Last month, executives with Los Angeles World Airports, the city agency that runs LAX, sent out a request for proposals from private cargo facility developers to reimagine cargo operations at the airport, ultimately replacing more than two dozen aging facilities that have increasing difficulty handling higher air cargo volumes brought about by the pandemic.

“This is a project that’s long overdue,” said Terri Mestas, chief development officer with LAWA. “There’s a tremendous need to upgrade our aging cargo facilities.”
While there’s no definitive price tag on this modernization effort, Mestas said the cost will go into the hundreds of millions of dollars, “at the very least.”

The airport authority initially set out to redevelop LAX cargo buildings in 2018 and even solicited proposals from the private sector. But just after four companies or teams of companies had sent in their proposals, airport officials decided to postpone the effort out of concern it might interfere with the billions of dollars in modernization projects, including terminal improvements and the automated people mover.

But during the hiatus, the need for a cargo facility overhaul became more urgent as air cargo hit record volumes during the pandemic. Last year, LAX handled nearly 3 million metric tons of cargo, up 21% from 2020 and 28% from pre-pandemic 2019.

The increase was driven in part by emergency shipments of medical protective gear and vaccines related to the pandemic. Also contributing were supply chain disruptions and port congestion that forced shippers and their customers to shift to air cargo for the most urgently needed products.

All of this additional cargo further strained an already stretched system, according to Kent Hindes, a managing director overseeing supply chain professional logistics and industrial services in the Ontario office of Chicago-based Cushman & Wakefield.

The 27 existing cargo facilities are spread out over three acres at LAX; some were built in the 1950s, as the airport was beginning its transformation from a regional airfield to an international travel hub.

Hindes said these oldest cargo facilities lack multiple doors to speed the movement of cargo into and out of the buildings, which leads to frequent bottlenecks. In addition, the spread-out nature of the buildings makes for longer truck trips to carry the cargo out of the airport complex, including detouring around a major airport runway.

“The way cargo facilities are deployed now leads to frequent delays,” Hindes said. “There’s no question the need to modernize is urgent, and, as I talk to some people responsible for moving cargo, super-critical.”

What’s more, Hindes said, the older buildings do not have the ability to accommodate the increased automation and data management that has taken place over the last couple of decades.

“Today’s modern cargo buildings have larger, perfectly flat pathways with grooves and sensors to speed the movement of robotic cargo devices,” he said. “You just can’t put this technology into 60- and 70-year-old buildings; you have to build new facilities from the ground up.”

Hindes said LAX is hardly alone facing this predicament. He noted cargo modernization projects are planned or under way at several of the country’s major airports, including Atlanta’s Hartsfield-Jackson International Airport, New York’s John F. Kennedy International Airport and Miami International Airport. Some new cargo terminals have already opened at Chicago’s O’Hare International Airport.

But with LAX’s cargo overhaul on hold, some cargo movement operators had to innovate on their own.

At Mercury Air Cargo – once the largest independent cargo-handling company at LAX and now poised to become a unit of Singapore-based SATS Ltd. – efforts were made in late 2019 and throughout 2020 to reconfigure space and install some features to accommodate automation in its cargo buildings, according to a blog post at the time from Mercury President John Peery.