Busiest passenger airport turns to cargo

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Near the magazine-covered coffee table and plush armchairs, the waiting room of the Hartsfield-Jackson Atlanta International Airport executive office has something else: a glass case filled with model planes, mostly of cargo carriers. A photo spread of Cargolux’s inaugural flight to the airport in 2007 rests against the wall.

The model planes, the photos – they all seem to signify Hartsfield-Jackson’s latest ambition: attracting cargo.

“That side of the business is the one we’re really looking forward to growing,” Miguel Southwell, Hartsfield-Jackson’s general manager, says. “We are the busiest passenger airport, but every one of those passenger planes, they carry cargo in their belly.”

Southwell is familiar with cargo. He joined Atlanta’s Department of Aviation in 2013 as the deputy general manager of commercial operations. Prior to that, Southwell was the deputy director of business for Miami-Dade Aviation Department, including Miami International Airport. He worked for Miami-Dade for 12 years.

Southwell has served as Hartsfield-Jackson’s interim general manager since January, but once he was chosen in May to serve in the post permanently, Atlanta officials pushed airfreight to the forefront.

“I’m confident that Miguel Southwell is the right executive to continue Hartsfield-Jackson’s dominance as the world’s busiest airport, and grow its capabilities as a leading global cargo hub,” Atlanta Mayor Kasim Reed says in a statement. “His experience in Miami, and prior experience in Atlanta, is the right fit to carry out my vision for our airport to be the nation’s leader in the logistics and air cargo space.”

Hartsfield-Jackson stands as the world’s busiest passenger airport, with 58,000 direct jobs, but now it wants to turn its attention to freight.

“At about 10:30 at night, when those passenger planes stop flying, the engine begins to sputter because we don’t have a robust cargo activity at nights, which is really the jobs that are done from between 10:30 at night and 6 in the morning,” Southwell says. “So the challenge for us, from a cargo perspective and a jobs perspective, is really to get that cargo operation going in a very strong way.”

Hartsfield-Jackson has mostly belly cargo, he says. FedEx, DHL and Atlanta-based UPS and Delta Air Lines all operate at the airport. Delta has the largest privately operated cargo facility at Hartsfield-Jackson. There is also freighter service, led by Lufthansa, but also including Atlas Air and IAG Cargo, among others.

The airport’s cargo fell by 5.8 percent in 2013 compared to the previous year. In 2012, it was down only 1.4 percent.

Southwell plans to concentrate on the perishable airfreight segment, especially pharmaceuticals since many pharma companies are in Atlanta.

“That is the area of focus that you’ll be seeing for us over the next few years – trying to understand how we can get much of those perishable shipments through Atlanta as opposed to the other major international gateways, which are Miami and New York and LAX,” Southwell says.

But there are a few challenges, he admits. Hartsfield-Jackson must build the proper relationships with companies.

“When you’re dealing with the perishable industry, with so much of it coming from Latin America and some of it from the African continent, there are pre-existing relationships that influence the current flow of those goods through other airports, and we have to build those relationships,” he says.

Hartsfield-Jackson also needs to improve infrastructure for maintaining the cool chain.

“We have some work to do in building that infrastructure, but we should be ready by the end of the year,” Southwell says.

He gives an example of where the cool chain infrastructure is lacking.

“Should you find pests, any kinds of pests, on any one of those shipments, currently that treatment is done where it is tented on the outside of the building,” Southwell says. “If it’s very cold, then of course it could impact the shelf life of, say, cut flowers. If it’s very warm, it could do the same thing. And so we have to improve our fumigation facilities.”

The cargo facilities also aren’t centralized in one area – there are north and south cargo facilities – so federal agents must travel to each facility to carry out inspections, Southwell says.

The airport is now in talks with a local research company to identify markets, shippers and potential airline partners. Once the research is completed by the end of the summer, Hartsfield-Jackson will talk to the potential partners.

“We have begun that conversation with distributors on a very peripheral level because we don’t yet have the information from the research to present to them for the business case,” Southwell says. “We know the business case is there. It’s really a matter of presenting it to them and inviting them to be our partners.”

In the meantime, Hartsfield-Jackson is wasting no time to push that business case. The airport recently began an air service incentive program. The program waives landing fees for one year for airlines starting international routes not already served from Atlanta, as well as provides cargo carriers the opportunity to qualify for a waiver of aircraft parking fees at the airport’s cargo areas.

Additional incentives are offered to carriers starting service to one of the five major emerging economies – Brazil, Russia, India, China or South Africa – while carriers starting service to Africa, Eastern Europe or Southeast Asia also receive extra consideration.

“It’s not just about the direct jobs on the airport. It’s how do you use the airport as a tool to create jobs and as a foreign direct investment here in Atlanta, and we know that cargo air service can help,” Southwell says.

Then there is the obvious fact: Atlanta must vie for air cargo when Miami, with all its international freight connections and cool chain infrastructure, operates in the same region.

Southwell says 80 percent of the perishable goods coming into MIA drive past Hartsfield-Jackson on their way to the Northeastern U.S.

“One day extra that you can cut out of the transportation means an increased shelf life for that good, those flowers [for example], and therefore increased profitability for those flowers,” Southwell says.

While MIA’s biggest strength lies with Latin America and the Caribbean, it should be noted that Hartsfield is targeting cargo growth in Eastern Europe, Asia and parts of Africa – far from Miami’s area of forte.

Back at home, Hartsfield-Jackson remains supportive of Delta as Atlanta’s hub carrier nixes its cargo head position starting Aug. 1.

“I’m sure those moves that are made have nothing to do with the demotion of the role of cargo at Delta, but really to streamline the organization and to increase profitability,” Southwell says. “We fully intend to work with Delta as a part of our air cargo development strategy. In fact, it would be difficult to have a robust cargo growth strategy without having Delta as a partner.”

Over and over, as relentless as the sound of plane takeoffs in the distance, Southwell uses the term “war for jobs” to explain the airport’s push for cargo growth.

“Building the cargo business to have direct jobs on the airport is just a piece of it. Equally important is actually building air service routes, including air cargo routes, to international commercial centers around the world,” he says. “We know that when corporations from foreign destinations are looking to expand to the United States, that typically among their top two criteria for choosing which U.S. city in which they may operate, just to be able to compete, is access to non-stop air service to that particular destination to move both their people as well as their goods.”

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