Aug - Sep 19

New Wave

A growing number of US airports are investing in improving facilities and processes and exploring cargo community systems and expedited customs clearance schemes, to facilitate cargo flows and stimulate new traffic, reports Ian Putzger

In early June, Worldwide Flight Services took out a long-term lease on a new cargo facility at Hartsfield Jackson Atlanta International Airport (ATL). The latest addition to ATL’s cargo infrastructure comprises of a 120,000 sq ft (11,000 sqm) warehouse, 20,000 sq ft of office space, freighter ramp handling facilities, and a container bypass handling system. The set-up includes 2,500 sq ft of cooling facilities.

At Chicago Rockford International Airport, the expansion of a facility handling Amazon’s traffic is scheduled to be completed in July. This brings the e-commerce giant’s footprint at RFD to nearly 200,000 sq ft, notes cargo director Ken Ryan.

Ted Stevens Anchorage International Airport plans to build a new cargo warehouse as well as parking stands for widebody freighters. The parking positions and the first phase of the warehouse are expected to be ready in 2020, according to airport director Jim Szczesniak.

Michael Webber, associate vice-president at aviation planning and development firm Landrum & Brown, sees a broad move to cargo development at US airports after a long hiatus due to a lengthy spell of overcapacity. “Now, after years of solid growth, it seems spigots are beginning to open a little bit. We start to see ideas that were put on ice come back,” he remarks.

According to CBRE, a large commercial real estate services and investment firm, demand has outstripped capacity growth in warehousing in the US since 2010. Airports, notably major gateways, have been struggling to cope with cargo throughput.

The rise in volumes over the past two years has revealed how tight cargo capacity at many airports actually is. Vacant cargo buildings in the wake of the disappearance of domestic all-cargo operators like Kitty Hawk, BAX Global or Emery Worldwide had created the impression of ample spare capacity, but eventually the realisation dawned that most of these are outdated buildings that have to be torn down, as they do not meet the requirements of a 21st Century operator or customer like Amazon, says Webber.

Among other shortcomings, older buildings have the wrong types and numbers of truck doors, which reflects that requirements have changed as much landside as airside. At many airports, especially the congested legacy gateways like LAX and JFK, truck access is as much of an issue as airside productivity, if not more so.

Access challenges

Webber says access to the cargo areas is highly challenging, as airports have little control over this and need to work with city and state authorities, which may have conflicting priorities.

Emir Pineda, manager, aviation for trade and logistics in the marketing division of the Miami-Dade Aviation Department, agrees. “Truck access is a challenge. In peak times, it is difficult for truckers to get in and out,” he says. To improve truck flows Miami has identified a parcel of land to develop a dedicated truck staging area.

Atlanta set up a staging area for truckers going to its south cargo area in the spring of 2017. Some forwarders and truckers had avoided the airport because of long wait times in the area.

Cargo community systems

Now the airport authority is moving to leverage technology for smoother truck flows. It has tasked Kale Logistics with the development of a platform that can serve as a cargo community system for the airport and its users. A few handlers, airlines and forwarders have agreed to take part in a pilot phase, which is expected to run until the end of the year, before the platform will be thrown open to other users early next year, according to Elliott Paige, the airport’s director of air service development.

While managing truck flows and access to the cargo terminals is the first thrust of the initiative, ultimately it will extend to other aspects to become a cargo community system.

“We are trying to build something like Air Cargo Netherlands in the Atlanta environment,” says Paige. This would extend even beyond a platform for the local air cargo community to include connectivity to US Customs & Border Protection and other government agencies.

“Customs were very excited when we introduced the project. They will be able to see what’s on an aircraft, which is great for the security aspect, especially as regards e-commerce,” says Paige.

While the airport authority has been the driving force in this endeavour, it will not own the platform. “It is driven by the private sector. The airport is supporting it,” says Paige.

Atlanta will be the first North American airport with a community system in this century. Some 30 years ago, when community systems were first springing up utilising EDI links, New York and Miami established such platforms, but these attempts failed.

“Government agencies were not ready to integrate into non-government systems at the time,” recalls Pineda.

Now Miami is thinking of having a second go. “We’ve had some discussions on a community system. So far, it’s not gained the traction I’d like to see. We’re so big, there’s so much infrastructure already developed,” says Pineda, adding that the airport authority would be facilitating the undertaking, not provide the platform.

At Dallas/Fort Worth International Airport John Ackerman, executive vice-president of global strategy and development, also sees merit in a community platform. “We’ve been talking to a couple of air cargo clouds like Brucloud. We aim to have something this year that will allow everybody to plug in and link in to the data flow,” he says.

No decisions have been taken yet, but he reckons that the backbone will be an agnostic platform. The development of individual apps like a truck queuing module will be left to others, he says.

Webber thinks it’s time for US airports to move on this front, pointing out that some seaports have had elements like truck scheduling apps for years. Still, the technology is only part of the undertaking, he notes, especially if the system involves some kind of truck call-forth system.

“You can have a platform, but you still need some undeveloped land with some access to the cargo area,” he says.

Shift in attitudes

The push for cargo community systems is perhaps the most tangible manifestation of a shift in North American airports’ attitudes towards a more proactive stance in cargo. Ackerman points out that there are some things which only airports can do.

For example, DFW is eager to develop traffic flows. Last October it signed an MoU with Aeroports de Paris to build traffic between the two gateways. There are cargo flows between the pair already, but the partnership aims to develop other streams that have potential, says Ackerman. He points to the oil and gas sector and the luxury goods bracket, noting that Louis Vuitton had put up a manufacturing plant south of Dallas.

Atlanta recently launched a partnership agreement with Amsterdam that aims to build a trade and logistics corridor between the pair. The US airport can draw on the experiences of Amsterdam Airport Schiphol with elements like its Cargonaut IT platform or the Air Cargo Netherlands cargo community initiative, says Paige.

“Once we get this going, I’d like to replicate this with others, particularly in China,” he continues, pointing out that ATL has a sister airport agreement with Shanghai Pudong and that China is the second-largest trading partner for Atlanta.

Miami has eschewed formal agreements, but it has been working closely with several international airports, such as Singapore Changi. “We try to develop closer relationships with airports in China,” remarks Pineda.

Freighter focus

Not surprisingly, airports with a strong freighter focus have also been actively pursuing new trade lanes. Rockford has established a strong relationship with Leipzig, to where it is connected by DHL and AirBridgeCargo, says Ryan. The Columbus Regional Airport Authority, under whose wings Rickenbacker airport operates, has been working closely with China’s Zhengzhou airport. The pair have a co-operation agreement, but this has not yielded a direct freighter service so far.

In many cases these joint efforts focus on particular market segments or commodities. In Miami’s collaboration with Changi, pharmaceuticals have been a major component. Both airports are members of the Pharma.Aero group, but so far they lack a direct connection.

“We’re working on developing trade lanes with CEIV-certified airports,” says Pineda.

At DFW, Ackerman is eager to leverage the recent attainment of CEIV accreditation. “We’ve had some preliminary talks with airports that are also CEIV certified. It’s not the industry standard that everybody demands today, but we believe it’s moving in that direction,” he says.

For now, he wants to focus on this and not pursue another accreditation; but further on, the CEIV Fresh concept for perishables is of interest to him. In order to set itself up as a transit point for air cargo flows between Latin America and Asia, DFW has deliberately pursued perishables traffic and established a temperature-controlled air freight terminal, operated by Dnata.

Perishables flows

Anchorage is also having some success with perishables flows to Asia. One forwarder has set up a seafood refreshing tank at the airport to move king crab through Anchorage, reports Szczesniak.

He is looking to go after large, time-sensitive products like aircraft engines and landing gear. Taking advantage of Anchorage’s location, manufacturers and carriers could store such items there rather than use expensive warehouse space in Shanghai, he argues.

Along similar lines, European auto manufacturers could use Anchorage to move parts to assembly plants in Mexico. For this reason, he is eager to attract a freighter connection to Europe.

Rickenbacker has seen “quite a bit of charter activity” for the automotive industry, reports chief commercial officer David Whitaker. A recent focus for the airport authority has been the live animal sector. Last summer it modernised and expanded its animal facility, adding 12 new animal stalls. It subsequently obtained US Department of Agriculture status for the building as a certified export inspection facility and a permanent port of embarkation for livestock, which has garnered some new traffic flows.

E-commerce initiatives

Predictably e-commerce has been a major target for a number of airports. Miami has an e-commerce task force. “Our goal is to make Miami the hub for e-commerce for the Americas,” says Pineda.

The airport took a huge step in that direction when the Brazilian authorities gave their blessing to an agreement between Miami and Correios, the Brazilian postal service, under which the airport has been designated an external customs entry point for e-commerce headed to Brazil. Under Correios’s ‘Compra Fora’ (Buy Outside) programme, Brazilians can order goods online from anywhere in the world using a special code, which automatically triggers a routing through Miami, where the goods are pre-cleared and flown to Brazil. Arriving there, they are treated as domestic cargo, resulting in much faster delivery.

According to Pineda, this has already ballooned to thousands of individual shipments, and he expects further growth as large platforms integrate with the programme.

“Other countries in Latin America are looking at similar concepts,” he adds.

Customs clearance is seen as a critical element to build up a role as an e-commerce gateway. Rickenbacker is pursuing an expedited clearance scheme with the US duty authority, and Rockford is moving in the same direction.

“We have talked with customs about expedited customs clearance. You have to have that,” says Ryan.

Ackerman is targeting a chunk of the US where so far no airport has CBP-approved e-commerce facilities. “We’re talking with CBP to get DFW designated for the Texas region,” he says.