With air cargo movement at Los Angeles International Airport last year reaching a record level, airport officials are moving ahead with plans to build the first of several facilities aimed at consolidating cargo operations at the airport.
The Century Cargo Redevelopment project calls for a two-story, 450,000- square-foot facility to replace 200,000 square feet of current cargo space in several buildings on the airfield just south of Century Boulevard. The project, still in a preliminary phase, is estimated to cost between $325 million and $450 million; costs and the scope of the project will be refined in coming months as prospective bidders submit preliminary concept designs.
This is the first of what airport officials say will be several new consolidated multi-story facilities designed to increase cargo storage and make for efficient movement at the crowded airfield.
It is the first planned cargo facility at a major U.S. airport to call for more than a single story.
“This facility is one of a series we’ll be phasing in over the next several years to consolidate air cargo operations into fewer and larger dedicated facilities,” said John Carver, deputy chief development officer for Los Angeles World Airports, the L.A. city agency that runs LAX.
Record territory
The plan is moving ahead just as 2.16 million metric tons of cargo moved through the airport last year, up 8 percent from 1.94 million metric tons in 2016, and surpassing the previous record of 2.04 million metric tons set in 2000.
The 8 percent growth last year – double the national average – pushed LAX’s cargo capacity processing rankings up one slot last year to No. 13 globally from No. 14 the previous year and to No. 4 nationally from No. 5 the previous year, according to data from Airports Council International.
The trend has continued this year – LAX handled 565,163 metric tons in the first quarter, up 4.1 percent from a year earlier.
Hong Kong was the top-ranked global cargo airport, while Memphis International Airport – home base for Federal Express Corp. – was the top-ranked nationally and No. 2 globally.
More than 1,200 of the 1,700 or so flights per day at LAX bear cargo, and more than half of them carry international shipments. Cargo includes shipments sent in the bellies of passenger aircraft or on one of the dedicated cargo airlines – mostly operated by Fed-Ex and DHL International of Bonn, Germany – that use LAX.
One of the main factors behind the increase in cargo in recent years is the growth of online commerce, according to Dan Muscatello, associate vice president with Landrum & Brown, a Cincinnati, Ohio airport consulting firm.
“Globally, e-commerce is driving the increase in cargo shipments,” Muscatello said. “More of the individual products people order are now coming from places like China and other East Asian countries, often through websites” such as Alibaba Group Holding of Hangzhou, China.
Another factor, according to both Muscatello and Carver, is the increasing use of larger aircraft such as the Airbus A-380, which has up to 540 passenger seats.
“The larger the aircraft, not only can you move more passengers, but you can also fit more cargo into the belly of the aircraft,” Carver said.
Muscatello added that shockwaves that hit the airline industry after the Sept. 11 terrorist attacks led many carriers to find ways to squeeze more cargo into the bellies of passenger planes as a way to offset a prolonged dip in passenger revenue.
“Prior to 9/11, typically only about 15 percent of the belly space was used for cargo,” he said. “Now, on many routes, at least one-third of belly space is devoted to cargo.”
All this means more cargo to ship and more space available on planes to carry the cargo.
The increases in air shipments and changes airlines have made to handle them have left cargo infrastructure at LAX cramped and outdated, Carver and others said.
Space squeeze
LAX has more than 2.1 million square feet of space devoted to air cargo in 29 separate facilities across 194 acres. LAX’s 3,500 acres of territory makes it among the smallest of major U.S. airports – Atlanta’s Hartsfield-Jackson Airport, by comparison, takes up 4,700 acres. The space limitations and having relatively smaller cargo facilities scattered around LAX have meant more congestion and delays for cargo movement.
Most of the cargo facilities at LAX are operated by the airlines, including a number major U.S. carriers such as American Airlines Inc. of Fort Worth, Texas and Delta Air Lines Inc. of Atlanta, and a handful of international carriers, including Korean Air Lines Co. of Seoul, South Korea and China Air Lines of Taipei, Taiwan.
But many international carriers and a growing number of domestic airlines use shared cargo space operated by a third party.
The largest of these third-party operators at LAX is Mercury Air Cargo, a unit of Torrance-based Mercury Air Group Inc. Mercury Air Cargo handles roughly one-fourth of all cargo moving through LAX, according to Joseph Czyzyk, chief executive of Mercury Air Group. Mercury also operates the largest refrigerated facility at LAX.
Mercury Air is one of three parties that so far have submitted qualifications to airport staff to bid on the Century Cargo Redevelopment project.
Czyzyk said LAX has long lacked any sort of master plan for cargo facilities, which has made for inefficient use of space. Also, he said, no new cargo facilities have come on line at LAX since the early 1990s and some of the buildings date back to the launch of LAX in the early 1950s.
“Most of the facilities cannot easily accommodate today’s larger aircraft and many are converted hangars with only one entrance/exit and space that extends way back from that point,” Czyzyk said. “That causes major logjams in cargo movement.”
He said newer cargo facilities have at least two openings and are narrower so that cargo doesn’t have to move as far to get to an opening. That reduces the overall time needed to move cargo containers.
“We need to improve efficiency in cargo movement and that means we need to replace the hodge-podge of buildings for air cargo at the airport with newer buildings able to accommodate larger trucks and aircraft,” Czyzyk said.
