Missouri and St. Louis grew because of trade – and lawmakers want to make that happen again.
State senators endorsed legislation creating new tax incentives for air cargo. Freight forwarders would receive a credit of 40 cents per kilogram for cargo placed on outbound flights from a Missouri airport.
“For St. Louis to have a place in global trade is really important because if you look at these routes, you’re either on the interstate or you’re not – and we’re not,” says Sen. Eric Schmitt (Mo.-R) of St. Louis County, who is sponsoring the bill. “We would like to utilize an under-utilized airport in a more effective way and have a greater mix of cargo exports.”
That airport is Lambert-St. Louis International Airport, the largest airport in Missouri. It used to be a hub for Trans World Airlines. In its heyday in 2000, the airport processed almost 300 million pounds of cargo, says David Lancaster, director of cargo development at the airport.
But then American Airlines bought out TWA. After the events of Sept. 11, 2001, American Airlines “de-hubbed” Lambert, Lancaster says.
Today, the airport processes 153 million pounds of cargo – just half of what it used to.
Now, Lambert wants to get back into the air cargo business, and if the bill passed by the Senate becomes law, the airport would be on its way, Lancaster says.
“Air cargo drives a lot of economic activity,” he says. “We look at our area as between 300 and 500 miles circumference around St. Louis, so that covers the vast majority of the industry in this region – both production, agricultural. There’s a lot of products that are generated in that area that today have to be moved elsewhere to other cities, so we see this as a great opportunity for the future.”
There are a lot of places a truck can reach within 12 hours of St. Louis, Schmitt says. Plus, the state has barge traffic on the Mississippi River and a good rail network.
Lambert is marketing itself to the international cargo industry, especially to Asia, the Middle East and Europe, Lancaster says. Lambert has four runways, moderate weather and a location in the middle of the U.S., perfectly placed for distribution.
“We’ve got the asset there and the infrastructure, and we just want to make better use of it by adding more cargo flights,” Schmitt says. “When you have 95 percent of the world’s consumers living outside of the United States, to be able to connect with the rest of the world through an airport in your state is really, really important.”
But attracting international carriers to the airport presents a challenge. Right now, there is no international direct service for air cargo at the airport.
“It’s a hard sell. For airlines in general to open up a new market or consider going into something that is from their perspective a non-traditional market, it does require a great deal of analysis and consideration,” Lancaster says. “Certainly the incentive program, once approved, will be a unique element in air cargo because I don’t think anything like it exists around the world.”
For the past few years, the airport has worked to raise awareness of the advantages of the Missouri and St. Louis market.
For a period of time, Lambert even mitigates the landing and facility fees for airlines that want to come to the airport.
“Once the awareness has been created, then you can talk about the business case and the economics of it,” Lancaster says.
When airlines start answering yes and the flight schedule becomes more reliable, Schmitt says more freight forwarders will turn to St. Louis.
“We’ve got the land. We’ve got the space. We’ve got the runway,” he says. “We just got to give the freight forwarders who have the incentive here to send their goods through St. Louis.”
Schmitt says if the appropriate bodies approve the tax incentive bill, he expects it to be passed in April or May.
“We only need a small amount of success. We’re not trying to be Atlanta or Dallas or O’Hare or New York or Los Angeles,” Lancaster says. “We believe, however, that this airport most certainly has a place that it enjoyed in the past by virtue of having a large international carrier here. If it made sense for them, it could make sense for other carriers who similarly want to create an opportunity in a market where they’re not necessarily butting up against their competitors day in and day out.”