After years of growth, air freight shipments out of Tampa International have been hit hard by less expensive shipping alternatives and competition from Orlando International Airport.
By STEVE HUETTEL
Published September 15, 2003
[Times photo: Ken Helle]
Robert D'Angelo places cargo onto a conveyor while loading a Southwest Airlines jet at Tampa International Airport. In general, air freight shipments are down due to the weak economy and airline cutbacks.
ST. PETERSBURG - Diners at the Outback Restaurant in Kansas City, Mo., didn't know it, but the swordfish on their plate Wednesday was quite the seasoned traveler.
Caught in the Pacific Ocean the previous weekend, the fish flew Monday from Chile to Miami in an iced plastic foam box. A truck carried the fish to wholesaler Save on Seafood in St. Petersburg, where it was sliced into 11-ounce steaks.
Workers placed 20 portions in plastic trays, which were sandwiched between dry ice in a box with an inflatable insulating liner. An air shipper picked up the box Tuesday afternoon and delivered it to Outback in Kansas City - via Orlando and Dayton, Ohio - by noon the next day.
"It's a small world," says Gib Migliano, owner of Save on Seafood, which ships more than 50,000 pounds of fresh seafood to restaurants by air each week.
The air cargo business enjoyed virtually uninterrupted growth after World War II as companies such as Save on Seafood found new markets for time-sensitive goods and clients kept lean inventories through "just-in-time" deliveries.
But the bubble burst with Asia's economic downturn in the late '90s, followed by the U.S. recession.
Air shipments dropped with declines in manufacturing and sales. Air cargo carriers also were hurt by frugal customers who cut costs by choosing two- or three-day delivery by truck instead of overnight air.
"Companies are "buying down' now," said David Wirsing, executive director of the Airforwarders Association, a shipping industry group. "They used to need it there yesterday. That's not necessarily the mode now. An awful lot has moved to surface (transportation)."
Ailing passenger airlines, which haul about 22 percent of air cargo, were especially hard hit. Most carriers cut flights and replaced large planes with smaller ones as the ailing economy and fears about terrorism kept people from flying. That meant less space for cargo.
After the Sept. 11, 2001, attacks, the U.S. Postal Service required screening of all mail weighing more than 16 ounces. Airlines said they couldn't comply and lost a big chunk of their lucrative mail business.
Cargo makes up only about 5 percent of airline revenue. But it can be the difference between a flight making a profit or taking a loss in a business of thin margins.
A study during the heyday of the late '90s showed the airlines enjoyed profit margins of 15 to 20 percent on cargo, up to four times as much as carrying passengers, said Michael White of the Air Transport Association, an airline industry group.
The dropoff in cargo traffic has been especially steep at Tampa International Airport. Cargo volumes began a four-year slide in 1998, mainly because Orlando International had more outbound flights and many more large, twin-aisle jets with extra room under the passenger cabins for freight.
The Postal Service shifted much of its locally collected mail to Orlando. American Airlines closed its Tampa cargo office in 2000. Then, cargo carrier Emery Worldwide pulled out its planes and began trucking local freight to Orlando.
Cargo rebounded last year but still didn't match the volumes of a decade earlier.
Now the air cargo industry is bracing for more potential fallout from the threat of terrorism.
Unlike travelers' luggage, air cargo that rides beneath passengers gets no physical screening. Lawmakers such as U.S. Rep. Edward Markey, D-Mass., call that a gaping hole in aviation security and want federal regulators to require screening of all cargo.
The Transportation Security Administration (TSA) is due to release draft cargo security rules as soon as this month. Most experts expect the agency will require tighter background checks on companies that ship goods by air.
But airlines and air cargo shippers worry that mandatory cargo screening with X-ray machines or other technology would bring overnight air delivery to a halt, said Paul Page, editor of the monthly industry publication Air Cargo World.
"The reactions range from concerned to aghast at screening cargo the way passenger baggage is screened," he said. "The sheer volume, weight and shape (of cargo), and the nature of cargo schedules make that extremely difficult, if not outright impossible."
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It's 4:30 one recent morning at a remote spot on the north end of Tampa International Airport. A half-dozen trucks and vans - some unmarked, others with company names such as 5-D Tropical, Kraus Tropicals and Above the Reef - wait to unload at the Southwest Airlines cargo dock.
Cargo isn't a huge business there. The airport was the 31st-busiest in North America in passengers last year. But in cargo, Tampa International ranked No. 54, behind cities such as Des Moines, Iowa, and Columbia, S.C.
The Tampa Bay area has never been the kind of manufacturing hub that supports a thriving air cargo trade. But businesses such as Hillsborough County's tropical fish farms couldn't survive without it.
With their fish packed to survive 24 to 48 hours, the farms need the speed of air delivery. Most can't afford to pay a premium for a brand-name, door-to-door service such as FedEx, which also flies out of Tampa International. So they drive their loads to the passenger airlines' cargo facilities.
Russell Buzbee's U-Haul truck with 300 boxes of fish and aquatic plants had to be pulled to the loading dock by a tow truck after a wheel came loose. His company, Buzbee Tropical Resources of Riverview, is shipping to wholesalers in Oklahoma City, Buffalo, St. Louis and Lubbock, Texas.
Tropical fish make up most of the airlines' cargo, but Buzbee sees a wide variety of goods on his airport trips. "You're guaranteed to see a coffin or two," he says. "And a lot of nightclub fliers. Boxes and boxes on Wednesday and Thursday to big cities across the U.S.A."
Airlines don't release statistics but say tropical fish, human remains, printed material, fresh seafood and vegetables top the list of cargo shipped from Tampa International.
Getting his fish to certain markets has become more of a headache in recent years, said Mike Hennessy, an owner of EkkWill Waterlife Resources.
Flights to cities such as Greenville, S.C., and Charleston, W.Va., are now made mostly with small regional jets and turboprops instead of full-size jets because airlines reduced capacity to match declining passenger demand following 9/11, he said.
That means airlines on some days can't guarantee there will be room for his fish in the small cargo compartments. Rather than risk the fish getting stuck, to fatal effect, at a hub such as Atlanta or Charlotte, N.C., Hennessy has to ask the customer to wait.
The weak economy also has made customers much more discriminating about shipping options and their costs, said Pat Bailey of Evatone in Clearwater, which produces printed materials, audio cassettes, custom CDs and DVDs.
Many trucking companies now guarantee two-day delivery from the Tampa Bay area to destinations on the East Coast and New England, she said. Only about 20 percent of the orders Evatone ships now travel by air, about half as many as a couple of years ago, Bailey said.
"In many cases, it's not as important for them to have it the next day if I can save them $400 or $500 and they can have it in another day," she said. "They used to see (air delivery as) just part of doing business. Now, they see it as part of their bottom line."
* * *
Air shippers hope customers will come back when the economy rebounds.
Their biggest concern is what new requirements the federal government will impose to tighten scrutiny of air cargo.
Critics renewed questions about lax cargo security last week after news reports that a shipping clerk arranged to have himself flown in a wooden crate from New York to Texas to visit his parents.
Air cargo receives little federal oversight. One of the few rules is that only companies that have a history of shipping with an airline or a cargo handler, called a freight forwarder, are allowed to send shipments on passenger aircraft.
But critics in Congress say the "known shipper" program is full of security holes that terrorists could slip through.
The government, for example, doesn't require background checks on employees of companies that ship air cargo or freight forwarders that handle it. Airlines don't always verify the identities of workers who drop off cargo.
Markey, the Massachusetts Democrat, insists the only way to ensure aviation safety is to examine cargo the same way the government screens passengers, their luggage and even their shoes at the airport.
As the Transportation Safety Administration completes new cargo rules, airlines are saying little about the issue.
"We are in full compliance with cargo security today and in many cases go beyond what's required," said Brian Rohlf, director of customer operations for Delta Air Lines' cargo division.
But airlines are furiously lobbying Washington to head off mandatory cargo screening, said Page, the editor of Air Cargo World.
Shippers and air carriers told Sen. Diane Feinstein, D-Calif., that they could process just 4 percent of daily cargo if the TSA required them to X-ray or scan every package for explosives.
Cargo experts expect the agency will impose a variety of procedures to beef up security without crippling the industry, Page said.
Those could include:
- A cargo profiling system akin to the computer profiling used to identify potential terrorists. The system could, for example, flag shipments that don't match the type or size of cargo a company historically sends.
- Inspections of "known shippers" by the government or other third parties.
- Random screening of amount of cargo.
"The idea is to create a program that takes in a lot of facets," Page said. "If it's not 100 percent reliability, at least it creates walls against terrorists."
