August 19, 2023

Cargo-focused airports outpace peers with passenger traffic


Airports specializing in air cargo shipments have outperformed hybrid airports that also cater to passenger traffic during the current shipping slump, researchers at DePaul University said in a study released on Thursday.

Cargo-oriented airports have increasingly attracted cargo airlines and logistics companies because of their operational flexibility, reduced air and road congestion, available land for terminals to support dedicated freighters, lower fees, and faster customs clearance.

The second-tier facilities, often located outside large metropolitan areas, only suffered a 3.4% decline in cargo volume in the 12 months through April compared to an 8.9% drop among large airports with a diverse mix of traffic and a 9.1% drop among all U.S. airports, according to DePaul’s Chaddick Institute for Metropolitan Development.

The strongest performers included California’s San Bernardino International, Ohio’s Wilmington Air Park and Chicago Rockford International, all of which saw freight volumes increase more than 4% in the past year. Results were tabulated while the air cargo market has been in a downturn from pandemic-led highs for the past 16 months, with global demand down more than 8% in that time.

The report, which relied on data from the U.S. Bureau of Transportation Statistics and was led by Professor Joseph Schwieterman, focused on domestic cargo traffic at 16 airports. Many of those, and other smaller airports like Greenville-Spartanburg International Airport in South Carolina, are also becoming frequent destinations for international cargo jets for the same reasons. Kuehne+Nagel, the world’s largest airfreight forwarder, in April began private cargo service from Germany to Birmingham-Shuttlesworth International Airport in Alabama, which plans to build a permanent facility for the operation. DSV, another global logistics company, recently established a private air hub at lesser-known Phoenix-Mesa Gateway Airport to provide more direct transport for new electric vehicle and semiconductor customers.

The pace of cargo growth at the 16 specialized airports is even greater over the past four years, during which several more than doubled their traffic, the study said. Cargo traffic at these airports, some of which are former military bases, grew by 53.6%, compared to 2.4% at multipurpose airports and 12.2% at all U.S. airports.

Although only two cargo-focused airports, Chicago Rockford and Fort Worth Alliance in Texas, rank in the top 20 in cargo traffic among U.S. airports, most of these specialized airports are on the rise.

Many of the cargo-friendly airports benefit from the sizable presence of one or more integrated express carriers, such as Amazon (NASDAQ: AMZN), DHL Express, FedEx (NYSE: FDX) and UPS (NYSE: UPS). A characteristic of express networks is that they are primary channels for e-commerce and overnight shipments, making them more inelastic to fluctuations in demand than general cargo. And express carriers operate fixed schedules every day to meet delivery commitments no matter if the planes are full or not. 

In the past year, however, growth has been better at airports with Amazon facilities, reflecting the fact that Amazon has adjusted its air network less than FedEx and UPS to cope with the soft market. FedEx and UPS have consolidated flights, reduced frequencies and parked some aircraft since last year. Amazon has slowed the rapid growth of its 7-year-old cargo airline but has continued to add flights. FedEx’s domestic flight activity is down 14% year over year, and UPS aircraft have flown 13% fewer hours, according to Morgan Stanley, which tracks air parcel movements.

Florida’s Lakeland-Linder Airport, for example, experienced a 5% jump in shipment volumes in the 12-month period thanks to Amazon’s new gateway there, the DePaul study found. Cincinnati-Northern Kentucky International Airport is a mixed-use airport that enjoyed a cargo increase but has functioned as Amazon’s super hub since September 2021 and is now routing more flights there. Fort Worth Alliance serves as a regional hub for Amazon Air.

Multipurpose airports with neither an Amazon or integrator presence experienced a 15.7% decline in cargo volume in the 12-month study period.

Large mixed-use airports also have advantages, including a larger base of airline users that help fund infrastructure and personnel overhead, and passenger aircraft that carry cargo to many more destinations, enabling logistics providers to build routes that utilize cargo and passenger aircraft to meet customer requirements.

The authors acknowledged their study had limitations because it only considered airports that had at least 20 million tons of cargo in 2022. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / [email protected]

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