Los Angeles Port’s Foreign-Trade Zone Expands

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It’s more than 100 miles away from San Pedro Bay, but the Tejon Industrial Complex is very much a part of the Port of Los Angeles.


The U.S. Department of Commerce has approved a bid by the Los Angeles Harbor Commission to expand a foreign-trade zone tied to the port to include a portion of the 1,450-acre industrial Tejon complex in Kern County. The designation will allow manufacturers and distributors to reduce transportation costs by deferring import duties and streamlining the movement of goods to warehouses.

Robert Stine, chief executive of Tejon Ranch Co., a Lebec-based company that is building the complex with New York City-based partner Rockefeller Group International, said the foreign trade zone designation will be key in helping the company attract tenants.

The cluster of warehouses, located just off the Golden State (5) Freeway at the base of the Grapevine, is designed to compete with the increasingly congested Inland Empire and other industrial areas for port-related business. Companies often have imported goods trucked to nearby distribution centers where they are stored before being shipped to retail stores.

The Tejon complex is home to a 1.7 million-square-foot warehouse that serves as the West Coast distribution headquarters for Swedish retailer Ikea. Tejon Ranch also recently opened a 606,000-square-foot building and is looking for occupants.

Construction has continued despite efforts by environmentalists to preserve the land and block further development.


Hybrid Bus Order

Capstone Turbine Corp., a Chatsworth-based manufacturer of microturbine energy systems, has received an order for 15 microturbines to be deployed in hybrid electric buses in Italy.

Italian transit company Eco Power Technology will install the 30-kilowatt devices in 12 buses in the Abruzzi region of Italy as part of a government initiative. The value of the contract was not disclosed.

Jim Crouse, Capstone’s executive vice president of sales and marketing, said using the devices in urban transit vehicles provides a slate of advantages over diesel-powered and traditional electric-diesel hybrid buses, including lower emissions and improved fuel mileage.

Microturbines are roughly the size of a refrigerator and work like a jet engine to provide low-emission energy.

“In this application, the onboard Capstone microturbine keeps batteries charged and serves as an extra source of electricity for rapid acceleration, climate control and full passenger loads without the range limitations,” Crouse said in a statement.

Capstone, which recorded revenue last year of $28 million, is the only company selling turbines in large volume for use in urban transit vehicles.

Crouse said this order is important for the company and might open additional market opportunities in Europe and the United States.

News of the order sent the company’s stock up more than 8 percent and it reached a new 52-week high of $2.28 on March 6. The price has since dropped to around $2 per share.


Shippers Struggling

Rising bunker fuel costs and flat cargo volumes are leading the world’s largest shipping lines to take the drastic measure of sharing ships for some transpacific lines that serve the Port of Los Angeles.

A.P. Moller-Maersk, Mediterranean Shipping Co. SA and CMA-CGM SA have agreed to drop several lines and begin sharing space on their ships for particular routes, which they said will lower operating costs but maintain their respective market shares.

Cargo volumes at the local ports were essentially flat last year and experts predict similar stagnation for 2008.

At a conference earlier this month, Nils Andersen, chief executive of A.P. Moller-Maersk, said bunker fuel prices have tripled in the last three years to $500 per metric ton.

Bunker fuel is a sludgelike heavy oil that ships need to heat before it can be pumped into engines.


European Push

Crystal Cruises Inc., the Los Angeles-based cruise line, is making a push to retain the business of travelers who might be scared off by the declining value of the dollar in the international marketplace.

The company said last week it is offering drastically reduced airfares for travelers who book select European cruises. The announcement came the day after the company introduced what it calls “extreme luxury” European tours, which include yacht excursions, helicopter rides and other extravagant features.

Spokeswoman Julie Dibble said the company is targeting travelers who might be scared by the dollar’s decline.

Through a partnership with British Airways PLC, Scandinavian Airlines System and Deutsche Lufthansa AG, Crystal is offering reduced business-class airfares that are lower than standard unrestricted tickets from the United States to Europe. The fares are available for select Northern European cruises.

The company’s new luxury cruises cost as much as $20,000 and feature Mediterranean destinations.


Staff reporter Richard Clough can be reached at

[email protected]

, or at (323) 549-5225, ext. 251.

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