Printer Friendly

By sea and by air.

BY SEA AND BY AIR

SEA-AIR SHIPPING HAS MIDdle-of-the road appeal. Offering faster delivery than all-water transit and lower cost than all-air routing, combined water and air transport is an attractive compromise suiting both service and bottom-line criteria of many companies competing in the global marketplace.

The sea-air specialty has matured in the last five years, particularly as a means of delivering Asian cargoes to Europe and South America. Only a small segment of transportation is routed via sea-air at major hubs for the traffic, but availability of the service enhances a location's appeal as a center for freight firm operations.

Bill Liddicoat, manager of air cargo development for the Port of Seattle, estimates Asia to Europe sea-air cargo transiting that port grew almost 60 percent from 1988 to 1989, increasing from 25,000-39,000 metric tons. Although cargoes that also transited Seattle-Tacoma International Airport rose from 15,900 metric tons in 1988 to 17,400 metric tons in 1989, the airport's share of last year's Asia to Europe sea-air cargoes shrunk to 42 percent from 64 percent in 1988. The remainder of sea-air shipments were moved by truck or rail to other North American airports.

Now officials with Anchorage's seaport and airport have designs on attracting sea-air business to Alaska. With $50,000, the Port of Anchorage and the Alaska International Airport System are jointly funding a study by Manalytics Inc., an international trade and transportation consulting firm, to assess the feasibility of and requirements for luring sea-air traffic to Alaska. Says Elliot Schrier, president of the San Francisco company, "The objective of the study is to find out if sea-air makes sense through Anchorage and to put together the cost and service picture."

Alaska's location equidistant from the world's largest markets - Europe, North America and Asia - gives it an edge on major West Coast U.S. hubs for sea-air traffic. Sailing time between East Asia ports and Anchorage is about two days shorter than to Seattle; about four days shorter than to Los Angeles. Further, flights from Anchorage to European cities average three hours less air time than do those from Seattle.

But by no means a shoo-in as a sea-air competitor, Anchorage first must prove it can deliver. Air transportation is the city's strong point - more cargo transited through Anchorage than any other U.S. airport last year. But the necessary water transportation is nonexistent. Unless the state can attract regular service from East Asia, sea-air is sunk.

Anchorage's situation is the reverse of transportation capacity at proven sea-air hubs. Typically, abundant water service is available, and air cargo capacity is restricted. According to James Boitano, Seattle sea-air coordinator for Nippon Express, that company's sea-air business has been limited by space available on air carriers. "I'm sure if another air cargo airline entered the market here, we could grow faster," he says.

Nippon Express is one of the largest freight forwarders providing sea-air service in Seattle. Another is Combined Transport Services. Margey Thoresen, branch manager in Seattle for Combined Transport, agrees that there's limited air lift out of Seattle, or at least lift available at costs low enough to allow freight forwarders to price their products competitively. Rather than buy premium-priced space - which, sometimes is all that is available - the company often keeps time-sensitive sea-air cargoes moving by trucking to other airports; Montreal, for example.

Sea Tiger, developed as a service of Flying Tigers and now offered by Federal Express, was developed as a formal sea-air product in the 1970s. JoAnn Miller, manager of Sea Tiger Services in Los Angeles, says, "In the past, carriers had more space available and would discount to sea-air customers because of the opportunity to haul a lot of cargo short term." But changes in capacity have reduced the availability of low-priced air freight and the ability of agents to move their business from carrier to carrier chasing the cheapest price.

The growing air cargo market and increasing demand for freight services could pry the sea-air door open for Alaska. Competitive carrier service fees, room for expansion, and use by numerous world carriers as a technical stop - for refueling, maintenance and crew changes - make Anchorage International Airport an attractive gateway for air carriers and forwarders moving sea-air cargo...if only water carriers hauling containerized Asian cargoes regularly docked at the city's port.

The only scheduled marine service to Anchorage travels between Tacoma and Anchorage. Charter vessels do haul exports from Anchorage to Asian markets, carrying cargoes such as petroleum, cement, timber and automobiles, but there has not been sufficient demand for regular routing across the Pacific.

Several ways have been proposed to land suitable water transportation at the port: an added stop in Anchorage to a containership's West Coast-Far East service; a shuttle service between Asia and Anchorage that would transfer cargo containers bound for the Lower 48 to vessels already sailing between Alaska and Tacoma; and regular service of a vessel with a flexible configuration that could accommodate Alaska forest products or mineral westbound and containers eastbound.

Anchorage differs from established sea-air hubs in other ways, too. Dave Rystrom, manager of trade development for the Dallas Fort Worth International Airport and former manager of aviation marketing for the Port of Seattle, says typically sea-air transportation is only about 2 percent of a steamship line's business, but it does generate higher revenues than other cargoes.

Although Anchorage could create westbound cargo loads for East Asia - for example, fish products that now are exported after shipment to Tacoma or carried direct by American President Lines vessels from Dutch Harbor - the city is not a destination market for Asian goods. Due to its relatively small size, Anchorage does not offer carriers immediate access to large consuming markets, as do Seattle and Los Angeles.

Compounding that drawback is the lack of connections via railroad and truck to other centers of commerce. Seattle and Los Angeles both are inter-modal distribution hubs that offer access to highways and rail lines used to move containers as far as the East Coast or Florida. Often sea-air shipments are broken into portions bound for different markets. For example, a shipment of Japanese-made business equipment might be divided for air delivery to Europe and for trucking to Miami to be sent air cargo from there to South America.

Despite those disadvantages, Rystrom says that if Anchorage could deliver shorter sailing time and shorter flight time with lots of lift available from the airport, the combination might reduce cost. "In the transportation business, decisions always get down to money," he says.

An innovator in the sea-air business, Rystrom introduced the traffic to Seattle. He suggests that convincing freight forwarders of the advantages of doing sea-air business in Anchorage would help to create demand for water carrier services.

Freight forwarders are eager to gain market share and offer competitive packages by reducing costs to customers. "If one (major forwarder) gets into the market in Anchorage and starts to gain market share, the rest will be forced to do the same to remain competitive," Rystrom explains.

A major incentive to create the Seattle sea-air market was keeping the business of Cargolux, the largest European air cargo airline. Rystrom recalls about six or seven years ago, the carrier faced a shortage of demand on return flights from Seattle to Europe. To resolve the problem, Rystrom enticed Japan-based Nippon Express to examine ways to increase use of the route.

"We broke down time segments and came up with a formula of about 50 percent faster service than by water from Japan to Europe and about 50 percent cheaper. They took the idea back to the Tokyo office. The rest is history," he says. In addition to attracting cargoes to the Port of Seattle, the sea-air service helped to increase Cargolux's use of the airport from once a week to five times a week and to draw new carriers.

Sea-air transport via Anchorage would generate seaport traffic and help to maintain and enhance Anchorage International Airport's attractiveness as a carrier stop. With revolutionary changes shaking the aviation world, particularly the introduction of longer range planes and the opening of Soviet air space, the airport's managers recognize the need to create new carrier incentives.

Mark Butler, marketing manager for the Alaska International Airport System, says although Anchorage can't replicate Seattle's sea-air service, it might fill certain niches. "If we could get a major water carrier to start delivering from Asia, a lot would change," he says. "We believe its worth the money to explore."
COPYRIGHT 1990 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Anchorage, Alaska; sea-air transportation
Author:Griffin, Judith Fuerst
Publication:Alaska Business Monthly
Date:Apr 1, 1990
Words:1416
Previous Article:Marine transport: back on an even keel.
Next Article:Push & pull.
Topics:


Related Articles
Cargo transportation; changes in motion.
A shipper's guide: how to win in the sport of freight transportation.
Charting steady courses: with no waves of growth on the horizon, Alaska's water transport competitors will focus on maintaining market share.
May Alaska Trends.
November Alaska trends.
January Alaska trends.
Shippers (Rail/Trucking).
Alaska trends for July 2004 sponsored by Waste Management of Alaska.
Alaska freight just keeps on going and going: freight moving in and out of Alaska moves over mountains, across stormy seas and through glacier-gilded...
Alaska trends for March 2005 sponsored by American Fast Freight.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters