Can Ontario airport count on cargo growth?

Ontario International Airport has seen a significant increase in both its passenger and cargo traffic. The airport handled close to 470,000 passengers in January, including more than 45,000 international travelers. While the increase of almost 10% in passenger traffic from the same month a year ago is impressive, it is the airport’s recent success in its cargo volumes that stands out. According to the Federal Aviation Administration, in 2022 ONT was the ninth-leading cargo airport in the U.S. and third in the West, trailing only Anchorage and LAX.

The large amount of cargo passing through the airport is driven by the Inland Empire’s robust logistics industry. The region’s proximity to the ports in Los Angeles and Long Beach and to large population centers, and its supply of relatively inexpensive real estate for distribution and fulfillment centers, make it a natural logistics hub. The airport’s location near the intersection of the 10 Freeway from Los Angeles to Phoenix, the 15 Freeway connecting San Diego to Las Vegas and the 60 Freeway makes it an integral part of that industry.

Shipments by air through ONT are critical to meet warehouse and logistics demands, as e-commerce sales grow at the expense of traditional brickand-mortar sales.

Logistics has become the second-largest employer in the Inland Empire, trailing only health and private education by roughly 5,700 workers. Roughly 1 in 6 workers in the Inland Empire is employed there, an outsized number of local residents. Amazon, which operates fulfillment centers in the area and runs many cargo flights each day through the airport, is the region’s largest private employer.

Across the nation, the logistics industry has not continued to expand at the rate it did during the COVID-19 downturn and the subsequent initial recovery, analysts say. The number of workers employed in the region in the logistics sector stood at 265,000 as of July 2023, down 20,000 from its peak in December 2022.

This drop is visible in data from Ontario airport, where cargo shipments declined 17% in 2023 from the year before. From 2007 to 2015, the volume of freight at ONT grew slowly, hovering around half a million tons each year, before growing 81% by 2020 when the volume of freight passing through the airport peaked at close to 925,000 tons.

Such is the importance of freight to the airport that it could be argued that as passenger volume fell during the pandemic, the surge in freight saved the airport. Steve Lambert, an airport spokesperson, said ONT had earned a reputation as one of the nation’s stronger air-cargo centers and had the infrastructure required to handle the increase in cargo volumes during the pandemic period. But as consumers have returned to in-person commerce and shifted some of their spending from buying goods back to consuming services, the volume of freight has declined year over year since 2020. The airport recorded 753,000 tons in 2023, roughly comparable to 2018-19 levels.

Ontario airport’s prowess and significance as a cargo hub is made clear when we compare it with John Wayne Airport, or SNA, in Orange County. Though SNA records higher passenger volumes, the amount of air cargo it handles is dwarfed in comparison to Ontario: ONT came close to cracking 1 million tons of cargo during its peak in 2020, but SNA during the last 10 years has failed to record more than 20,000 tons annually. Since 2014, SNA has displayed consistency, passing between 17,000 and 20,000 tons of cargo each year.

Bob Hope Airport, also known as Hollywood Burbank Airport, or BUR, a third regional airport in Southern California, resembles ONT more when looking at passenger volume. It also handles freight but at far lower volumes compared to ONT. Burbank consistently recorded between 53,000 and 56,000 tons of cargo from 2014 to 2021. That number dropped by 10,000 in 2022 and 7,000 more in 2023.

The disparity in growth rates of freight year on year between ONT and its neighboring airports clearly demonstrates Ontario’s importance in cargo operations. Though all three airports saw growth in freight during the pandemic, Ontario’s freight volume increased by more than 15% in that period. Even prior to the pandemic, the airport was recording significantly higher growth rates than SNA and BUR from 2014 to 2020, and only after freight began returning to pre-pandemic levels was SNA able to record a better growth rate than ONT. Despite the recent decline, ONT still fares better than BUR, which has seen a drop in cargo of more than 15% in both 2022 and 2023.

As consumer habits shift back toward in-person goods and services, and corporations scale back investment in expansion and warehousing plans in response to lower demand and heightened environmental concerns, is the period of growth for freight at ONT coming to an end?

Perhaps the biggest threat to growth in the region’s logistics sector — and cargo volumes at the airport — is the rising local opposition to new warehouse construction. In recent years, three Inland Empire cities have blocked warehouse projects. In October 2022, Beaumont rejected a proposal for a warehouse complex of some 2.5 million square feet. Last year, Moreno Valley rejected a proposed 1.3 million square feet warehouse complex, and Fontana turned down a proposal for three warehouses covering more than 500,000 square feet.

Some environmental activists and other critics of the logistics industry see a turning of the tide. But with the logistics sector’s importance to the Inland Empire economy, it remains to be seen if Beaumont, Moreno Valley and Fontana are harbingers of the future or outliers. Note that there are other areas lining up to take over freight traffic if the opposition gains in strength. Kern County already has large warehouse complexes near the 5 Freeway in the Grapevine, and there are plans for a 1 million-square-foot warehouse complex 30 miles west of the Bakersfield airport.

Kenneth P. Miller is director of the Rose Institute, professor of the department of government at Claremont Mckenna College and a senior fellow at the Inland Empire Economic Council and Inland Empire Economic Partnership. Nikhil Agarwal is an analyst at the Rose Institute of State and Local Government at Claremont Mckenna College. The Inland Empire Economic Partnership's mission is to help create a regional voice for business and quality of life in Riverside and San Bernardino counties. Its membership includes organizations in the private and public sector.