Executive Briefings

Expanding Panama Canal Will Downsize Number of U.S. Air Cargo Hubs, Report Finds

An expanded Panama Canal will result in a smaller number of North American air cargo centers, according to the recently released North American Port Analysis by commercial real estate firm Colliers International. The report, titled "CapEx or Capsize," says air cargo's role in global trade will be defined by the tug-of-war between energy/infrastructure costs and e-commerce growth in the first post-Panamax decade, from 2015 through 2025.

Expanding Panama Canal Will Downsize Number of U.S. Air Cargo Hubs, Report Finds

"What we are trying to do is evolve the understanding of what's going on," K.C. Conway, the Colliers economist who authored the report, says. "The real story now is what is the inland story and from that who wins and who has the opportunity to participate the most. If we move a lot of cargo into ports, but we can't move it inland because the airports don't have the infrastructure, growth will be impeded in that particular region."

The Colliers report states that within three to five years, there will be just a half dozen dominant U.S. air cargo markets. Candidates include Memphis, Louisville, Columbus, Miami, New York, Miami, Los Angeles, Seattle and Denver. Because of the costs involved, air cargo in the U.S. will follow the same hub-and-spoke model adopted by passenger air carriers to maximize traffic. Airports that lack a port partnership won't be a dominant air cargo market in five years.

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"What we are trying to do is evolve the understanding of what's going on," K.C. Conway, the Colliers economist who authored the report, says. "The real story now is what is the inland story and from that who wins and who has the opportunity to participate the most. If we move a lot of cargo into ports, but we can't move it inland because the airports don't have the infrastructure, growth will be impeded in that particular region."

The Colliers report states that within three to five years, there will be just a half dozen dominant U.S. air cargo markets. Candidates include Memphis, Louisville, Columbus, Miami, New York, Miami, Los Angeles, Seattle and Denver. Because of the costs involved, air cargo in the U.S. will follow the same hub-and-spoke model adopted by passenger air carriers to maximize traffic. Airports that lack a port partnership won't be a dominant air cargo market in five years.

Read Full Article

Expanding Panama Canal Will Downsize Number of U.S. Air Cargo Hubs, Report Finds