within a three-mile radius has really tapered off,” according
to Luke Staubitz, a Los Angeles-based executive vice president at JLL (formerly Jones Lang LaSalle), the real estate
and logistics services giant. Staubitz, whose focus is LAX,
said he is not as familiar with the situation at other U.S.
gateways. However, he believes demand for close-in freight
space also remains soft at gateways like New York, Seattle,
Miami, and Dallas.
One exception is DHL Global Forwarding, a unit of the
DHL transport and logistics empire, and the world’s largest
air forwarder. The company’s buildings are located close
to all U.S. and North American air gateways, said Jannie
Davel, head of airfreight for the Americas. But there are
few airfreight firms with the volumes, resources, and needs
of the DHL unit. For the rest, locating as far as 15 miles
out is usually a better deal, according to Staubitz. Tenants
get more bang for the buck by having access to larger and
more modern buildings, while remaining close enough to
meet tight cutoff times for aircraft departures, Staubitz said.
(Anything beyond 15 miles is problematic for providers
because of the extra distance and the risk of traffic congestion, he said.)
While locations may change, the characteristics of the
prototypical airfreight facility remain the same. The standard structure is narrowly configured, with no more than
50,000 square feet of capacity under the roof and often less
than that. There is also a preponderance of dock doors. The
design is driven by the need for fast turns of relatively small
products of high value, the classic airfreight consignment.
“Everything is built [around] moving the freight as quickly
as possible” to hit airline cutoff times and keep the expensive stuff moving, Staubitz said.
CHANGING ATTITUDES
The flagging demand for close-in airport space has, to
some degree, mirrored air freight’s fortunes over the past
15 years. Two recessions in the last decade have reshaped
shipper attitudes toward air use. The first, between 2000
and 2002, led to the collapse of many information technology (IT) firms and upended the high-voltage growth plans
of the survivors, many of which had been major airfreight
users. The second, the so-called Great Recession, leveled
virtually every industry and led to unprecedented declines
in airfreight volumes.
The legacies of both downturns still haunt the industry.
Frugal shippers have migrated to more economical forms
of transport that focus on time-definite deliveries rather
than on the fastest transit possible. In the U.S. and Europe,
that has meant more road transport; between continents, it
has meant more ocean freight. These modes have improved
in speed and, most important in many users’ minds, reli-
ability. While there is always hope air freight can surmount
these seemingly secular obstacles and return to the glory
days of the 1990s, no one sees that happening.
Traffic gains are expected to remain in the low- to
mid-single digits for years to come, accompanied by one-
time or cyclical surges for the peak holiday season, the
Lunar New Year, new product launches, and diversions
from ocean freight during events such as the recent West
Coast port contract dispute, which helped drive February’s
global air volumes up 11. 4 percent year over year, accord-
ing to the International Air Transport Association (IATA),
the leading airline trade group.
Over the years, freight forwarders and others in the aircar-
go community have found themselves being pushed farther
away from airport gateways. Starting with security measures
following the 2001 terrorist attacks, it reached a somewhat
ludicrous crescendo last October when New York Gov.
Andrew Cuomo proposed relocating JFK Airport’s entire
cargo apparatus to Stewart International Airport, 60 miles
north of New York City, so the Port Authority of New York
and New Jersey, JFK’s operator, could use the freed-up
space to build hotels, shops, and restaurants for travelers.
The plan, much derided from the start, has gone nowhere.
Zablocki of Ceva said the shifts in site selection also
reflect changes in how the tenants themselves do business.
For years, it was common for a big forwarder to specialize
in one transport mode. Today, that same forwarder may
have evolved into a one-stop shop whose service menu
includes air, ocean, trucking, warehousing and distribution,
and customs brokerage. If an industrial complex houses
all of those services, it then behooves the company to be
centrally located near as many of them as possible, even
if it means being farther away from the airport, according
to Zablocki. “We are an end-to-end service provider, so it
makes sense to be in the middle of everything,” he said.
Forwarders also need to get creative in getting the most
from their facility space, Zablocki said. Ceva’s LAX facility,
for example, has been designated a free trade zone, a special geographic area where goods may be landed, handled,
manufactured or reconfigured, and re-exported without
the intervention of the customs authorities. Zablocki said
the operation has been effective in boosting the value of
LAX as a logistics center.
