Airport representatives listened closely to a discussion at AirCargo 2014 in Orlando, Fla., about how to develop a successful airport community for cargo.
Shawn McWhorter, president NCA Americas for Nippon Cargo Airlines, addressed the audience at the annual gathering of airfreight forwarders, saying that he sees a difference between airports that are friendly to freight activity and those that aren’t.
“When an airport recognizes their economic importance to the region, they’re more friendly to cargo,” McWhorter said.
Ken Ryan, cargo and business development director at Chicago Rockford International Airport, moderated the panel, which also included representatives from Panalpina and Aeroterm, an airport real estate services provider.
Michael L. Minear, Aeroterm’s executive vice president, Eastern region, agreed that airports that foster cargo growth appreciate their role in the economy.
“Airports that recognize their service to the community think in broader terms,” Minear said.
McWhorter commended airports that help create foreign trade zones and carry out promotions.
“This is ultimately job creation,” he said.
But Minear said some airports don’t truly understand the cargo business.
“I’ve been to airports that want planes – but not trucks,” he said.
McWhorter said airports sometimes put operating restrictions on airlines, such as curfews, especially in Europe.
Benno Forster, Panalpina’s senior vice president airfreight, called for more communication with airports, saying that when airports look to make cuts, they usually dismiss cargo staff.
“They don’t cut the passenger guy,” Forster said. “They cut the cargo guy.”
Ryan of Chicago Rockford International Airport brought up the topic of incentives. He said his airport has offered incentives to airlines before, and when those expire, the airlines leave.
Ryan asked what types of incentives are desirable.
McWhorter said a few thousand dollars in waived landing fees don’t necessarily make a flight profitable. Incentives accomplish something else.
“What it shows to me is a commitment from the airport that they’re willing to share the risk,” he explained.
Minear said he doesn’t view incentives as a way to achieve profitability. The most valuable incentives are ones he can share with Aeroterm’s customers.
The overarching question for the panel discussion was why companies choose a particular airport over another.
Forster said Panalpina looks for easy access and airports with carriers that have good handling agents. He also pointed to cargo villages, which make freight operations easier.
McWhorter and Forster said airports must show flexibility, and Forster emphasized that infrastructure is important, such as having enough cooler space and sufficient surveillance cameras.
“If the airport doesn’t have the infrastructure, we can’t operate there,” Forster said.
As for how companies choose whether to occupy off-airport facilities or the pricier on-airport ones, it depends on the operation’s needs.
Minear said there is less opportunity for something to go wrong at on-airport facilities, but many airports are land-constrained.
“The only thing that pushed people off the airport was cost,” he said.
Nippon Cargo is always on-airport because cargo doesn’t rest long in its operation, McWhorter said.
“’Warehouse’ is a misnomer. It’s a transit point,” he said. “I don’t want anything sitting around.”
On-airport facilities are expensive storage space, so a forwarder takes cargo to a more cost-effective location if it requires storage, McWhorter said.
Forster said Panalpina chooses on-airport or off-airport facilities based on what it’s transporting. For example, for the fashion industry, he said the company uses on-airport warehouses because the cargo needs to stay closer to the city. But when transporting for other industries, the warehouse can be 30 miles (48 kilometers) away.
“It really helps if we can get less cost in reasonable distance to the airport,” Forster said. “It depends on the situation and the customer.”