors in the toy district because some of them are unlicensed. Many entrepreneurs simply buy a few boxes of toys wholesale and then step down the street and set up shop on the sidewalk to sell the items at a markup.
Some buildings have been converted into swap meet-style operations, with merchants selling from small booths. Even the alcove at the rear entrance to 5th Street’s historic former Fire Station 23 -- built in 1910 for a horse-drawn engine company -- is used by toy sellers.
A survey several years ago by the Central City East Assn., a business improvement group that represents property owners in the toy district and the neighboring downtown industrial district, tallied more than 300 wholesale and retail stores. A new survey is planned, according to association leaders.
“We don’t really have a good count. It’s something we want to do in the coming year,” said Qathryn Brehm, director of marketing and community relations for the association.
Most Toytown importers sell wholesale to the public.
“It’s cheaper by the dozen. The item costs more if you’re just buying one,” Brehm said.
Shoppers must be prepared to negotiate, she said.
In Toytown, prices aren’t carved in cement. They’re more likely to be penciled in on cardboard.
