New York is taking steps to attract freighters
27 / 08 / 2013
ONE OF the trends in air cargo in the last decade or so has been the apparent downgrading of the importance of cargo at major airports. Where once most major hubs had a cargo manager who was a visible and vocal presence at industry events, now many have no-one speaking for cargo at all. Freight is seen – if it is noticed at all by airport owners – as a property issue.
Amsterdam is one exception to this rule, however, and so is New York, where Michael Bednarz is not just manager of air cargo development for the Port Authority of New York and New Jersey, but also vice-president of the JFK Air Cargo Association and active on regional committees.
True, he is just one man, compared to a team of six at Amsterdam, but he still speaks up for cargo as part of the wider economic health of New York. “Thirty five jobs are created for every 1000 tonnes of freight,” he says. “That means each round trip by truck is an extra job for the region, and we also get many hi-tech, high value products coming through, which generate high paying work.”
It would be nice to say that such an approach has produced a growth in air cargo for New York’s JFK airport but, sadly, since 2000 the reverse has been true. Cargo tonnage has declined 27 per cent since 2000, and 19 per cent since 2006. In that time the airport has slid from 3rd to 7th largest in the USA, and to 19th place globally.
The factors that caused that decline are several years in the past, however. For example, the events of 9/11 were one cause of a 15 per cent fall in tonnage between 2000 and 2002. “Airports were basically at a standstill, and in New York there were huge delays on the bridges,” Bednarz says. “That caused air cargo logistics chains to re-think their distribution strategies, and a big part of that business did not come back.”
Two more factors were the rise in fuel prices in the mid 2000s, followed by the traffic slump of 2008. That prompted some Asian freighter operators to look at more westerly airports, such as Chicago, as an alternative to JFK. As a result all-cargo traffic at the airport has fallen from 60 per cent of volumes to 50 per cent today.
That still leaves a pretty big freighter business, however, and Bednarz says the western drift has star-ted to reverse. One example is Nippon Cargo Airlines, which has returned with three frequencies a week, while carriers that never left, such as Cathay, Asiana and Korean Air, still operate daily or near daily services. New York also remains an important gateway for Lufthansa Cargo, Air France-KLM, Cargolux and TNT, with Cargolux Italia starting a new service recently.
Bednarz would obviously like to expand that roster, and two targets are AirBridge Cargo and Silk Way of Azerbaijan. “I think those carriers would sit very well in JFK. They are a market underserved here and are areas the JFK community would support,” he says. He also has his eye on LOT which, since last year, has been flying freighters to Chic-ago, and also hopes to get more Chinese all-cargo operators.
To win over such prospects, JFK needs to make some improvements on the ground, however. A 450-page report commissioned by the Port Authority from aviation consulting firm Land-rum Brown and published in February, highlighted a number of areas that need to be tackled to make the airport more freighter-friendly.
One is a ban on 53-foot truck trailers within New York City, which acts as a deterrent for feeding in longer haul cargo. This is an issue the Port Authority has been working on for some time, but Bednarz is optimistic about making headway in the next few months.
“We have now partnered with the New York City Development Corporation, who are the primary body for promoting economic growth in the five boroughs, and we are working with them on an initiative to remove restrictions on 53-foot trailers on specific roadways leading to JFK,” he says.
The Port Authority is also developing new cargo facilities. JFK is fortunate here in that it has quite a bit of space to play with. Historically carriers in the US owned and operated their own cargo terminals, and the likes of American and Delta still do. But as airlines have outsourced such non-core activities, the trend in the past decade has been towards shared third-party warehouses, freeing up a lot of space.
“We probably have enough land at this airport to handle four million tonnes of cargo a year,” Bednarz reveals.
Developments already underway include a new truck stop, due to open in Sept-ember, which will provide truck drivers with parking, fuel, food and rest services while they wait to load or unload at cargo facilities. “At the moment there is nothing like this at the airport,” Bednarz says. “I am not sure that any other US airport has such a thing.”
A major new 140,000-sq ft animals handling centre, called the ARK at JFK, is also under construction, with its opening slated for some time in 2014. Bednarz says this will be “spectacular” and will inc-lude an indoor walk for horses, hi-tech kennels, veterinary capabilities and the ability to handle exotic animals.
“I was discussing this at Air Cargo Europe with airlines, GSAs and animal shipping companies, and there was huge interest,” he says. “They all want to pencil it in at once.”
In the slightly longer term, the big US airport is also in negotations to create a multi-tenant cargo handling facility, offering 650,000 sq ft of cargo space on the northern side of the airport. “It will be on two levels, with pick-up on one level and delivery on the other. As far as I know, this will be unique for a North American airport,” Bednarz says.
Last but not least, the authority is also looking at ways to bring freight forwarders on-airport. New York has the largest forwarding community in the USA, with some 600 different companies but, historically, they have kept to cheaper sites off-airport. But now with land available, the Port Authority is looking at ways to target them.
“Part of the study looked at different types of pricing to attract onto the airport businesses that don’t necessarily need direct access to the ramp or aeronautical services,” Bednarz says.
“We think there would be a lot of benefit to forwarders in being on airport in such sites. For example, less traffic congestion, easier drayage to airline facilities, and security – we have our own police force.”
How attractive all this will be to new freighter operators remains to be seen, but meanwhile, JFK does have one ace up its sleeve. No matter how all-cargo trends pan out, New York remains the obvious first port of call for any foreign passenger airlines serving the USA, and that continues to bring in interesting new belly cargo capacity.
“The B787 and B777 are game changers, because they are excellent at carrying cargo, and we are getting these from carriers or countries which have not served the USA before,” Bednarz says.
“We have not changed our priorities in cargo. We are still looking to attract freighter aircraft. But the extra capacity coming into the market does make New York more attractive, building economies of scale for freight for-warders and drawing the shipping community deeper into the market. If the cargo flows are already there, it is easier to attract freighters.”