New Refrigerated Warehouse Aims to Heat up Import Market
By Ronald D. White, Los Angeles Times
November 29, 2011
Those Argentine blueberries and Colombian roses at your local market probably took a lengthy detour on their way to Southern California.
Chances are, they entered the U.S. through Miami International Airport and arrived in California after a cross-country truck trip that took three days. Now, a new refrigerated warehouse just east of Los Angeles International Airport may help the region grab a bigger — and fresher — slice of the business of transporting items with a limited shelf life.
"There is ample room for Los Angeles to grow in moving perishables," said David A. Herbst, executive vice president of Mercury Air Group Inc., which unveiled the 16,000-square-foot warehouse Monday. The facility "can handle 100 tons a day and bring in $90 million annually in revenues."
Southern California dominates maritime freight, with the ports of Los Angeles and Long Beach handling 40% of the nation's Asian imports. The neighboring ports make up the largest cargo container complex in the U.S., and the international trade industry employs more than 500,000 people in the Southland.
But Miami International, by virtue of being the shortest major air route between the U.S. and South America, is king of perishable products.
Miami International handled 73% of the more than 181,000 tons of fruit and vegetables imported to the U.S. by air last year, according to Los Angeles World Airports, the city department that operates LAX. In flower imports, which are predominantly roses, the Miami airfield was even more dominant, receiving 89% of all U.S. imports last year.
By contrast, LAX came in third in fruit and vegetables, behind Miami and New York's John F. Kennedy International Airport, with a 5.02% share. LAX was second in flower imports, with a 4.91% share.
The region is so far behind that the opening of the new facility increased the area's refrigerated warehouse space for air freight by 35.5%, said Victor J. Adducie, general manager for Apollo Freight, a subsidiary of Mercury Air Group.
That is perhaps why the ribbon-cutting ceremony for Apollo Freight's new refrigerated warehouse was considered important enough to attract a member of Congress — Rep. Janice Hahn (D-San Pedro). Standing in for the traditional ribbon was an ice sculpture, which was smashed using sledgehammers wielded by Hahn and Libby Williams, managing director of Los Angeles Mayor Antonio Villaraigosa's office of economic and business policy.
"This is a first for me: I'm here to open a freezer," Hahn joked, later adding, "This is about jobs and trade and commerce. This is going to help us capture a greater share of the market for perishable items."
The new refrigerated facility is what the region needs if LAX is to improve its meager share of air freight in perishables, said Jock O'Connell, international trade advisor for Beacon Economics.
"A number of airports are trying to take some of this business away from Miami," O'Connell said. "New Orleans has been making a grab. So have Atlanta and Phoenix. This is something that Los Angeles has got to do if it wants to attract this kind of business."
Overall, LAX ranked third in total air freight value last year, at $77.4 billion, behind JFK ($159.6 billion) and Chicago O'Hare International Airport ($110.8 billion), O'Connell said.
The new refrigeration facility was built inside an existing 37,000-square-foot warehouse over three months at a cost of about $900,000. It opened for business in October.
On Monday, Apollo Freight Chief Operating Officer Ivo Skorin took visitors on a chilly tour of the facility, which was holding watermelons, dates, blueberries, cauliflower, tomatoes and several crates of roses.
The area outside the freezers, leading from the loading docks, is kept at a crisp 47 degrees, Skorin said.
"You have to maintain the cold chain throughout," he said. "It's important for the health of the produce."
The flight to LAX from South America is longer than the flight to Miami, but it eliminates the long truck drive across the country. And time is important when dealing with a fast-aging product. "Our objective," Adducie said, "is to get it in here and move it out as fast as possible."