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Huge Month Says Volumes
About Changes at L.A. Port

by Ronald D. White, Times Staff Writer
Los Angeles Times, November 21, 2006

The facility, under new management and intent on luring back business,
moves a record amount of cargo, keeping ahead of its Long Beach rival.

More than 800,000 cargo containers of dolls, socks and other goods flowed through Los Angeles' port in October, the most ever for any U.S. harbor, reflecting resurgent operations under new management.

The fresh wave of shipping business contrasts with last year's sluggish growth that had many suspecting that neighboring Long Beach would dethrone L.A. as the nation's busiest containership port. Such a sea change, however, won't happen this year.

"I think we were ahead of them in February, but they have really picked it up in the last few months," said Art Wong, spokesman for the Port of Long Beach.

No other U.S. port has ever moved 700,000 containers in a month, a feat Los Angeles managed one other time in 2005. But this year, Los Angeles has moved more than 700,000 containers in each of the last five months, more cargo than the 15th-ranked container port in the nation -- Jacksonville, Fla. -- handled in all of 2005.

In October, the L.A. port tally rose to the equivalent of 800,064 20-foot containers. Laid end to end, they would stretch 3,030 miles -- about the distance from Los Angeles to Port-au-Prince, Haiti. During the same month, the Port of Long Beach handled 650,726 containers.

"What this record reinforces is the tremendous economic importance of both these ports on our local economy," said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce. "They have just done a great job in improving their ability to handle all that cargo."

The ports, which employ 500,000 people, each year fund a $22-billion payroll and pay $7 billion in taxes.

Through October, container cargo at the Port of Los Angeles is up 13% from the same period last year, and Long Beach is running about 9% higher. The port of Oakland is up nearly 7%, but many other ports around the nation, such as Tacoma, Wash., Charleston, S.C., and the four facilities run by the Virginia Port Authority, are experiencing only modest growth.

The increased volumes in Los Angeles and Long Beach contrast with the ports' experience in 2004, when the facilities were overwhelmed by an unexpected surge in cargo. Ships had to wait as long as a week to unload their cargo. Retailers scrambled to move some business to other ports. Shipping lines such as Hyundai Merchant Marine Co. added service to the Pacific Northwest to diversify.

By 2005, the problems had been solved. More dockworkers were hired and terminals at both Southern California ports stayed open long into the night and on Saturdays. Long Beach had a huge year as a result, nearly catching its neighbor.

But lingering doubts about its ability to handle growth haunted the Port of Los Angeles, which posted a 3% increase in container traffic for 2005 compared with Long Beach's 16% boost.

This year, Los Angeles Mayor Antonio Villaraigosa has called for environmentally responsible growth at the port, unlike his predecessor, James Hahn, who discouraged expansion at the facility.

And Geraldine Knatz, former managing director of development at the Port of Long Beach, was hired to run Los Angeles' port. She quickly learned that the Los Angeles facility's image was of a port that wasn't interested in more business.

"People would tell me they were surprised. 'Oh, you want to grow? I thought you wanted to stay static,' " Knatz said. "I hope there is a new feeling of optimism. Maybe we are finally getting the message out."

Some shipping lines and customers are getting the word.

Hyundai Merchant Marine, for instance, added a sixth route this year to move goods from Asia to Los Angeles.

Phillip T. Wright, West Coast vice president of Haifa, Israel-based Zim Container Line, said that Los Angeles benefited from the changes that helped Long Beach in 2005: plenty of dockworkers and extended terminal hours.

In addition, some of those shipping lines and retailers that diverted cargo from Southern California faced other challenges this year that resulted in a shift back to Los Angeles and Long Beach, analysts said.

"Puget Sound was less attractive for cargo this year because those rail lines had to compete with huge volumes of coal shipped from the Powder River Basin in Wyoming," said Paul Bingham of Global Insight, a consulting firm hired by the nation's largest retailers to keep monthly tabs on port traffic.

Even the port's smaller customers, such as Torrance-based Lantech Systems, are cheering the L.A. port's performance. Lantech, which makes custom servers and workstations used for animation and visual effects, has 10 employees and about $3 million in annual sales.

In the past, it took an average of two weeks for a shipment of parts to clear the Port of Los Angeles and arrive at the warehouse, said Altaf Lalani, vice president of sales and marketing for Lantech. This year, it took just five days.

"It was amazing," Lalani said. "We just have to assume they are getting better at it."

Ronald D. White, Times Staff Writer
Huge Month Says Volumes About Changes at L.A. Port
Los Angeles Times, November 21, 2006

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