US forwarders call for $5B in air cargo support

The Airforwarders Association (AfA) and the National Customs Brokers and Forwarders Association of America (NCBFAA) are calling for a state- or federally funded air cargo support fund for U.S. airports to combat losses spurred by the COVID-19 pandemic. Based on the results of an AfA survey of more than 400 airfreight stakeholders, the two organizations recommend the industry implement cargo community systems (CCSs) , improve employee compensation and implement more comprehensive training programs for recruitment and retention. The findings are detailed in the Oct. 18 whitepaper “Safeguarding the future of air cargo: its economic importance and critical need for investment.” To achieve these goals, U.S. airports urgently need as much as $5 billion for operations for the next three years, AfA Executive Director Brandon Fried told Air Cargo World . The fund is not specifically intended for infrastructure, but rather “an allocation of dollars to improve throughput for cargo,” Fried said. The fund could go toward the “acquisition of hardware and software for electronic communication, enhanced screening technologies, training and supplemental staffing,” he added. “The infrastructure applications would be theoretically applied to landside and airside construction for which cost recovery (for airports or private developers) is problematic.” Outside funding would enable new development at airports while controlling adverse financial impacts on cargo tenants, such as industry downturns, as well as encouraging an expanded role for the private sector in cargo facility development, Fried said. $40B in pandemic losses [caption id="attachment_64519" align="alignright" width="375"] Photo/LAX[/caption] Meanwhile, the Airports Council International North America (ACI-NA) estimates that airports have amassed at least $40 billion in losses due to the pandemic, according to the report. To keep operations running smoothly, airports will need $115 billion through 2026, or more than $20 billion annualized, adjusted for inflation, for infrastructure needs, ACI-NA noted. Part of the dilemma in funding lies in cargo being less profitable for airports than passengers, Fried noted. As a result, airports still prioritize the passenger business. “Cargo has always been this redheaded stepchild,” Fried said. “A lot of airports and some airlines value it, but don't forget, it's only about 5% of an airline’s revenue. We can talk about it being 35% of the value of the goods flown, but it’s not the majority. [Airports are] in the business of passengers, and passengers want beautiful terminals, easy access and all that stuff.” Due to the lack of federal investment, many airports need infrastructure updates, like widening airport roads to accommodate larger vehicles, he said. Funding recommendations To implement the funding, the forwarders recommend that either states or the federal government: Create state-based centers to fund infrastructure projects solely for air cargo, including technology, safety and sustainability initiatives; Create a prioritized list of cargo projects with estimations of capital and timing requirements; Create a panel of public and private sector stakeholders to determine potential amounts that each state can contribute, exclusive of private sector participation; and Require government audits of allocations and project management, with the potential for states to lose funding if project goals aren’t met. Taking no action could lead to further delays in shipping and escalating costs for modernization, leading to a potential shift to alternate modes of transport, the report warns. Other potential impacts include the inability to adapt to future challenges such as pandemics or recessions, job loss and disincentives for the private sector to invest, the report added. See also: Ongoing US congestion encourages smaller airports to tap cargo potential The largest round of federal funds for U.S. airports came from a $25 billion investment as part of the Infrastructure Investment and Jobs Act (IIJA) passed in November 2021, according to the Federal Aviation Administration (FAA) website. The funds, intended for projects as wide-ranging as passenger terminals or sustainability projects, have already been distributed, starting with $2.89 billion being made available for FY22. Airports expand As the industry clamors for additional funding, several airports are taking steps with federal funds. Pittsburgh International Airport (PIT) broke ground in September on a 77,000-square-foot facility funded by the U.S. Department of Transportation’s Better Utilizing Investments to Leverage Development (BUILD) program. In August, Capital Region International Airport (LAN) in Lansing, Mich., began a $13.8 million project to increase its cargo ramp space by 400,000 square feet. The project received 90% of its funding from the federal government and the other 10% from state and local governments. Other airports to begin major cargo developments include New York (JFK) , Dallas Fort-Worth (DFW), Atlanta and Philadelphia (PHL). The next major cargo facility renovation will come to Los Angeles International Airport (LAX), which this month requested proposals for the redevelopment of 27 cargo buildings, the newest of which opened two decades ago, according to the LAX website. The most recent federal funding came Oct. 12 in the form of a $32 million investment from the FAA for U.S. airports to expand their cargo infrastructures . However, Fried called this “a drop in the bucket.” Join Air Cargo World for our next webinar, “Dangerous goods in focus: Shoring up air cargo logistics,” on Tuesday, Nov. 15, at 11 a.m. ET. Click here for more information and to register.

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