Anchorage International Airport is a gateway between two major freight markets. Now the Alaskan hub is targeting new routes and buffing up cargo capacity.
Sitting at the crossroads of a gaggle of major intercontinental routes, Ted Stevens Anchorage International Airport was bound to benefit from the rising tide of global air cargo traffic in the past two years, so it was no surprise that its throughput reached 2.79 million tonnes last year, cementing its ranking as the world’s fifth-largest air cargo gateway.
Tonnage was up 2.52 per cent from the 2017 tally. Within the broad increase in demand, airport manager Jim Szczesniak singles out two trends that have fuelled Anchorage’s rise in freight tonnage – e-commerce and perishables.
“Tonnage going through the airport has been boosted by e-commerce flows between the two largest markets on the planet for this segment,” he points out. “In addition, the state of Alaska seems a natural market for online shopping.”
“E-commerce continues strong,” confirms Jason Berry, managing director of Alaska Air Cargo. “Alaska has some perishables exports to Asia, primarily seafood, but the main driver of that segment has been the increasing focus of perishables exporters from Latin America on Asian markets. This traffic reaches Anchorage by way of Mexico City, Guadalajara and Miami,” Szczesniak observes.
“The perishables market between those two regions is really exploding and Anchorage is strategically located between those markets,” he says. The airport’s carrier base has expanded. “One recent entrant was SF Airlines, which completed the set of all the major integrators flying to Anchorage,” Szczesniak says.
The airport hosts 69 per cent of all eastbound freighter flights from Asia to the US and 59 per cent of the westbound freighter flights. Los Angeles is a distant second with 15 and 14 per cent of eastbound and westbound flights respectively.
“On a typical day we have 20 flights between here and Hong Kong, 20 between here and Chicago and multiple flights to Zhengzhou, Hangzhou, Guangzhou and Shenzhen,” says Szczesniak. “We have 17 markets with at least daily departures and 21 with at least weekly service.”
He is eager to expand the network. This involves talks with airlines and forwarders as well as collaborations with airport partners: “We’re working with a couple of Chinese cities. We’re looking at areas in the US to serve via Anchorage, for example New York,” he says.
One item on his wish list is a freighter connection to Europe. “An all-cargo operator could avail itself of transfer rights in Alaska to interline traffic to some Asian destinations, to a US point like Los Angeles or to Mexico. This might be attractive for some European car manufacturers,” Szczesniak reckons.
This would also go some way towards one of his major objectives – increasing transloading activity at Anchorage. The lion’s share of the airport’s throughput never touches the ground, since the majority of the freighters land only to refuel.
The exception here are the integrators. They haul in cargo from Asia, sort it and transfer it to various planes serving different destinations in the US.
“Transfer is a good opportunity,” comments Shawn McWhorter, president for the Americas at Nippon Cargo Airlines, adding that the airport authority has been very cooperative. Prior to joining NCA, he was overlooking operations at Northwest Airlines Cargo, which involved moving loads between six freighters at Anchorage, he recalls.
Szczesniak stresses that transfer rights in Alaska are very liberal. “Two non-US carriers cannot transfer freight going to US markets, but they can serve non-US points in this way, and they can cover the US through a transfer arrangement with one or more US airlines,” he points out.
NCA does the occasional transfer when a shipper requires it, but it is not a regular strategy: “We had to have our own transload facility at Northwest to make it work,” McWhorter says.
Szeczniak is painfully aware that the current set-up is not conducive to a sustained transloading activity: “Transfers now are tail to tail, or you face a three-mile round-trip on a tug between the tarmac and the warehouse,” he says. “If you have a couple of pallets with iPads, you don’t want to leave them on the ramp or do the three-mile journey.”
This is where the airport’s new capital plan comes in. It calls for additional aircraft parking positions as well as a new cargo facility. Both will be developed concurrently and are expected to be completed by the summer of 2020.
Details on both are yet to be decided. Szczesniak affirms: “The apron development should create 3-5 additional parking positions. At this point the airport can park three B777 or 747-8 freighters. The cargo building will be done by a third-party developer and will likely come up in phases,” according to Szczesniak.
In addition to its belly feed into Anchorage, Alaska Air also runs its three B737-700 freighters up to Anchorage, which could connect with an Asian carrier, but Berry wonders if this would be worth the other party’s while. “For a big operator, opening the door for one pallet position isn’t exciting. With our three 737 freighters and the passenger planes we don’t have the scale,” he reflects.
McWhorter can think of another reason for wanting to transfer multiple ULDs: “Usually the charge to bring a high loader to a plane is a fixed cost. If you don’t handle three pallets, that may be a rather expensive transfer,” he remarks.
Szczesniak can think of a few ways to ramp up loading and unloading activity: “We want to try and develop some facility for large time-sensitive items, for example aircraft engines and landing gear. Instead of having a warehouse at Shanghai, where land is expensive, distribution can be done from here,” he says, pointing to multiple daily departures to the Chinese gateway.
The concept could also work for the likes of Caterpillar or John Deere or MRI machines, he adds. Another potential avenue to pursue could be e-commerce handling at the airport.
He is thinking of a dedicated facility across the street from the integrators’ buildings to handle this traffic, which would be shipped in bulk to Anchorage to be broken down into individual shipments.
“E-commerce is often inefficient. With this it would only be half inefficient,” he quips. Berry remarks that freight flows in and out of Anchorage by road and vessel as well as aircraft: “Cargo may come in from Asia by ocean and connect through us to small cities in Alaska. Anchorage is the only multimodal hub in the state,” he says.
Origin and destination (O/D) traffic accounts only for a small fraction of the airport’s throughput. Local exports are dominated by seafood, chiefly king crab and salmon. “One forwarder recently installed a seafood refreshing tank at the airport to ship live king crab, which is in high demand,” Szczesniak reports.
Another local export is peonies. “These are popular at weddings and go both to the lower 48 states and to Asia,” says Szczesniank, adding that the growing season in Alaska starts later than further south.
The airport can offer loading the flowers virtually from its doorstep. Some land has been dedicated for peony growing. “Some acres are not needed,” says Szczesniak, a luxury for many airport executives who struggle to find enough space to accommodate their cargo infrastructure needs.
Still, flower exports are unlikely to challenge seafood for the top spot as export commodities from Anchorage. For that matter, international carriers are not exactly falling over each other to load up on fish and king crab on their way to Asia. For NCA, Alaskan seafood is not a huge magnet.
“The O/D business is pretty specialised. It’s not a huge volume,” comments McWhorter. In January and February, the airline picks up some cod milt going to Japan.
McWhorter is mulling over a possible traffic stream in another direction: “Japan is not a huge market for Alaskan salmon, but I hear it’s popular in Europe. We could perhaps take some from Anchorage to Chicago to put on our flights going to Europe,” he reflects.
Berry hopes for a better seafood production this year than in 2018, which was a tough season for some of the larger fisheries: “Seafood is something we lived and died by in the past. Now we’ve deleveraged a bit with our growth, but it’s still big,” he remarks.
He is interested in developing interline traffic feeding fish and seafood from around Alaska to international carriers: “This is a nut we haven’t cracked yet,” he says. “It’s hard to get everything lined up.”
Tapping into inbound flows is also challenging. Most of the space on freight aircraft out of Asia is taken by large forwarders’ traffic to the lower 48 states. “Traffic here is all palletised. There is not much shift into Alaska Air,” confirms Szczesniak.
Perhaps some belly capacity could help. While his focus is naturally on freight traffic, he also has an eye on bellyhold lift. “This summer Condor will be operating a B787 service from Frankfurt, which will offer some belly capacity across the Atlantic,” he notes, adding: “American Airlines is going to fly in with a B787 from Dallas/Fort Worth in the summer.”
Still, the freighters will continue to rule the roost in Anchorage.