Cool Connections - Port of Los Angeles

TRENDS AND BUSINESS NEWS
AT THE PORT OF LOS ANGELES
Cool Connections
At home, cold storage is simple. Put food in the fridge or freezer until you’re
ready to eat it.
But making sure perishables reach your home in top condition is a specialty
that requires precision equipment, meticulous business practices and infinite care.
That expertise is abundant at the Port of Los Angeles, which boasts more than 28
million cubic feet of high-tech cold storage capacity within six miles of its docks.
"The Port of Los Angeles handles
more than 2.3 million metric tons
of refrigerated cargo annually,
most of which is food...enough to
feed an average U.S. family for
more than 1.5 million years."
"The Port of Los Angeles handles more than 2.3 million metric tons of
refrigerated cargo annually, most of which is food," said the Port’s Business
Development Manager Marcel van Dijk. "That’s enough to feed an average U.S. family
for more than 1.5 million years."
As the West Coast’s busiest gateway for refrigerated cargo, the Port of Los
Angeles handles food products for thousands of customers who ship internationally to
millions of consumers around the globe. The top five imports entering the U.S. through
the Port are fresh fruit, shellfish, frozen fish, vegetables and bananas from China,
Chile, Thailand, Ecuador and Vietnam. The top exports are frozen meat, fruit, milk and
egg products and vegetables bound for Japan, China, South Korea, Australia and the
Philippines.
Cargo trends show the global appetite for fresh and frozen food is growing. In
the last decade, imports of refrigerated cargo moving through the Port have increased
19 percent and exports have skyrocketed 119 percent. "This is what allows people to
enjoy foods like fresh strawberries and mahi mahi on a ski vacation in Jackson Hole,"
van Dijk said.
The LA Advantage
From origin to destination, dependable cold storage is crucial. Flanking the
Port are five large near-dock cold storage facilities: Konoike-E Street, KPAC,
Americold, Preferred Freezer Services and Maruzen. Combined, the group offers the
full range of services needed to expedite fresh products to market, protect frozen
goods in short-term storage, and ensure special handling – such as blast freezing or
government inspection – is done safely and swiftly to protect customer and consumer.
All five cold storage facilities are run by approved container freight station
operators and are situated where cargo can be efficiently loaded, unloaded,
consolidated and held pending clearance by U.S. Customs and Border Protection. All
sites are also certified and equipped to accommodate inspections by the U.S.
Department of Agriculture, and some are bonded warehouses that accommodate
imports passing through the U.S. on their way to another country.
Timing and temperature are everything, said Rich Burke, president and chief
operating officer of Konoike-Pacific California Inc. His company operates the
Konoike-E Street and KPAC cold storage warehouses located in Wilmington, Calif.,
within one mile of the Port. "Our customers put their products in our care and custody,
and we treat them as our own," Burke said.
The 4.2 million-cubic-foot E Street location has eight separate rooms to
accommodate a range of temperature needs: ice cream stored at 15 to 20 degrees
below zero; frozen meat products stored at minus 5 degrees; 32 degrees for
high-water content fruits such as table grapes and stone fruit; 34 to 38 degrees for
citrus; 38 to 42 degrees for melons; and 50 degrees for coffee, vitamins and candy.
Computerized systems monitor temperature, humidity and ethylene levels.
The latter, a natural by-product of certain fruits, is released in the form of a gas and
can cause other fruits to ripen prematurely. "You can’t store apples, pears and kiwis
together in the same room," said Burke, whose facility has an air-lock vestibule to
contain ethylene emissions. "This is the level of knowledge and service our customers
expect."
Speed-to-market is a top priority for many of Burke’s customers and the
growing cargo volumes have triggered an increased demand in transloading. To meet
the need, Konoike-E Street doubled its loading-dock area and opened 15 new bays in
April for a total of 31 bays. "Everyone wants turns," Burke said.
Another mainstay of the Port’s near-dock cold storage providers is back-up
systems. Preferred Cold Storage operates a 4.8 million-cubic-foot warehouse, also in
Wilmington within one mile of the Port. Specializing in frozen goods, Preferred’s
refrigeration is powered by a main generator backed up by a second generator
backed up by a third system – a 100 percent diesel generator – all capable of keeping
the entire facility at minus 5 degrees.
"Maintaining the integrity of the product is our life’s blood," said Sales
Manager John Zarrella.
Best business practices include keeping costs down by maximizing valuable
Southern California real estate with 40-foot tall rooms that allow chilled and frozen
products to be stacked and using technology such as radio frequency identification for
accurate storage, tracking and retrieval of inventory. The cluster of five cold storage
warehouses near the Port helps everyone, Zarrella said. "There’s strength in our
combined capacity because there’s so much product coming through the harbor
complex year-round."
More Benefits
The heavy container corridor connecting the Port to these near-dock facilities
is another advantage in the logistics chain, said Roger Clarke, owner of Williams
Clarke Company Inc. The Wilmington-based customs brokerage firm’s top
commodities include squid, a bountiful import and export. "Much of our seafood comes
in overweight. Within the corridor you can transport it legally," Clarke said.
The corridor allows trucks exceeding the normal limit of 80,000 pounds to
expedite cargo for cold storage or transloading without penalty. The cap is 95,000
pounds, giving shippers the additional flexibility they need to move refrigerated cargo.
"Smaller loads can also be grouped together for better export rates," Clarke said.
Security is another factor, Clarke said. "We have high-value imported seafood
that runs as high as $1.3 million for a single container. Some importers have armed
guards escort the container to cold storage. The shorter the distance, the lower that
cost and the better the security."
The Port’s vast near-dock cold storage capacity is part of an even larger
regional network of cold storage facilities, with each near-dock operator part of its own
global group. With a consumer base of more than 16 million people in the greater L.A.
area and an estimated 75 percent of fresh and frozen imports destined for their tables,
that’s important, Clarke said. It’s also important to California, the nation’s largest
agriculture producer and exporter, he said.
Customs inspectors assigned to the Port are equipped with mobile X-ray units
and radiation detection scanners, which allow them to check refrigerated containers
on-dock without breaking the seal and keep the cargo moving. In the event inspectors
want to take a closer look, there are three dedicated Centralized Examination Station
(CES) sites within about 10 miles of the Port. Operated by California Cartage Co. and
Price Transfer Inc., the stations are near-dock facilities where multiple government
agencies inspect cargo for everything from contraband to contamination. All three are
set up to keep perishable cargo cool.
Between 2013 and 2014, the volume of U.S. agricultural exports is projected
to increase 31 percent for a record value of $145.5 billion. In California alone,
agricultural exports exceed $18 billion. At the San Pedro Bay ports, near-dock cold
storage capacity is growing to meet the demand. Baker Cold Storage Inc., a
subsidiary of Baker Commodities Inc., and Lineage Logistics are building a cold
storage facility due to open in fall 2015. The facility will add another 8.2 million cubic
feet of cold storage capacity within six miles of the Port.
Food products are "naturally tributary," meaning they flow the shortest
distance between two points, said Peter Friedmann, executive director of the
Agriculture Transportation Coalition (AgTC). The Washington, D.C.-based group is the
leading voice of agricultural exporters on U.S. transportation policy.
Given that U.S. agricultural products are one of the U.S. economy’s
fastest-growing exports, sufficient near-dock storage cold capacity is critical,
Friedmann said. So is an efficient freight transportation network, he added. "The rail
service from the Midwest to the West Coast continues to provide excellent access to
Southern California ports."
Friedmann sees one more benefit of moving cargo through the Port of Los
Angeles: its new top executive whom the AgTC has known for many years. "We were
delighted to see Gene Seroka as the Port’s executive director," Friedmann said. "He’s
led best practices sessions at our annual meetings, engaged with agriculture
exporters at our workshops all around the country, and understands the nitty-gritty
logistics details of what an agricultural exporter needs."