Advantage Anchorage

Eland Conway tells us more about a record breaking year for cargo at Ted Stevens Anchorage International Airport and some ambitious plans to enhance its freight handling capabilities.

The coronavirus pandemic has caused global disruption and a downturn in passenger traffic the likes of which we’ve never seen before, and Ted Stevens Anchorage International Airport (ANC) was no exception, registering a 62% drop in numbers in 2020.

However, that doesn’t tell the full story, as 2020 turned out to be a record breaker for air freight, with cargo volumes at the Alaska gateway soaring by 15% on 2019, its previous banner year.

Indeed, the disruption to the global supply chain has sent ANC’s cargo volumes rising to more than 3.1 million tonnes.

Airport director, Jim Szczesniak, says: “The pandemic has highlighted ANC’s significance in the global supply chain. International passenger travel was decimated, seemingly overnight. The cancellation of those flights sent shippers – who traditionally rely on the cargo space available in the bellies of those passenger flights – scrambling for solutions.

“Air cargo carriers responded accordingly, recognising the strategic advantages of ANC’s location. A stop at ANC means higher payloads, more efficiency, and at a time when so many people are counting on expedited service from an already stressed supply chain – faster shipping!”

In addition to the loss of cargo space on international passenger flights, the demand for freighter space has been further exacerbated by increased demand for personal protective equipment (PPE) and booming e-commerce, as many have resigned themselves to a home-life of teleworking and self-imposed solitary confinement adopting online shopping as the preferred shopping experience in a new reality.

Anchorage has seen first-hand, the air cargo industry’s response to the pandemic. Before COVID-19, ANC touted daily service to 21 markets and an additional 23 markets with at least weekly service.

ANC now boasts daily widebody freighter service to 30 destinations and another 20 destinations with at least weekly service.

“In addition to an increase in frequency from our traditional ANC customers, we’ve also seen a few unexpected visitors, such Ethiopian Cargo, Longtail Aviation, AeroUnion and Ukraine International,” notes Szczesniak.

“Even the Antonov 225 and the New England Patriots plane moved some PPE through Ted Stevens Anchorage International Airport.”

The shortage of cargo space sent air carriers across the globe scrambling for aircraft. In early 2018, both UPS and FDX cut MD11 operations at ANC by nearly half as they brought newer aircraft online. In 2019, MD11 operations fell another 30%.

Since January 2020, ANC has seen UPS and FedEx’s MD11 operations steadily increase – spiking in May and June – to the highest number of MD11 operations since November 2017. A total of 443 and 442 landings for those months when combined with Western Global MD11 landings.

The airport is doubling down on its location and significant cargo transfer rights with new developments. ANC has the most liberalised cargo transfer rights in the United States.

Since 1996, cargo carriers have been allowed to: Interline transfer between foreign flagships; Interline transfer between foreign and domestic flagships; Online transfer between foreign flagships; Change of gauge; and Commingle US and non-US bound freight on the same flight.

“We have had these tremendous privileges to transfer cargo here at ANC for quite some time, but we’ve lacked the infrastructure to properly leverage them,” says Szczesniak.

“You cannot expect an Asian customer heading to LAX to drop a pallet of iPads, pharmaceuticals or other sensitive cargo on the ramp during the long sunny days of summer or the cold Alaska winter months and have to wait for it to be loaded on a connecting flight.

“ANC’s new facilities coupled with the transfer rights and ANC’s network of freighters will be a game changer.”

Before the pandemic, Alaska’s gateway to the world sought five proposals to develop its cargo infrastructure. To date, ANC has received proposals from Alaska Cargo & Cold Storage (ACCS); IC Alaska; 6A Aviation; UPS and FedEx that between them total more than one billion dollars in private development.

ACCS and 6A have fully executed lease agreements, with the latter set to break ground west of the north-south runway this spring in what will become the first development in the West Airpark. The remaining lease agreements are currently being negotiated.

ACCS, an Alaska based company has received, through the Alaska Energy Authority (AEA), a $21 million BUILD grant from the US Department of Transportation. Ground-breaking will commence in the fourth quarter of this year and be constructed in phases. The first phase being approximately 190,000 square feet.

UPS will be expanding their existing 35 acres footprint by an additional 28 acres, adding three more spaces to accommodate their growing fleet of B747-8s. The project includes a significant expansion of their cargo sort facilities, ground service equipment, and employee parking areas.

FedEx is also expanding their existing 63 acres footprint. The additional 19 acres will support its 98,000 square feet Domestic Operations Centre and nine new small aircraft positions. The new development accommodates all of FedEx’s local traffic allowing for more widebody international traffic at their existing facility.

IC Alaska is seeking to develop the largest development on the south side of the airport. The new facility will provide 14 flow through widebody parking positions, warehouse space, and seeks to capitalise on ANC’s strategic location to develop a global MRO operation.

Szczesniak says: “With 2,600 jet engines transiting through ANC annually, it makes perfect sense to conduct parts distribution and MRO here in Anchorage.

“Parts warehousing and distribution is much cheaper here, where land is cheap and space is ample, compared to the high rent and scarcity of space in many Asian cities.

“We also have a strong workforce to pull from. There are two universities with well-established aviation maintenance programmes and nine military bases in Alaska. Aviation is the life blood of Alaska.”

ANC is working to bring passenger travel and cargo together – leveraging newly expanded passenger transfer rights. The expanded passenger transfer rights mirror existing cargo transfer rights, which allow: On-line passenger transfer to US destinations; On-line passenger transfer with change of gauge; Interline passenger transfer to foreign carriers to foreign destinations; Passenger transfer to US carriers to US destinations; and Passenger transfer to US carriers to foreign destinations.

“We have analysed passenger aircraft performance and belly cargo capacity, and there is a substantial revenue opportunity for airlines to utilise ANC,” enthuses Szczesniak.

“For example, the Hyderabad, India, to LAX non-stop has a belly cargo weight penalty – a stop at ANC eliminates that penalty and allows for more than $64,000 in additional cargo revenue for each flight.”

“Transferring passengers and cargo at ANC creates synergies for airlines for more destinations, there are a lot of interesting route combinations that can benefit from routing through ANC.”

Adversity often spawns creativity, and the pandemic has provided nothing if not adversity. At a time when the aviation industry is facing adversity head-on, ANC is working hard to garner the attention of the industry seeking new creative ways to operate.