Wednesday, November 07, 2012

Kodiak's air cargo business falling off, more cargo arriving by sea

KODIAK, Alaska — Kodiak's air cargo business has been declining for years.

With the departure of Northern Air Cargo last week, the situation does not appear to be changing anytime soon.

Since 2005, airport cargo traffic has plummeted from 16.6 million pounds to 9.8 million pounds — a drop of over 40 percent, according to the Kodiak Daily Mirror ( ).

Instead of using air cargo, more cargo is being sent by sea. The change is likely due to the rising cost of aviation fuel.

Northern Economics senior economist Jonathan King said Kodiak is unusual among Alaska locations because it ships out much more cargo than it receives. Most of that cargo is fish.

NAC was one of agent Doug Theis' biggest customers. The departure of the Fairbanks company meant he had to lay off an employee, one of the hardest things he's had to do in 13 years of business.

To keep paying the loan on his two-year-old freight terminal, he also had to raise the rates with Alaska Central Express, the smaller carrier that delivers Kodiak's mail.

"It took me down," he said of NAC, "but I'm not out by any means."

Alaska Airlines hauls the bulk of Kodiak's air cargo — estimates range between 70 to 80 percent — which means agents like Theis operate on the margins, vulnerable to the whims of freight companies, new taxes and regulations.

Kodiak air cargo traffic peaked in 2005 when Kodiak State Airport shipped out 12.9 million pounds and received 3.8 million pounds, according to U.S. Bureau of Transportation statistics.

In 2011, the airport shipped out just 7 million pounds and received only 2.8 million pounds — a drop of 41 percent from the 2005 figure.

In 2008, when air cargo bottomed out, state-owned ferries shipped 256 container vans from Kodiak. The following year, container traffic surged to 341. Through 10 months this year, 363 containers have traveled out of Kodiak aboard the ferries Tustumena and Kennicott.

A single 40-foot refrigerated container has a maximum capacity of 56,000 pounds — the equivalent of one and a half Boeing 737-400 airplane freighters.

Theis said he can sympathize with people who ship cargo on the ferries because, "After all, everybody wants a good deal, right?"
Information from: Kodiak (Alaska) Daily Mirror,

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