Air cargo volume gains altitude at LAX, Ontario.

LAX's volume rises 17.7%, Ontario's rises 11.4%

Exports through the Los Angeles Customs District's two air cargo facilities -- Los Angeles International Airport and Ontario International Airport -- jumped sharply in 1992 because of increased shipments to the United Kingdom, Australia and the Middle East, according to local airport officials and air freight companies.

Specifically, the volume of exports through LAX climbed to 272,717 metric tons in 1992, an increase of 17.7 percent from 1991, said Lee Nichols, a LAX spokesman.

Meanwhile, exports through Ontario rose to 158,313 metric tons in 1992, an 11.4 percent increase from the prior year, reported Diane Reesman, a spokeswoman for the Ontario facility.

Air freight, due to its high cost relative to land or sea shipment, has traditionally been perceived as a mode reserved primarily for high-value, light-weight components. But the growing volume of foreign-bound crates being lifted off from LAX and Ontario are filled with everything from helicopters to asparagus.

"Exporters are using air freight, where possible, to speed up transactions. The shipment gets there in a couple of days by plane, but it can take up to two months by ship," said Sylvia Montiel, export manager for Air Express International Corp.'s Long Beach office.

The exporter can lower its interest expenses on export financing by shipping by air instead of by sea, especially for high-value items. For instance, a company exporting a $1 million computer from Los Angeles to Australia would have to pay $15,000 to $20,000 in financing-related interest and fees to send the computer by sea, which can take up to two months. That relatively high interest cost would wipe out any savings the exporter would realize from the lower sea shipping rates, compared with air freight rates.

Of course, air freight is not the cost-efficient solution in all cases.

"For example, somebody who wants to ship a car to Rome would probably pay $4,500 to ship it by air. It would cost between $700 and $1,000 to ship it by water. But, (in the case of a car) when you sent things by ship, you have to worry whether or not they will corrode because of the exposure to salt water," Montiel said.

Perishable fruits and vegetables grown in the United States that are shipped to Japan have to be transported by air because they would rot in the four to six months it typically takes a ship to get from Los Angeles to Japan, Korea, Australia or any other Asian country, Montiel said.

L.A.'s air exports taking off
(metric tons)
Airport                        Year
                  1992         1991         1990
LAX            272,717      233,561      228,311
Ontario        158,313      142,051      146,944
Total          431,030      375,612      375,255
Source: Los Angeles International Airport

Companies that ship mechanical parts to Middle Eastern countries, particularly Peoria Ill.-based Caterpillar Inc., a maker of earth-moving equipment, were among those that increased their exports through the Los Angeles Customs District in 1992, Montiel said.

Other categories contributing to the increase in air freight export volume are computers and electronic components bound for Australia and Singapore, she added.

Korean Air, one of the top international air freight haulers between Los Angeles and foreign markets, flew 90,000 metric tons of exports from LAX in 1992, an increase of 8 percent from the previous year, said Bernard D. Akle, a Los Angeles-based manager for Korean Air's freight division.

Korean Air's export volume grew more slowly than the overall LAX export volume because Korean Air mainly serves Asia. Therefore, it did not benefit from the increased demand for American goods being flown to Europe and Latin America from LAX, Akle added.

Korean Air does not fly into Ontario International Airport.

Korean Air transports everything from California produce to helicopters for delivery to overseas buyers, Akle said.

"And when they (Korean Air planes) return from Korea, Japan, Australia and other Pacific Rim countries, they are filled with crates of stereos, televisions and other electronics," Akle said.

Korean Air uses 10 Boeing 747s to carry imports and exports between Los Angeles and various Asian markets, Akle said. Boeing is scheduled to deliver another 747 to Korean Air in 1994 and yet another in 1995, Akle added.

Meanwhile, another major air freight carrier in Los Angeles, Burlington Air Express, saw its export volume out of the L.A. Customs District grow to 23,636 metric tons in 1992 from 20,454 metric tons in 1991 and 18,181 metric tons in 1990, said Jerry Milner, Burlington's Long Beach-based export manager.

The United Kingdom is the fastest-growing destination for exports handled by Burlington's Los Angeles branch, Milner said. Burlington most often carries outbound electronics, computer, medical and aerospace parts through LAX and Ontario airports, he added.

Burlington Air Express also has experienced a steady increase in outbound shipments to Asia, Milner said.

Yet another local air freight company, Long Beach freight forwarder Air Express International, is expecting both exports and imports through LAX and Ontario airports will increase because cargo space on international flights still exceeds demand, said Dave Coggin, a manager for the company.

"But in the coming years, that will change. Space is already tight during the second and third quarters of most years. And, as air freight carriers start selling more of their own capacity in the coming years, less will be available to companies like Air Express that do not have their own fleets," Coggin said.

In contrast to the boom in L.A. air exports, exports by ship through the Port of Los Angeles edged up only slightly to 26.4 million metric tons in 1992 from 26.3 million metric tons in 1991 and 25.6 million metric tons in 1990, said Port of L.A. spokesman Jeff Leone.

The Port of Long Beach, meanwhile, reported 17.6 million metric tons of exports in 1992, up from 15.9 million metric tons in 1991, and 16.3 million metric tons in 1990, said Port of Long Beach spokeswoman Yvonne Avila.