Hueneme Expansion Aimed at Luring Cargo From Other Ports

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, 35 miles to the south. And now it is eyeing one of the Port of Long Beach’s biggest banana shippers.

But Long Beach and Los Angeles port officials say they are not losing sleep over the move by the 50-year-old Port Hueneme 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.

No ‘Serious Damage’

“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 full 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.

The single 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 U.S. 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 now ships about 100,000 cars a year through the port.

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.

‘Big Fish in Small Pond’

“We are now considered a small operator in the scope of Los Angeles and Long Beach,” said John Musser, the firm’s vice president of operations. “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.

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 of land.

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 of land in nearby Oxnard to build facilities to inspect and test new cars that are unloaded at Port Hueneme. Each firm was assisted by port and city officials to find the properties and secure proper 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, local elected officials and business groups, working with the Southern California Assn. of Governments, have completed a preliminary study on improving roads between Port Hueneme and the Ventura Freeway.

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. Highway 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- industrial-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 Port 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 Pt. Mugu. About 11,000 Navy people and their dependents live and work at Port Hueneme, O’Connell said.

Port Built in 1937

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 over the years has 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 was 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 (R-Northridge), to force the sale of 18 acres of surplus land to the commercial port district in 1983, officials said.

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

Construction Scheduled

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

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 during the 1986-87 fiscal year, totaled about $2 million, officials said.

Profits at Port Hueneme and other harbors doing business with Pacific Rim countries is 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.

“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, 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.

Business Must Be There

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 government 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.