Preparing for Washington’s air cargo growth

Preparing for Washington’s air cargo growth
Paine Field is located in Everett and is among the airports examined in a new state report on how to expand Washington’s air cargo capacity. The annual air cargo value handled by Washington airports is expected to triple by 2045. Photo: Jelson25

Washington’s airports in 2015 handled $47.6 billion in freight – 10.5 percent of the state’s total gross domestic product for that year. That cargo value is expected to triple by 2045, but accommodating that growth will require greater capacity at Washington’s major airports.

The significance of the projected growth was underscored at a July 19 meeting of the state Joint Transportation Committee, where panel members reviewed the progress of a state report on how to reduce anticipated congestion.

Joe Bryan is the project manager at WSP, the company producing the report. He told lawmakers the projected growth clearly shows “that air cargo is going to become even more important to our economy than it already is.”

He added that the time value using air freight compared to trucking makes it a crucial means of transportation for many industries. A July 19 presentation by WSP to panel members warned that “risks to reliability from air cargo congestion impose a substantial economic penalty.”

“What you’re buying is the reliability of the system,” Bryan said. “Our investment in the reliability of the system is supporting the needs of our industry, and they want it and they pay for it.”

Sea-Tac International Airport’s port is by far the state’s busiest, as well as the 19th busiest in the nation. In 2016 it handled 366,000 tons of cargo – 90 percent of its international cargo originates from Washington. However, it is dwarfed by LAX, which represents 45 percent of the West Coast air cargo market share.

The Port of Seattle wants to double Sea-Tac’s tonnage by 2036, the Washington State Department of Transportation estimates the airport will reach full capacity two years before that.

The WSP study found Sea-Tac could have a cargo building deficit in 2021 “without planned creation of new cargo facilities,” though Keiser Phillips Associates President Tom Phillips told lawmakers that the airport’s new sustainable master plan “more than covers what we feel is the forecast demand for cargo.”

One of the challenges for air cargo capacity expansion is that there are two separate types of freight with “completely different business models” Phillips said. Airport-to-airport carriers such as Delta and Southwest offer room for “belly cargo,” while integrator/express airlines like FedEx and UPS provide “door-to-door” service for customers.

“They really have two different types of resource needs,” Phillips said.

At Spokane International Airport, FedEx and UPS alone make up 93 percent of the air cargo activity. The presentation concluded the airport has “significant airside and landside infrastructure with room for expansion.” Paine Field in Everett mostly serves Boeing, but Bryan said there’s potential for airport-to-airport carrier cargo if passenger activity increases.

Interestingly, the report found that although air cargo activity in Washington has increased since 2006, the years in between experienced decreased tonnage. Phillips said that much of the freight was shipped by truck instead.

“The trucking industry has really upped its game in terms of being able to provide performance to shippers,” he said, adding that “air cargo is not just in airplanes. Air cargo is also a trucking operation. Every air cargo shipment begins with a truck and ends with a truck.”

Along with estimated growth, Bryan said that there are opportunities for Washington to capture some air cargo activity tied to their exports. The state has a disproportionate share of the air cargo imports from East Asia compared to the rest of the nation, but a portion of Washington products such as cherries end up getting trucked to Canada and flown from there.

“The demand for cherries in British Columbia is not that vast, but the ability of British Columbia to load those goods onto aircraft….to go over to East Asia is substantial. (It’s an) opportunity to pick up more business than we do.”

When Co-Chair Sen. Steve Hobbs (D-44) asked whether any capital investments are needed to change that, Phillips replied that “I don’t really think it’s infrastructure-based facilities that need to be developed…it’s more the facilities and services, in terms of warehousing.”

“Moses Lake can handle the right kind of aircraft, they’ve got the capacity for it,” Bryan said. “How widely known are they for the people that would run the aircraft is the question.”

WSP is currently working on recommendations and implementation strategies. The final report is due in December.

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