New Auto-Import Agreement Will Boost Bottom Line for Pasha and Port of San Diego

Friday, 10 July 2009
Contact: Ronald W. Powell (619) 665-2815, John Gilmore (619) 341-5684

In a boost to the Port of San Diego's maritime business and San Diego's regional economy, Pasha Automotive Services is announcing a three-year agreement to import a combined 50,000 Hyundai and Kia automobiles a year, with the first shipment expected July 18.

The autos will be shipped to the Port's National City Marine Terminal where Pasha operates its car import business. The vehicles will be loaded onto rail cars for delivery to auto dealers in Texas.

Pasha Automotive Vice President John Pasha said the number of cars arriving in port could increase as consumer demand picks up. The deal is with Glovis America, the Costa Mesa-based U.S. division of the South Korea logistics provider for Hyundai and Kia brands.

"The Pasha Group is thrilled to be awarded a long-term contract with Glovis to handle Hyundai and Kia imports through the National City Marine Terminal," Pasha said. "The addition of more than 50,000 vehicles annually brings job security and scale for our rail operations. We are pleased to see that the substantial terminal infrastructure investments made in the last 10 years continue to accommodate and attract customers to the Port of San Diego.”

The new contract will also boost the port's bottom line, bringing in an estimated $1 million a year in revenue under the Port's lease with Pasha.

The agreement underscores the necessity of maintaining the port's two cargo operations as economic engines to the region. In 2007 through 2008, Pasha imported 438,000 vehicles to the National City terminal, including Lamborghini, Bentley, Lotus, Porsche, Volkswagen, Audi, Honda, Acura, Mitsubishi, Isuzu and Mazda makes.

Despite the worldwide economic slump, cargo activity continued this week at the Port's Tenth Avenue Marine Terminal in downtown San Diego where cargo ships delivered massive pieces of green technology intended to help revolutionize the way Americans generate and consume electric power.

Longshore workers, in a delicate ballet of man and machine, used heavy-lift cranes, hoisting the General Electric windmill components -- some of them in 85-foot-long sections -- onto trucks for storage at the terminal until they are shipped in mid-August to a wind farm in Palm Springs. The tower components are essential parts of windmill towers that rise 256 feet, and the shipment was but one of a series of deliveries from China that the terminal will handle in coming months.

The Tenth Avenue Marine Terminal has become a frequent portal for wind energy components, including blades, rotors, and other parts imported from Japan. The parts are trucked to wind farms as far away as Texas, Colorado, New Mexico and Utah for alternative energy projects in those states.

From an environmental standpoint, such green equipment advances the U.S. Department of Energy's goal of having 20 percent of the nation's energy needs generated from wind power by 2030.

---

Read Letters of Support:

• Working Waterfront Group (PDF)
• Port Tenants Association (PDF)
• The Jankovich Company (PDF)

---

But locally, the movements of those and other goods underscore the necessity for maintaining the Port's Tenth Avenue and National City terminals as vital sources for international commerce and jobs for the San Diego region.

Waterfront jobs associated with industry and trade ripple out from the terminals to multiple employers, generating about 42,000 jobs in the San Diego region. A study commissioned by the Port of San Diego concluded that maritime-related commerce accounts for more than $7.6 billion in annual economic impact in the region.

While the Port does not have enough space or infrastructure at its 137-acre National City terminal or its 96-acre Tenth Avenue terminal to support a large-scale container shipping operation, the facilities have experienced a steady increase in "break bulk" commodities. Called break bulk because in shipping parlance the goods are not transported in the boxcar-like containers, they range from bagged cement, fertilizer, lumber, steel and other industrial products.

Tenth Avenue tenant Dole Fresh Fruit imports bananas, strawberries, pineapples, melons and assorted vegetables through the facility. The produce is stored on pallets at Harborside Refrigerated Services, a cold storage business at the terminal, for delivery to stores in the region and other parts of the West.

Over the past five years, Tenth Avenue's break bulk operation has processed more than 12.6 million tons of cargo.

Port officials began focusing attention on bolstering the maritime cargo operation early this decade when the Port's basic structure underwent a dramatic change.

At the end of 2001, state legislation went into effect that separated San Diego International Airport, commonly called Lindbergh Field, from the Port. It prompted the port to place greater emphasis on growing maritime cargo and cruise ship commerce into a more robust business line.

In some ways, the timing was perfect. Megaports in Long Beach and Los Angeles were and continue to be jammed with cargo traffic from the Pacific Rim, creating opportunities for San Diego to pursue new business. Trade missions to South America, Asia and Europe have ensued to cultivate new business. Some efforts have generated businesses, while others take longer to complete.

Part of the Port's new emphasis on maritime included the consolidation of accounting of financial information from the three terminals into one grouping -- something that is a standard industry practice. Unlike many ports around the country that are operated by a city department, the San Diego Unified Port District operates the cargo and cruise ship terminals as one business line, prompting a single accounting category as part of the budget.

The consolidation also helped galvanize businesses along the waterfront and at the two cargo terminals into a Working Waterfront Group that has become a force for public information and public policy on the need to preserve the industrial-based jobs it produces. Ship building, ship repair, cargo handling, and transportation of goods generate good-paying jobs that allow workers to support families.

While preservation of waterfront jobs is a priority, the Port and the Working Waterfront Group, have made strides, particularly at the Tenth Avenue Marine Terminal, to become a better neighbor to the nearby residential communities. Trucks traveling to and from the terminal have been rerouted to reduce noise, traffic congestion, pollution and parking problems that were irritations to residents of Barrio Logan. Funding for road improvements that would further decrease truck traffic impacts are being sought by the port.

Beyond its purpose as a catalyst for economic activity, the port's maritime division plays a role in America's homeland security network. It is one of 19 designated "strategic ports" in the country. That means it must be ready for military use within 48 hours written notice from the Department of Defense to ensure the smooth and secure flow of cargo for the armed services. Already, the terminal is frequently used by the military throughout the year.

Some observers view the terminals as prime property that brings a less than optimum return in value because of their waterfront locations. Some have suggested a sports stadium, high-end hotel, residential development or some other commercial development would generate more revenue than the cargo facilities.

But the Port operates the terminals as part of a state trust. The terminals are state tidelands that are administered by the Port. And the state has deemed port facilities as among the highest uses for that property.

And when considering where the terminals are located, one thing is certain: Deep-water shipping vessels cannot dock just anywhere. The same is not true for the development of a stadium, a hotel, or a condominium project.

---