Title: TYING FREIGHT TO ECONOMIC DEVELOPMENT:
1TALKING FREIGHT SEMINAR SERIESFebruary 18, 2004
TYING FREIGHT TO ECONOMIC DEVELOPMENT AIR CARGO
2AIR CARGO DEVELOPMENT POTENTIAL
- Air Cargo Markets
- Demonstrated unmet Demand
- Existing Airports are Capacity Constrained
- Regional Growth Driven Demand
- Speculative Development to Drive Regional Growth
- Air Cargo Airports
- Existing Underutilized Facilities
- Regional or Municipal Airports (G.A.)
- Military Base Conversion
- New Construction
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3HOW DOES AIR CARGO CREATE ECONOMIC ACTIVITY?
- Direct Impacts
- Air Cargo Carriers, Forwarders, Truckers
- Support and Ancillary Services
- Indirect Impacts
- Shippers
- Manufacturing and Suppliers
- Third-Party Logistics
- Distribution (Retail and Wholesale)
- Enhance FTZ Utilization
-
4THE MULTIPLIER EFFECT
Greater Economic Benefit is derived from the
Secondary Impacts. Manufacturing and
Distribution Operations will locate and/or expand
to take advantage of new multi-modal
services. Air Cargo intensive Manufacturers and
Distributors produce and transport high-value
goods.
5PRIMARY PLANNING CONSIDERATIONS
- Market Understanding Service Demand
- Cargo Carrier Understanding Service Supply
- Anchor Tenant Concept
- Critical Mass
6LOCAL/REGIONAL AIR CARGO MARKET
- Demand Analysis
- Geographic Region to be Served Catchment Area
- Core Market Grouping(s)
- Population and Industrial Centers
- Identifies Competing Facilities within Region
- Identifies the Region that will Benefit
7WHAT THE DEMAND ANALYSIS TELLS US
- Is this Project Feasible in light of
- Current and Projected Volume of Air Cargo
- Capacity Constraints at Competing Airports
- Achievable Levels of Cargo Diversion
- Market Growth Potential
- Ideal Airport Location
- Types of Shippers and Freight within Region
(Wholesale, Retail or Combination)
8SUPPLY ANALYSIS
- What Air Cargo Market will this Facility Serve?
- Air Cargo is NOT Generic
- Air Cargo Service is NOT Generic
- Wholesale Industrial/Manufacturing Shippers
- High Volume per Customer, High Frequency
- Heavy reliance on Forwarders and All-Cargo
Charters - Manufacturing Centers, Industrial Park
Concentrations - Retail Consumer and Business Shippers
- Low Volume, Sporadic Frequency
- Heavy Reliance on Integrated Express Carriers
- Large population and Urban Centers
9SUPPLY ANALYSIS
- Who will Provide the Service?
- Integrated Express Carrier
- All-Cargo Carrier
- Freight Forwarder
- Commercial Passenger Carriers
- Develop the Facility Based on the Anticipated
Service Provider They are Your Customer.
10AIR CARGO AIRPORT TYPES
- Three Types of Air Cargo Airports
-
- Local Market Station Offers Service to
Surrounding Market Area or Catchment Area - Hub (Regional and National) Consolidates and
Distributes Network Flows - International Gateway Consolidates and
Processes International Material
11AIRPORT LOCATION FACTORSIntegrated Express
Carriers
Catchment Area is Small Up to 100 Miles
Markets are Tightly Defined Airport Must Be
Located Near the Largest Concentration of
Customers
12AIRPORT LOCATION FACTORS Freight Forwarders and
All-Cargo Carriers
Catchment Area is Large Up to 600
miles Willing to Truck Greater Distances
Loosely Defined Market Areas Multiple Competing
Airports Can Serve a Single Catchment Area
Local Market Stations are Customer
Locations Flexibility - Networks are Fluid
13DEVELOPING CRITICAL MASS
- Necessary Ancillary Support to Facilitate Air
Cargo Operations Include -
- Interstate/Highway Access
- Distribution/Intermodal Facilities
- Warehouse Space
- LTL Trucking
- Ground Handling
- Customs
- Typically an Evolutionary Process
- An Anchor Tennant Will Jump-Start Necessary
Critical Mass -
14ANCHOR TENNANT
- A Single Airport User that Can Initiate and Drive
Facility Usage. -
- User Can be Either an Air Cargo Carrier or a
Large Volume Shipper - Air Cargo Hub, Local Market Station or Gateway
- National Distribution Center
- International Manufacturer-FTZ Tennant
15Successful All-Cargo or Cargo Focus Airports
- Alliance Dallas, Texas
- Rickenbacker Columbus, Ohio
- Huntsville Huntsville, Alabama
- Airborne Airpark Wilmington, Ohio
- So. Cal. Logistics Airport Victorville, CA
16ATTRACTING AIR CARGO SERVICE
- Market the Location!
- Air Cargo Carriers Must Operate from Airports
Near Customers (Catchment Area) Highlight Local
and Regional Customer Base - Proximity Criteria is Dependant on Type of
Carrier and Airport Function Understand Target
Carrier Networks and Operations - Airport Facility Quality is Secondary to Location
Sell the Location not the Airport
17ATTRACTING AIR CARGO USERS
What Are the Marketable Benefits? Cost, Time and
Reliability Increased Freight Connectivity
Reduced Drayage Costs Access to New
Markets J.I.T. Manufacturing Capability Enhanced
Distribution Efficiency/Options
18TARGET INDUSTRIES
- High-value products, short life cycle products,
time-critical J.I.T. and spare part goods. - Aeronautics - Equipment Parts
- Automotive - Equipment Parts
- Pharmaceuticals
- Computers Computer Components
- Diagnostic and Medical Equipment
- Software
- Textiles - Garments
- Perishables - Flowers, Fruit, Vegetables Fish
- Economic perishables - Printed material
- Telecommunications Equipment - Cell Phones,
Pagers -
19ULTIMATE GOAL
Increase Regional Competitiveness via Increased
Freight Connectivity, Efficiency and Access to
Markets Air Cargo Operations Can Provide a
Competitive Advantage to Regional Economic
Development Efforts. Efficient Air Cargo Access
can Provide a Tangible Marketing Tool for
Attracting New Businesses. Most Air Cargo
Intensive Target Industries Exhibit Desirable
Economic Characteristics.