Air Cargo Ranks High
Busy state-owned international airports in Anchorage and Fairbanks
Northern Air Cargo operations at Ted Stevens Anchorage International Airport.
© Russ Slaten
Many people across the nation and throughout the world visit Alaska for its majestic beauty and natural wonder. They come to see the vibrant Aurora Borealis, catch a glimpse of the state’s wild animals, or see what really makes up the Last Frontier. One thing many travelers don’t consider is the vast amounts of goods that travel to—and especially through—Alaska.
Passenger flights accounted for a little over 60 percent of flights in 2012—that’s a total of 6 million passengers—to Alaska’s International Airports. The nearly 40 percent of cargo flights, however, weighed in at 5.5 billion pounds of goods, nearly two-thirds of which was in-transit, according to the Alaska Department of Transportation and Public Facilities 2013 Annual Activity Summary Report for the Alaska International Airport System (AIAS).
AIAS is comprised of Ted Stevens Anchorage and Fairbanks international airports. Operations began in 1951, and the state was granted both airports in 1959 and assumed management a year later. Ted Stevens Anchorage International Airport is the fifth largest airport in the world for cargo throughput and the second in the United States for landed weight, according to the AIAS website.
Cargo jets lined up at the Anchorage airport.
Photo courtesy of Ted Stevens Anchorage International Airport
John Parrott, airport manager for the Ted Stevens Anchorage International Airport, says Anchorage’s geographic location gives the airport a distinct advantage over other airports across the nation.
“The most important advantage we have is location, location, location. We are within nine and a half hours of 90 percent of the industrialized world,” Parrott says. “We are the biggest airport closest to the midpoint between the manufacturing centers of Asia and the consumption centers of North America, and we’re not off the beaten path to connecting one of those two to Europe.”
Parrott says that airplanes like the Boeing 747 can overfly Anchorage and go to the West Coast but must refuel and take off cargo.
“Nobody is paying them to carry fuel; they’re being paid to carry cargo, so this location is very important in allowing them to maximize their cargo revenue,” Parrott says.
FedEx, among other carriers, tends to agree on Anchorage’s advantageous position in the global cargo network. FedEx has a five hundred thousand-square foot sorting facility, with the capacity to process fifteen thousand pieces per hour.
“FedEx continues to move a significant amount of our international volume—especially deferred volume between the US and Asia—through Anchorage,” says FedEx spokesperson Scott Fielder.
Nippon Cargo Air utilizes the Ted Stevens Anchorage International Airport particularly for its location, and additionally because it is fully equipped to handle the large Boeing 747-8F without restrictions, a necessity for Nippon Cargo Air.
“ANC is the perfect location for maximum operating efficiency of our B747 freighter, both the -400F and the -8F. We can minimize fuel burn by operating from Narita, Japan, to Anchorage and then to Chicago O’Hare and vice versa. Compared to operating nonstop, stopping in Anchorage allows us to offer full payload without any restrictions,” says Nippon Cargo Airlines Americas President Shawn McWhorter.
Alaska Cargo Regulations
Along with an advantageous location, the special federal regulations affecting Alaska play a role in attracting cargo airlines. Normally, a foreign carrier would not be allowed to handle cargo in any way or transport it between two cities within one country. But Parrott says this advantage is a significant piece of the business development and marketing efforts at the airport.
“Because of its location, the US Department of Transportation decided to make an exception for Alaska in the late 90s,” Parrott says. “They said carriers can manipulate cargo, and it will not be counted as breaking the international journey because Alaska is still a long way from the rest of the United States. Those allowances were expanded in 2003 with the Stevens Amendment, which basically allows carriers to move cargo either between their own aircraft and other carrier’s aircraft, as long as a US carrier is involved, and then proceed to other cities in the United States.”
Nippon Cargo Airlines uses this distinct advantage to find ways that adds to its revenue stream.
“There are unique commodities that we sell from Alaska to Japan such as cod milt, roe, and other seafood. So we can also load additional revenue cargo during the stop in Anchorage when going to Japan,” says McWhorter.
Other airlines that use this service include Air China, Cathay Pacific, China Airlines, Korean Airlines, UPS, and much more, Parrott says.
UPS is one of Anchorage’s consistently high ranking cargo operators in terms of landed weight, generating about $4 million in landing fees a year. UPS spokesperson Mike Mangeot says the shipment and logistics company hires over a thousand people in the state.
“As our primary jumping off point to Asia, Anchorage is one of the most important points in the UPS global network, and we have invested $60 million in our package operations, pilot training base, and pilot domicile there,” Mangeot says. “In recognition of Anchorage’s special place in our worldwide logistics network, UPS has given back to the community in unique ways, including moving two polar bear cubs for the good folks at Alaska Zoo.”
UPS workers load the flight to transport a polar bear cub from the North Slope for the Alaska Zoo to the Louisville Zoo via “Operation Snowflake.”
Photo by Carol Lahnum, Courtesy of UPS
The UPS “Operation Kali” flight taxis to the runway with a polar bear cub from Point Lay after the Alaska Zoo found a new home for him at New York’s Buffalo Zoo.
Photo courtesy of UPS
Anchorage International Airport is in between the industrialized centers of Asia and consumer centers of America but not within three hours of any other airport except Fairbanks, Parrott says. He believes the location of each airport is advantageous to the other in providing an alternative route for emergencies.
“Having that safety net of Fairbanks is important to us. If you’re scheduled to go to Fairbanks, you have Anchorage as a safety net. And we’re separated obviously by a couple hundred miles of mountain range, different fault lines, and different weather patterns. There has never [been], in the history of the AIAS, a simultaneous closure of airports, except for the airspace closure associated with 9/11,” Parrott says. “That really adds a high level of safety and redundancy to operating out of either airport.”
Alaska Airlines moves more than 80 million pounds of cargo in and out of its Anchorage facility annually, and the average number of arrivals and departures is 81 per day in the fall and winter, which shoots up to 113 flights per day in the summer. Alaska Airlines officials say the direct relationship between the international airports adds to its unparalleled airport system qualities.
“The partnerships we have with Anchorage and Fairbanks international airports are very strong. Both airports are very well managed and recognized throughout the world for innovation and operational excellence, and they have done an excellent job marketing these attributes to global carriers,” says Alaska Airlines spokesperson Joe Samudovsky.
Alaska Air Cargo workers loading freight at Ted Stevens Anchorage International Airport.
© Russ Slaten
Although the majority of cargo passing through Alaska is international freight, it is by far not the only cargo. Alaska Airlines says in addition to its typical air freight commodities of fresh seafood and produce, healthcare-related, and industrial shipments, the airline also transports lumber, drywall, and other building supplies not normally seen inside of an aircraft. The unusual cargo is due to the minimal highway infrastructure in Alaska and the fact that many communities can only be reached by air, Samudovsky says.
“A few years ago we conducted a tour of our Anchorage cargo facility for a group of air freight industry executives; their total industry experience was well over one hundred years,” Samudovsky says. “Quite frankly, they were amazed at the type of freight being shipped by air throughout the state.”
Northern Air Cargo, a cargo carrier specializing in serving Alaska, operated 4,600 flights last year and transported more than 66 million pounds of freight to communities within the state. The company’s three hundred plus committed employees, along with its role in supplying Alaska with needed commodities add to the success of its mission.
“We understand supplying the communities we serve, and it is not taken lightly. Because we might be the only option in getting an item to its destination, if we fail to provide that service it can have an adverse effect on the individual customer or the whole community,” says Northern Air Cargo spokesperson Blake Arrington.
One airline that utilizes Alaska’s international airports not only as a shipping destination, but also as a starting off point to rural Alaska, is Lynden Air Cargo. Lynden operates the civilian version of the military C-130 Hercules aircraft, equipped to handle bulk, large, outsized pieces of freight and equipment to short, rough, unimproved airstrips.
“Anchorage International Airport is uniquely positioned to receive that type of equipment from all over the world, then it transfers to us, and we move it to the final destination in western Alaska or North Slope, wherever it needs to go and wherever we can get the airplane in,” says Lynden Air Cargo President Rick Zerkel.
Revenue and Jobs
The state-owned international airports generate their own revenue through landing and fuel flowage fees, land and terminal rent, a percentage of concessions, and parking fees, Parrott says. Cargo-related revenue accounts for more than 50 percent of revenue for Ted Stevens Anchorage International Airport.
“Due to our location and because of those liberalized cargo regulations—as of the end of 2013—we are the sixth busiest cargo airport in the world, behind Hong Kong, Memphis, Shanghai, Incheon, and Dubai.”
The state’s international airports are responsible for one in every ten jobs in Anchorage and one in every twenty jobs in Fairbanks, Parrott says. The number of airport and airport-related jobs is more than fifteen thousand in the Anchorage bowl, accounting for about $1 billion in payroll and sales into the local economy.
“The Alaska team spirit and the mentality and attitude folks have that air traffic in general, and cargo in particular, is important. We need to take care of it; we need to make it efficient; we need to properly design and construct an airport; air traffic needs to officially run the airspace; and customs and TSA need to not interfere with commerce,” Parrott says. “All of that is required to have an efficient cargo airport. And we have all of that, because everyone involved in the process gets it and works together to keep the entire system working well.”
Russ Slaten is the Associate Editor at Alaska Business Monthly.
Posted: May 30, 2014