Winds of change blast Alaska's air cargo industry.

• Author: Petrovsky, Mike
• Position: Alaskan airport officials plan ways to boost Alaska's air cargo industry

Winds Of Change Blast Alaska's Air Cargo Industry

Although changes in global air routes and the use of new, longer-range aircraft threaten Alaska's air-cargo prominence, new freight-handling roles may be in the offing.

In the refueling business, location is everything. Although Alaska's two major airports have been benefiting from location for years, airport officials say Anchorage and Fairbanks international airports already have lost the role of crossroads for international travel and in about six years also will lose leverage in a now-booming international air-cargo market.

In 1990, the number of international passengers using Anchorage International Airport dropped because of increasing use of long-range Boeing 747-400 jets and the opening of Soviet air space. Boeing's cargo version of the 747-400 is expected to be rolling off the Seattle assembly line in 1994, and Alaska airport officials predict that most European and Pacific Rim air-cargo haulers will be using the jets by 1997.

Similar to the plight of a gas station owner who sees business shrink with the completion of an interstate highway that creates new traffic patterns, Alaska airport officials have some sobering decisions to make as the long-range jets take over the airways and bypass Alaska as a refueling stop.

"What we can do is diversify. Build up demand -- start pushing warehouse distribution for multinational corporations to consolidate inventories of high-yield products like perfumes and electronics," says Gina Marie Lindsey, executive director of the Alaska International Airport System. "I'm not talking |Field of Dreams.' The responsibility for forcing warehouse construction and development must be shouldered by more than just the airport."

Anders Westman, Alaska International Airport System's marketing manager, agrees with Lindsey that the expansion will hinge on private-sector involvement. "It's my opinion that in order for warehousing to work, Federal Express or UPS (United Parcel Service) has to take the initiative. We (airport officials) can prime the pump all we want. But I'm convinced international distribution warehouses are the logical next step. When and if we see it, it will come in the next two or three years, to be optimistic, and at most within the next five years."

Federal Express, by far the largest air-cargo hauler at the Anchorage International Airport, has had its engineers scout Anchorage for possible locations for an international warehouse system, according to Brandon Davis, the company's public affairs spokesman. He says Federal Express has received inquiries from several multinational firms interested in Anchorage as a logistical base to store high-value goods such as electronic parts or medical supplies that would be delivered on demand to locations around the world.

The freight forwarder and air carrier currently operates a national warehouse distribution center for International Business Machines in Memphis, Tenn., also Federal Express' national hub. Although the air cargo company operates international hubs in Indianapolis, Ind., and Brussels, Belgium, as well, Davis says only Anchorage is being considered as the site of a worldwide distribution center. Location is the reason.

Davis says decisions about the size and function of such a warehouse will be left to the shipper Federal Express would be serving. In Memphis, for example, Federal Express provides IBM with everything from the warehouse itself to a computerized inventory system and logistics personnel.

Lindsey says Anchorage's foreign trade zone provides an advantage for multinational companies wanting to warehouse goods on airport or adjacent private-sector property. Goods shipped into, stored in, or moved out of a foreign trade zone are...