Facilities the biggest air cargo headache at LAX

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Los Angeles International Airport
Los Angeles International Airport

Los Angeles International Airport (LAX) is the busiest and key air cargo gateway on the west coast of the US.

In 2015, LAX handled 1.9 million tonnes, which was almost as much tonnage as the next five highest ranked North American west coast airports combined (Oakland, San Francisco, Ontario, Seattle, Vancouver).

The hub was ranked the fifth in the US in 2015 behind Memphis, Louisville, Anchorage, and Miami, but along with Miami is arguably the most important due to its network.

The operator is Los Angeles World Airports (LAWA) and coordinator for cargo and international Trade at LAX, Ross Vitale, who also sits on the board of the Los Angeles Air Cargo Association (LAACA) says a key part of success is that the airport has a very well established and maintained air cargo community that manifests itself in a thriving LAACA.

He says the cargo community in general across all modes in Los Angeles is doing even more to increase the synergies: “Recently, the operators of LAX and of the Port of Los Angeles have begun coordinating more closely to jointly address challenges – such as truck congestion – common to both air and sea cargo, as well as to jointly market the region’s cargo assets.”

Vitale notes this year has been challenging and tonnage is down two per cent through June 2016 in year-on-year comparisons for the same six-month period and despite a good result in 2015 tonnage was down five per cent last year compared with its peak year of 2000.

He says in terms of total cargo share, international traffic first passed domestic in 2004 and has extended that trend ever since, accounting for 60 per cent of total cargo so far in 2016.

LAX serves local and regional consumers, and as a hub for cargo flowing between Asia and the Americas. Consequently, Vitale says at least 50 per cent of cargo has neither an origin nor destination in the nearby service area but rather is trucked or flown great distances to leverage the network access LAX offers to/from Asia.

He adds: “Still, it must be noted that Southern California hosts a regional economy as large as most entire nations and LAX’s FedEx operation – a non-hub that largely serves regional demand – accounted for enough tonnage in 2015 to have ranked in the US top 20, by itself.”

There are challenges in the LAX market and particular ones for Los Angeles being one of North America’s main international gateways.

He explains: “LAX faces facilities challenges borne of its success and of an evolving industry that has different needs than when some of its facilities – cargo and otherwise – were first designed and built.

“Whether to grow or just maintain the air cargo industry, LAX needs to modernise some its existing cargo facilities, as well as optimise coordination of off-airport surface transportation (trucking) with major ongoing infrastructure projects that will eventually relieve some roadway congestion but must necessarily add to traffic issues in the near-term.”

The future for air cargo is likely to be rocky at LAX as meeting demand and upgrading facilities will be big challenges to overcome.

Vitale says the principal concern for LAX’s cargo tenants revolves around facilities, which it has for years, but as a historically dominant gateway, LAX shares many of the same challenges that long-term success has similarly imposed upon its most applicable US counterpart, New York’s JFK International Airport.

He notes: “Area development has long hemmed in the airport, such that any improvements must be made within a fixed envelope of land and any improvement therein must be accommodated within acceptable limits imposed by the competing needs of passenger operations and all other related activities.

“While cargo tonnage actually decreased between 2000 and 2015 (inclusive) – as it did at all but a handful of US airports – this only slightly mitigated the need for cargo facilities improvements.”

Vitale says the lack of overall cargo growth and the bankruptcy and/or acquisition of several former major cargo carriers has opened up capacity for new tenants, several facilities are “dated” and layouts decades earlier did not anticipate contemporary needs by cargo operators and the airport, in general.

He adds LAWA is meeting with cargo tenants to form as much consensus as credibly possible with regards to chronic challenges and potential opportunities for relief.