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Cargo project at LAX airport put on back burner, official confirms

LATAM Airlines cargo plane at Los Angeles International Airport

LOS ANGELES – A long-overdue modernization of crowded and obsolete cargo warehouses at Los Angeles International Airport (LAX) has been shelved for 18 to 24 months because the number of major construction projects, mostly focused on passenger operations, is too overwhelming for the airport authority to manage at once and would negatively impact the local community, an airport official said at a stakeholder event Tuesday evening.

Considering the amount of time it can take to receive permits for big infrastructure projects, the news suggests that the first new cargo facilities able to relieve some of the current capacity pressure won’t open for business for at least another decade.

Addressing about 200 freight forwarders at a “town hall” meeting near LAX on Sept. 24, Ramon Oliveres, director of property services at Los Angeles World Airports (LAWA), said a new Request for Proposals to redevelop 29 cargo facilities scattered around the airport would be issued within two years and that it could take another three years “to actually put a shovel in the ground for the first development.”

But environmental impact statements for large infrastructure projects often take years to complete because of the complex analysis involved, limited inter-agency coordination and community feedback required, which could push back the timetable even further.


“To put it bluntly, there were just too many projects, too many impacts that were going on at the same time to allow all these projects to proceed forward uninterrupted to completion,” Oliveres told the industry audience. “A decision had to be made about which project would go first and which would go last. And I can’t tell you how disappointed that I personally was in the ultimate decision to postpone the cargo project because for 30 years [during my career here] I believe we have not spent enough focus on cargo operations at LAX.”

Those projects include a multi-billion dollar effort to build an elevated People Mover train, intermodal passenger transfer station, centralized car-rental facility, new concourse and new passenger terminal, plus taxiway improvements. 

A LAWA spokesman previously told FreightWaves that planning for a new cargo city had been postponed until 2021 https://www.freightwaves.com/news/town-hall-to-focus-on-mounting-airfreight-bottlenecks-in-l-a, but didn’t provide any reasons.

“I’ll be out of business by that time because it’s going to cost my customers much more money to recover their cargo,” Richard Schleicher of Automated Cargo Transport Service, a mom-and-pop forwarder in the audience, complained. He was alluding to the ongoing delays at cargo facilities that often result in truck wait times of several hours.


LAX is the second-largest U.S. airport in terms of passenger boardings, and third-largest in cargo tonnage (not including the FedEx and UPS hubs in Memphis and Louisville).

Analysts and local industry representatives said LAX shouldn’t assume that shippers will never divert cargo just because concepts to shift traffic to underutilized, alternative airports has not materialized so far. LAX will always be a major international freight gateway for Asia trade, but incremental growth could slip away, they said.


Low-hanging fruit

Several speakers stressed that the industry can’t wait for LAWA to solve cargo backlogs with expensive infrastructure upgrades when there are so many operational inefficiencies that the airport supply chain has not addressed. They said there needs to be more collaboration and coordination between forwarders, trucking companies that make transfers for them, and the multi-tenant ground handling services that operate cross-docks for the airlines.

The lack of visibility about the status of a shipment means truckers show up unannounced at a warehouse and wait while payments and documents get processed, which has to be done before workers even start to locate shipments in the crowded warehouse and separate them from consolidated loads.

Mercury Air Cargo, which operates five public warehouses at LAX, has been beta testing an online appointment system from Cargo Sprint that will have multiple portals to verify Customs clearance, check cargo availability, electronic pay terminal handling fees and reserve a dock door. 

The goal is to move all trucks picking up import cargo to the system by the end of October, Chief Operating Officer John Peery said.


“We will pull the freight two hours in advance and say ‘Show up at Dock 22 at 10:00 a.m.’,” he told the audience.

Some recommended that all facilities get on the same system to standardize exchanges, otherwise any automation benefits could be undermined.

Peery stressed that the air cargo community needs to adapt traditional ways of doing business. “The culture has to change. We have limited space and we have to be more efficient. That means every stakeholder has to take part in the responsibility.”

Airport tenants also said they were starting to look harder at other creative solutions to the congestion problems. 

Mercury is studying the possibility of shuttling loose import cargo – the kind that needs to be broken down from multi-customer skids – to a roomier facility outside the airport gate, which would minimize truck trips on Century Blvd. because they would be fully loaded compared with many that show up for a small shipment, Peery said.

And American Airlines, which has its own 50,000 square-foot dedicated facility, is so concerned about crowding that it’s considering expanding into a former U.S. Airways building for which it already holds the lease, Joe Goode, the western director for cargo sales, said. Shippers are complaining and “we’ve got to do something,” he told FreightWaves.

Infrastructure challenges

Oliveres said criteria for the new RFP likely will change from one issued last year, which included a developer option for a consolidated, double-decker cargo complex. The lack of space to efficiently move freight is so immediate that a more likely option is to greenlight smaller projects throughout the complex and it may not include a vertical component. 

Adding new cargo capacity at LAX is extremely challenging because the airport is closed in on all sides by existing neighborhoods and the Pacific Ocean and doesn’t have any idle space where operations can be relocated while existing facilities are overhauled, said Michael Webber, associate vice president of airport planning consultancy Landrum & Brown. 

“At most airports you have the luxury of empty chairs because you’ve got plenty of Airborne Express, Emery Worldwide, BAX Global and Kitty Hawk buildings,” he said. “At LAX, you don’t.”

A giant, two-story cargo facility would require a lot of aircraft ramp space, he noted.

Webber, who has been an advisor to LAWA for 20 years, dismissed the idea that the airport authority is giving cargo short shrift, noting that the biggest segment of cargo business comes from carriers such as Singapore Airlines and China Airlines that carry cargo in passenger planes as well as dedicated freighters.

“The economics only work out if you’ve got [space] for both. So, LAWA knows very well that they can’t be great international passenger gateway unless they take care of cargo. It’s not a matter of prioritization,” he said.

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, he was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]