Gateway to China

Number of containers through Port of Tacoma triples in eight years

September 18, 2005 

China’s emergence as a world trade power has played a significant role in the Port of Tacoma’s growth – sending hundreds of millions of dollars in shoes, toys and other products through its terminals each year.

The number of containers coming from China or Hong Kong or heading there from the Port of Tacoma has doubled in the past five years – and tripled in the past eight, according to the Port Import Export Reporting Service. The country is the port’s largest trading partner in terms of volume and second in terms of cargo value.

Port of Tacoma Commissioner Connie Bacon began visiting China 20 years ago when she was director of the World Trade Center Tacoma, and visits now as a representative of the port. She’s seen the growth and change as new skyscrapers replace old buildings, and Western-style clothing replaces traditional Chinese dress.

“It was clearly evident early on that China would be the market it’s developing into now,” she said.

But the pace of the country’s growth has amazed David Beckmann, president of Tacoma-based Emerald Home Furnishing, which imports furniture from China through the Port of Tacoma. He first traveled to China a decade ago in search of American-style furniture manufacturers.

His company imported two containers of furniture to Tacoma that year. China is now the company’s largest overseas source of furniture, with Chinese manufacturers shipping Emerald Home Furnishing more than 1,000 containers of furniture each year.

“China has become the workshop of the world,” Beckmann said.

Furniture is the fifth-ranked import, in terms of dollar value, coming through the Port of Tacoma from China.

Here are a few more facts on what’s in all those boxes and how the port coordinates business with the country.

TOP IMPORT

Shoes. Footwear is the No. 1 import coming into Washington state and into the Port of Tacoma from China. More than $991 million worth of shoes traveled through Tacoma’s port last year, representing a 38 percent increase from the four previous years. Electrical machinery, toys and sports equipment, other machinery and furniture follow footwear in terms of the Port of Tacoma’s top imports.

Bill Mongelluzzo, the West Coast editor for the Journal of Commerce, said the location of distribution centers for “big box” stores such as Target and Wal-Mart drives which ports consumer products, such as shoes and other apparel, come through. The Kent area and Pierce and Thurston counties have numerous distribution centers, including a new Target Import Center in Lacey.

“They used to come in mostly through LA/Long Beach,” Mongelluzzo said. “Now they have diversified.”

TOP WASHINGTON EXPORT TO CHINA

In terms of dollar value it’s soybeans, passing through the port from the Midwest. More than $211 million worth of soybeans moved through the Port of Tacoma in 2004, which was a 536 percent increase from 2000. Janet Leister, manager of the Washington Department of Agriculture’s international marketing program, wasn’t surprised by the port’s increase – she’s seen similar spikes in her own data.

The state exported $365.4 million worth of agricultural products – including soybeans – to China in 2002. Two years later, that number rocketed to $1.1 billion worth of agricultural products, with soybeans accounting for 75 percent of the exports. The state also exports seafood and apples.

So what’s behind the bean rush?

Eric Hurlbert, the agricultural department’s chief of food industry development, said China’s demand for soybeans, used primarily for feed and oil, is growing. Most of the Midwestern soybeans used to head down the Mississippi River to Southern ports. But as those ports became overloaded with demands for more profitable products, the soybeans have been diverted to the Northwest, Hurlbert said.

FASTEST-GROWING EXPORT

Steel scrap. Eighty million dollars worth of scrap steel left the Port of Tacoma for China last year. That’s a 567 percent increase over a four-year period. China is fast becoming the world’s largest steel producer and consumer, said Khent Zhang, head of the Greater China Program for the Washington State Department of Community and Economic Development.

“China is actively acquiring anything that can produce steel, including scrap metal, because there is so much building and industry going on there,” Zhang said. “Its own resources are not enough and buying finished products is too expensive.”

Copper scrap – $45 million worth – was also shipped out of the Port of Tacoma. That export increased 462 percent in the same two years. He attributed that increase to China’s manufacturing of electronics and need for wiring used to make the products.

PORT TRAVEL TO CHINA

The port’s executive director and three commissioners traveled to Shanghai in May to attend the International Association of Ports and Harbors conference in Shanghai. Port staff will travel to the country at least three more times this year for customer visits and as part of Gov. Christine Gregoire’s Asia trade mission, which left Saturday, a Washington business trade mission and a containerization conference. Commissioners might join them.

Two of the port’s customers, Maersk and Evergreen, make many stops in China, said Tim Farrell, the port’s executive director. Getting to know the country helps the port understand its own customers’ business and could generate potential business opportunities, Farrell said.

The May China trip cost the port $42,000 in airfare and hotels. The costs of the upcoming trips was unavailable.

EMPLOYEES IN THE FAR EAST

The port translates its marketing material into Chinese and has had a representative in Shanghai for almost five years. That’s Christine Fan. She spends her days selling the Port of Tacoma to Chinese shippers. The port has nine other sales offices around the world, including offices in Hong Kong, Singapore and Seoul. Fan says her job is an easy one because the port’s advantages do her work for her.

“Most container shippers are concerned about the congestion problem,” she said. “Tacoma has room to grow.”

That gives it a big advantage over other West Coast ports, she said, most notably Los Angeles and Long Beach, where crowding routinely causes backups of ships waiting to unload. The quicker China’s shippers can get to America, get unloaded and head back, the better they like it, Fan said. Shippers appreciate Tacoma because they can unload containers as soon as possible instead of waiting.

The port’s disadvantage, she added, is that relatively few consumers live in the Northwest compared to the 34 million consumers in California that are accessible through the ports of Los Angeles and Long Beach.

But Southern California’s traffic congestion is the worst in the country, while Tacoma’s expansion projects are making transportation in and out of the port more efficient for long-distance rail and truck lines to the upper Midwest.

“Also,” she said, “Tacoma can handle many kinds of cargo. Los Angeles and Long Beach are more focused on containers.”

Kelly Kearsley: 597-8573; kelly.kearsley@thenewstribune.com Staff writer Rob Carson contributed to this report.

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