E-commerce, integrators, location drive Inland Empire cargo growth amid pandemic

Even as the symptoms of COVID continue to wrack the air cargo community and the world, cargo operations in California’s Inland Empire region thrive, thanks to the rise of e-commerce, an advantageous location and active integrators. At least three Inland Empire airports, including Los Angeles (LAX), San Bernardino (SBD) and Ontario (ONT), have seen an increase in departures from integrators or an increase in year-over-year tonnage throughput in recent months. Integrators such as UPS and FedEx have continued to add flights at airports surrounding Los Angeles. At SBD, for instance, where UPS has had full-time operations since 2017, landed weight has increased exponentially, from 20 million pounds [9,072 tonnes] in 2017, to 181 million pounds [82,100 tonnes] in 2018, and finally 350 million pounds [158,57 tonnes] in 2019, according to Mark Gibbs, SBD’s director of aviation. UPS is running 23 departures per week from SBD, up 20% from this time last year, according to Gibbs. FedEx has also had a permanent leasehold at SBD since 2018, which has driven up UPS activity in an effort to remain competitive, Gibbs added. ONT saw 20% YoY tonnage growth in the first five months of 2020, according to a recent Fitch Ratings report. Two factors played a large role, said deputy CEO Atif Elkadi. “In conversations with our cargo partners, it’s clear that what we’re experiencing now is a much more fundamental shift toward online buying,” said Elkadi. “That had already been happening, but the pandemic has pushed the timetable forward — maybe by as many as five years.” Location was the other factor. “ONT is in the heart of one of the most vibrant supply chain corridors in the U.S.,” Elkadi said. “We also have the infrastructure and operational support to accommodate this kind of increase on a sustained basis.” Location also proved an important element in SBD’s success. The airport has “access to the entire LA basin,” said Gibbs. That geographical advantage, alongside the e-commerce-driven boost from integrators, has helped SBD stay afloat amid the pandemic while offering competitive rates for its partners. E-commerce and integrator partnerships haven’t been the only paths to recovery for Inland Empire airports, however. LAX experienced a YoY loss of tonnage throughput in the first five months of 2020 due to the loss of bellyhold capacity immediately following the onset of COVID, according to the same Fitch Ratings report. In January, for instance, tonnage was down 5.23% YoY. By May, it had begun to recover and was up 5.25% YoY. In July it was up 13% YoY, according to the airport’s air traffic comparison statistics. “Cargo operations at LAX increased over the summer, reaching a 13% increase in July 2020 compared to July 2019 as the federal government began expediting imports of personal protective equipment and other materials into the United States,” said a spokesperson for the airport. “Some airlines even converted passenger flights into cargo operations. LAX was also a receiving airport for the federal FEMA project bringing PPE from outside the country.” Neither ONT nor SBD predicts a downturn in fortune in the near future. “Last December was our best ever — 88,000 tons [40 tonnes] of freight was processed here, up nearly 20% from the year before. That was before the surge we’ve experienced since the pandemic, so based on that alone, we expect to see another strong peak season,” said ONT’s Elkadi. “The very rapid growth we’ve seen so far we expect to continue over the next several years before it levels off,” said Gibbs. Both airports also have the advantages of new and expanding partnerships to look forward to. At ONT, FedEx will be opening a new 51-acre facility this fall, three times the size of its current operations. Amazon Air is set to open a new regional hub at SBD, also in the fall.

E-commerce, integrators, location drive Inland Empire cargo growth amid pandemic

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