October 5, 2008
LAX Cargo Traffic Sees 16% Drop
By Art Marroquin
The slumping economy and record-high fuel prices led to a 16 percent drop in air cargo deliveries at Los Angeles International Airport in August, compared to figures posted last year.The significant decline signals the possibility that retail outlets will sell fewer high-end gifts during the upcoming holiday season.
"We expect things to improve as we close in on Christmas, but given the current state of the economy, we probably won't see the same freight levels that we saw last year," said Mark Thorpe, director of air services for Los Angeles World Airports, the city agency that operates LAX.
A year-to-date assessment of air cargo shipments was not immediately provided by airport officials. Air freight was down a similar 14.6 percent at LA/Ontario International Airport, which is also owned by LAWA.
Computers, iPods, flat-screen televisions and other expensive goods typically shipped by air are now being placed on oceangoing vessels to the nation's seaports, according to aviation consultant Jack Keady of Playa del Rey.
Shippers are taking up the cost-saving measure in the wake of rising fuel costs.
"As economic times get harder, shippers would rather wait for a 10-day delivery by sea rather than a more expensive overnight shipment on a plane," Keady said.
Despite that assessment, cargo container shipments are down 9 percent this year at the ports of Los Angeles and Long Beach, which handle about 40 percent of the nation's goods.
Other West Coast airports are reporting similar drops in air freight. San Francisco International Airport's air cargo shipments dropped 15.1 percent in July, while Seattle-Tacoma International Airport was down 8.1 percent in August, compared to last year.
"The high-tech companies in the Silicon Valley and in Seattle are doing better economically than Los Angeles, which may be why LAX is experiencing more of a loss," said Eduardo Martinez, an economist with the Los Angeles County Economic Development Corp.
The sharp decline comes from the fact that Asian companies are cutting shipments as consumer demand drops in the United States amid the shaky economy, according to Martinez.
"It's becoming increasingly difficult for Americans to buy expensive imports, let alone goods at Target or Wal-Mart," Martinez said. "As long as we have slow economic growth and people keep losing their jobs, then people are going to buy fewer items."
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