Why Anchorage International Airport is such a big cargo destination – and how it could get even bigger

Cargo traffic through Ted Stevens Anchorage International Airport has increased during the COVID-19 pandemic, with dozens of jets arriving daily from Asia.

They brought with them computers, cell phones, pharmaceuticals and other items. in high demand from those confined to their homes in Lower 48, airport officials said.

Directed jets the other way around, Canadian lobster, Washington state cherries and more, said airport manager Jim Szczesniak during a recent visit to the airport.

“There is the lobster plane,” he said, waving to a Sky Lease Cargo jet.

In total, the airport landed 3.2 million metric tonnes of cargo last year, a 15% increase as e-commerce boomed along the world’s busiest trade route – from l ‘Asia in the United States.

The growth of Anchorage airport well in advance competition, making it the fourth busiest in the world for freight, after sixth place.

Despite this growth, the airport does not have the services of its competitors, Szczesniak said.

Much of it is a refueling and crew change site for jumbo jets to other airports.

But a series of proposed projects for the airport, valued at $ 1 billion, could help transform it into a more versatile stopover for cargo jets, he said.

For the first time, giant new warehouses would allow one of the airport’s nearly 30 international carriers, such as China Airlines or Korean Air, to store items for efficient shipping.

As it stands, cargo jets occasionally meet on the tarmac to swap goods, limiting options and requiring coordination, officials said.

Another proposal for a cold storage facility, which is part of a $ 200 million project, could increase shipments of frozen or perishable goods, including seafood from Alaska.

FedEx and UPS, which operate cargo sorting centers that transport about a quarter of the cargo landed from the airport, are also planning large expansions, airport officials said.

The projects were announced starting in 2019, as developers sought leases for raw land around the airport. They are now in different phases of design and engineering, he said.

They represent the greatest chance for growth in freight services for the airport, he said.

If they were built, they would create hundreds of jobs, serving as a potential counterbalance to Alaska’s struggling economy.

“We’re trying very hard to maximize that asset to get (Alaska) out of this decline,” Szczesniak said.

Perched halfway between Hong Kong and Lower 48, Anchorage Airport is geographically blessed for freight service, said Darren Prokop, economist and professor of logistics at the University of Alaska Anchorage.

Cargo jets can fly directly over Anchorage if they choose, he said.

But they can instead refuel at the airport, allowing them to carry less fuel and more freight for which they are paid.

This aviation fuel is relatively inexpensive, as the airport is part of a foreign trade zone administered by the nearby port of Alaska where the fuel arrives. This means the fuel avoids tariffs that can raise prices elsewhere, Prokop said.

The airport has another advantage over its competitors, Prokop said. Unlike airports elsewhere in the United States, foreign carriers can legally transfer cargo between jets at Anchorage Airport. The exemption was obtained by the late Ted Stevens in 1996 and strengthened in 2004, he said.

Carriers are reluctant to take advantage of it. They fear it’s illegal in Anchorage because it’s illegal elsewhere, he said. In addition, it is necessary to time the schedules of the jets.

“Hence the freight facilities,” said Prokop.

If the new facility is built, the foreign jets can still transfer the product without having to worry about making sure the other plane has arrived. And they can do it more efficiently, at more convenient times, in freight facilities.

Prokop said that in the long run, the airport is expected to see continued gains in freight due to strong demand in the United States for products from Asian countries.

“We are the gateway city to Lower 48,” he said.

During the pandemic, cargo flights from an increasing number of Asian cities began to pass through Anchorage. To get products to the Lower 48 faster, they bypassed major hubs such as Shanghai or Hong Kong, Szczesniak said.

What will happen as the pandemic abates is uncertain.

Szczesniak said he believes changing routes and the continued growth of e-commerce are factors that will help supplant the pandemic-related issues that have propelled freight to Anchorage.

“The pandemic has heightened Anchorage’s importance in the global supply chain,” he said.

John Tichotsky, former Chief Economist of Alaska, is a partner IC Alaska. The company plans to build a maintenance hangar to provide mechanical work to jumbo jets at the south end of the airport.

The hangar is part of a $ 500 million proposal that also includes new cargo storage and sorting space. In addition, 14 “rigid supports” would allow cargo jets to refuel, connect to power, and transfer cargo.

The project will change the airport from the equivalent of a stand-alone gas pump to a full-service station, Tichotsky said.

Lease negotiations for the airport land are being finalized, he said. The hard stands could open as early as next year.

“I can’t identify anything (in Alaska) that will come online faster and produce greater economic benefit than providing infrastructure at the airport,” Tichotsky said.

• FedEx plans to expand its existing operations by 19 acres, building a new center to sort domestic cargo, as part of a $ 60 million project. Sorting of international cargo will continue in the current transfer center.

• 6A Aviation proposed construction of a 195,000 square foot warehouse and six parking spaces for cargo jets, a $ 170 million project on the west side of the airport.

• UPS plans to expand its existing 28-acre facility and add space for three large freight jets, a $ 110 million project.

The UPS expansion will occupy much of the northern part of the airport, Szczesniak said.

“It’s going to be a whole big and giant UPS campus,” he said during the visit, pointing to an expanse of raw land that extended up to a hill.

Construction on the cold storage project could begin later this year, officials said.

In addition to supporting international businesses, cold storage could help Alaskan businesses that want to ship seafood or peonies, said Joe Jacobson of McKinley Capital Management, a partner in the project.

The plan is to capitalize on the traffic that currently exists at the airport. Any growth would be a bonus, he said.

“Right now there is an opportunity not realized just with existing traffic,” Jacobson said.

The freight industry was a bright spot in Alaska last year, as the pandemic hit other sectors, said Bill Popp, director of Anchorage Economic Development Corp.

Among other benefits to Anchorage, he brings in hundreds of cargo pilots daily who help fill hotels and support restaurants. (A cargo plane pilot was the first confirmed positive case of COVID-19 in Alaska on March 11, 2020.)

The freight business is responsible for a large part of the employment at the airport. The airport supports about 10% of jobs in Anchorage, he said.

Recently, FedEx ad it hires more than 200 workers to create its first permanent night shift to sort parcels at the airport.

Popp said he was optimistic the cargo in Anchorage will remain strong, increasing the chances of projects being built, he said.

Prokop, the logistics professor, said the new warehouses could one day support new manufacturing businesses in Anchorage. Parts stored at the airport could be assembled into final products that can be shipped elsewhere.

“In 10 or 20 years, we’ll see if that leads to value-added manufacturing,” he said.