November 1, 2014

New York stuns air cargo industry by proposing to shift JFK's cargo operations 60 miles north

Move to Stewart International would free up space for JFK modernization; forwarding industry believes plan will "fall on its face."

By Mark B. Solomon

If New York Gov. Andrew Cuomo has his way, the air cargo apparatus in and around Kennedy International Airport will pull up stakes and relocate to a new regional distribution hub at Stewart International Airport, located some 60 miles north in the Hudson Valley town of Newburgh, N.Y.

If the air cargo community has its way, the idea will die a quick, quiet death.

On Oct. 20, Cuomo, a Democrat, announced at an event in Albany that the state would establish a regional hub in Newburgh that would relieve JFK of most of its air cargo operations. Affected would be about 600 air freight forwarders whose business depends on the all-cargo and lower-deck—or bellyhold—traffic that moves in and out of North America's sixth largest facility by volume, according to 2013 data from the Airports Council International—North America (ACI). Ground-handling and customs services would presumably be impacted, as would over-the-road truckers that provide surface transport services linking JFK with other airports.

To facilitate the transfer, the state would establish a tax-free zone at Stewart known as "START-UP NY" that would provide incentives to companies to move manufacturing operations into one large distribution center, Cuomo said. FedEx Corp. and UPS Inc., the country's two largest parcel carriers, have regularly scheduled flights at Stewart, and the U.S. Postal Service and the Department of Agriculture have facilities there, Cuomo said. Stewart is "strategically positioned to expand into a larger air cargo role," Cuomo said. In his remarks, he offered no specifics on the relocation plan other than the creation of the tax free zone.

The relocation of JFK's cargo operations is designed to make room for a host of travel-related amenities that is part of a total redesign of the airport. Among the changes would be an enhancement of the airport's passenger mobility network, construction and expansion of hotels surrounding the airport, and offering airport guests an array of dining and shopping options, Cuomo said. The governor also announced major changes at LaGuardia Airport and Republic Airport on Long Island, which along with JFK and Stewart fall under the operation of the Port Authority of New York and New Jersey.

Cuomo announced in his "State of the State" address in January that New York would take control of construction at JFK and LaGuardia in an effort to reduce gridlock around the airports and make what he called "necessary improvements" to the facilities. JFK was built in 1960, and LaGuardia opened in 1939.

DISASTER LOOMS?
For those in JFK's deep-rooted and extensive air cargo community, the proposal smells like disaster. About half of JFK's cargo traffic moves in and out in the bellies of passenger airlines, and it is an open question as to whether these carriers, whose primary revenue source is passenger traffic, would be willing to divert flights to Stewart to accommodate freight flows, according to Brandon Fried, executive director of the Airforwarders Association, a trade group.

Then there is the existing JFK cargo apparatus, comprised of a labyrinth of providers that for years have endured the area's worsening air and road congestion, and the airport's high operating costs, because that is where the aircraft and cargo are. Fried doubts that many of the forwarders at JFK, many of whom have been there for decades and constitute a tight-knit village, would move to Newburgh.

Asked what his group would do to block the proposal, Fried replied, "I'm not sure what we will be fighting since the idea is so bad that it will fall on its face." Fried called the plan "half baked" and "impractical," adding that Cuomo did not consult with the forwarding industry before announcing it.

Fried said he saw a story about 10 days ago on the proposal but said it "seemed so ridiculous" that he didn't pay attention. Fried said he grew more concerned last Friday. At this point, Fried said his group is trying to obtain more details about the proposal.

The governor's office did not reply to two requests for comment at press time. A cargo representative from ACI did not reply to a request for comment.

JFK—like Miami International Airport, Chicago's O'Hare International Airport, and Los Angeles Airport—is classified as a "gateway" because it receives so much international air cargo traffic and has the network required to support it.

No one doubts that Stewart has the network and capacity to accommodate more business that it handles. An Air Force base until it was closed in the early 1990s and transformed into a commercial facility, Stewart has long runways capable of handling the biggest aircraft. It is at the juncture of Interstate 87—which runs southbound into New York, and Interstate 84, which connects Pennsylvania, Connecticut, Massachusetts, and New York.

Besides Stewart's close proximity to New York City, it is within 250 miles of seven major U.S. and Canadian cities. Its website touts Stewart as "perfectly situated for efficient distribution of air cargo to and from...the Northeast, mid-Atlantic, and the Midwest."

About the Author

Mark B. Solomon
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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