U.S Airports Ramp Up Competition for Supply Chain Dominance

By Patrick Burnson, Executive Editor
March 25, 2014 - SCMR Editorial

Top U.S. airports are engaged in a fight for a larger share of the challenged U.S. air cargo market, according to JLL’s annual Airport Outlook Report. With world trade growing faster than demand for air cargo, both airports and air carriers face a significant challenge – how can they attract air freight and fend off competition from other cheaper modes of transport such as intermodal and trucks?

“Airport executives are increasingly focused on the bigger picture, specifically the role that their airport and the supporting infrastructure play in making shippers’ supply chains more efficient,” said Rich Thompson, Managing Director of JLL’s Ports Airports and Global Infrastructure (PAGI) group. “The market is not growing as a whole, so they must use every tool they have to stand out, and attract shipping volume.”

Instead of relying on airline revenues for driving growth, airports are focused on leveraging nearby commercial real estate assets and logistics corridors to position themselves as an essential link in the supply chain. In fact, some airports are now seeing more than 60 percent of their revenue derived from non-airline sources.

“There are two factors that could increase global air freight,” said Thompson. “The rapid growth of e-commerce sales to consumers who demand rapid package arrival, and the demand for time-sensitive and high value goods such as food, perishables, biologics and pharmaceuticals.”

Stifel Nicolaus analyst David Ross agrees:

“We certainly see a lot of growth in ‘cold chain,’ as biologics and other health care products are only increasing in demand from every part of the world.  Getting the right product in the right place at the right time can be vital,” he said.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The PMI, the ISM’s index to measure growth fell 0.8 percent to 52.7 (a PMI of 50 or greater represents growth). PMI growth has been at 50 or higher for 31 straight months (with the overall economy growing for 74 months), and the current PMI is 1.7 percent below the 12-month average of 54.4.

The current status of FedEx’ planned acquisition of Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion, which was initially announced in April, remains in flux, with continued actions being taken by the European Commission.

Panjiva said that the 1 percent sequential growth was in line with typically flat growth from May to June, as higher monthly growth typically takes hold in July and August in advance of the holiday season.

Hackett officials described this new offering as a short-term index that offers up “the sentiment for trade at a glance,” akin to other key economic metrics like the PMI and Consumer and Carrier confidence indices, while providing access to specifically see where a group of economic indicators are in relation to trade for the current month, too.

While many industry analysts contend that distribution centers near U.S. East Coast ports will see a surge of new business after the Panama Canal expansion, real estate experts say this phenomena is already underway.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.