When Monopolies don’t take care of their customers…

Customers go elsewhere. In November, I wrote an article on the Mayor’s inability to manage the Harbor effectively. The following article in Saturday’s Los Angeles Times is another harbinger of the beginning of the end of the Los Angeles Harbor heyday monopoly. It should also be a wake up call to the other monopolies in this town. If you don’t want to loose your monopoly status, you need to take care of your customers.

Posted on Sat, Apr. 09, 2005
Shipping lines look to build Mexican port because of LA backlogs

Associated Press

LOS ANGELES - A group of shipping companies says it wants to build a $1 billion port complex about 150 miles south of Tijuana, Mexico, because of severe congestion at Southern California ports.

Plans announced Friday by Marine Terminals Corp. include a complex of berths, warehouses and cranes that could handle nearly one-seventh the current volume at the Los Angeles port, or about 1 million standard container units a year, by 2012.

Company officials hope to connect the proposed Punta Colonet harbor, located on undeveloped farmland, to California with a new rail line. Construction would take at least five years.

"We have to get Colonet developed," said Walter J. Romanowski, an executive with Marine Terminals, a Los Angeles-based holding
company owned by shipping giants Evergreen and Yang Ming of Taiwan, Hanjin of South Korea and China Shipping of Shanghai. "There are no other viable West Coast options."

The ports of Los Angeles and Long Beach, together the nation's largest port complex, have become so congested that ships often
must wait up to a week before unloading their cargo. Environmental and other restrictions limit expansion, while backups at other West Coast terminals are increasingly common.

The companies have begun lobbying the Mexican government. If approved, the facility would be one of Mexico's largest public
works projects, requiring the construction of roads, housing, public buildings and other infrastructure where none now exists.

But company officials claim it would attract enough investment and business to pay for major costs of building the harbor and an accompanying city. By competing with California ports, it could siphon away part of the $200 billion in revenue generated each year by shipping through the state.

Mexican Sen. Hector Osuna Jaime said the port could create jobs and industry in Mexico, which has lost manufacturing jobs in recent years to China. Among the hurdles facing the project are Mexican laws that would bar foreign ownership of the rail line.

Over the past three decades, Southern California's twin ports
have grown into the country's main entry point for cargo containers. In 2003, the equivalent of 11.3 million 20-foot containers passed across the docks. Only the ports of Hong Kong and Singapore saw more cargo.