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Home Supply Chain Updates

Cargo airports fly with e-commerce

usscmc by usscmc
December 27, 2019
Cargo airports fly with e-commerce
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Montreal’s Mirabel airport is gearing up for some infrastructure improvements.

Canada’s federal government and the local airport authority have pledged to contribute altogether C$107m ($81.24m) to the project, which will go towards the construction of a 20,000 sq m cargo terminal, new parking positions for 13 freighters and improvements in road access to the airport.

According to Aeroports de Montreal, which manages the city’s airports, the project is scheduled for completion by the end of 2022.

Mirabel had been Montreal’s international airport, but in 2004 all passenger traffic migrated to Dorval, which is closer to the city, leaving Mirabel to cater for cargo and aviation-related businesses like aircraft manufacturer Bombardier.

The airport was often derided as a white elephant, but the cargo business has been thriving there. In 2018 it climbed 11% to reach 107,660 tonnes.

Canadian all-cargo airline Cargojet, which in the main performs line haul across the country for the parcel industry (carrying the traffic of all major integrators as well as Canada Post), has built up its presence at Mirabel to six nightly departures plus one morning flight, reports executive vice-president Jamie Porteous.

When the new cargo building is completed, the airline will move there, Porteous says. He adds that the more pressing issue is ramp space.

At its hub in Hamilton near Toronto, Cargojet has acquired a hangar adjacent to its own one. Currently it is occupied by DHL, which performs parcel sorting activities there. It will continue to lease the facility from Cargojet until it has completed the construction of a C$100m building that will quadruple its footprint at the airport. DHL’s Canadian shipments have doubled since 2014.

Cargo airports have clocked up impressive growth. Chicago Rockford, which posted 55% growth in 2018, has been the fastest growing airport with throughput in excess of 250,000 tons, according to the Airports Council International.

“In the 1990s everybody talked about a need for alternative gateways, but then the bottom fell out of the market. Now it looks like their time is coming,” remarks Mike Webber, associate vice-president of aviation planning and development consultants Landrum & Brown.

There is no argument that e-commerce has been the chief driver of this development.

“Jack Ma and Jeff Bezos want to move everything anywhere in the world in 72 hours. The answer is air cargo,” comments Charles Edwards, director of logistics and freight at the North Carolina Department of Transportation.

“The old way of moving air cargo is gone. It is individual shipments with e-commerce. Then we’re hit with the capacity at airports,” he continues, adding that the major gateways along the US East Coast all face constraints

For its part, Amazon has eschewed the big metropolitan centres, preferring to set up its hubs in smaller locations within relatively easy driving distance of the big centres, notes Brandon Fried, executive director of the US Airforwarders Association.

“It’s going to places like Rockford and Allentown instead of Chicago and Philadelphia,” he adds.

Piedmont Triad International Airport (GSO) in Greensboro, North Carolina, is not a cargo airport, but it is a sub-hub in the FedEx network. For years this meant little more than two flights a night – a far cry from more than 60 that the integrator had touted when it moved to set up the hub. However, FedEx has now doubled its activity there to four nightly flights. For the first three quarters of 2019 GSO’s throughput is up 65%.

Virtually all of its cargo is on freighters. Passenger aircraft serving GSO are no larger than an MD-80, so there is very little belly freight, observes Edwards.

He was involved for a long time with the Global TransPark, a 2,500-acre multi-modal industrial-cum-airport site in eastern North Carolina. Part of the fuselage of the Airbus A350 is built there and shipped (by ocean vessel) to Toulouse for assembly.

The airport has seen international charters but never landed a regular freighter operation. Now negotiations are afoot with US Customs to establish it as an international gateway, Edwards reports.

“It’s finally starting to gel,” he remarks.

The new interest in cargo airports is encouraging news for aspiring venues. Fried recalls a display by Lakeland airport from Florida at a conference two years ago. “I thought at the time: It’s going to be an uphill struggle for them. Now they have Amazon,” he says.

Webber injects a note of caution into the brighter horizon for freighter airports. Amazon, FedEx and UPS have the heft to make things happen, but this is not going to unleash an infinite number of freighters looking for places to land.

“There’s a certain degree of optimism that’s quite defensible. Amazon opens up one more possibility. In the 1980s there were seven,” he reflects, pointing to the demise of the likes of Kitty Hawk and BAX Global.

Even if e-commerce fails to lift GSO, the airport has a second, stronger leg to stand on. With Haeco, Honda Aircraft Company and Cessna operating on its patch, it has grown into a major site for the aviation industry.

Honda Aircraft is currently spending $15.5m to ramp up its production capacity and add storage for service parts for the fleet of HondaJets around the world.

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