State Seeing Drop in Air Cargo, Report Says

Fewer goods are being imported and exported by air through California because of traffic congestion around the state’s airports and cheaper direct flights to other states, according to a report released Wednesday by the Public Policy Institute of California.

The total share of U.S. airborne trade handled by Los Angeles’ and San Francisco’s international airports fell to 21% from 38% from 1995 to 2002, Jon Haveman, co-author of the report, said in a telephone interview. Half the decline is attributable to shippers choosing other routes, partly because of congested ground traffic, he said.

“The primary issues constraining California’s airports revolve around congestion beyond the airport gate and limitations on the expansion of facilities,” the report said. “For LAX and SFO, the primary constraint is passenger traffic on nearby highways.”

The combination of manufacturing facilities moving away from California and falling air freight costs makes it feasible to bypass the state to reach destinations such as Savannah, Ga., and New York. That raises the possibility that airborne trade may one day bypass California altogether, the report said.

“We have been losing some competitive edge in California for years because of the cost of doing business here,” said Brett Roberts, president of Omni Pacific Co. in Walnut Creek, which exports food and beverages to Asia and Europe.

The state’s airports and seaports move about one-fifth of all U.S. international trade that is transported by air, water and land, Haveman said. About $110.3 billion in merchandise passed through Los Angeles and San Francisco airports in 2002 -- less than half the $228.7 billion in goods handled by the ports of Los Angeles, Long Beach, Oakland and Hueneme a year earlier, the report said.

Another reason shippers are going elsewhere is that Northwest Airlines Corp. and FedEx Corp. have expanded distribution centers in Anchorage since 1995, Haveman said.

Imports of laptop computers from Japan are now more likely to arrive in New York than in California, and Anchorage in particular is becoming an increasingly popular distribution point for laptops that enter the U.S., the report said.

California, especially San Francisco, has dropped in exports of electronic parts and accessories to the Philippines, Malaysia, Singapore and Japan. Many such exports now originate in Boston, Dallas, New Orleans and New York. Imports through California of computer and office equipment from Asia also have declined, the report said. San Francisco’s drop in airborne trade is larger than Los Angeles’, the study said.

The Public Policy Institute was established with an endowment from Hewlett-Packard Co. co-founder William R. Hewlett, who died in 2001. The San Francisco-based private nonprofit group uses research to influence statewide policy.

The report’s other author is David Hummels, an associate professor at Purdue University in West Lafayette, Ind.