Unique Logistics is launching a flurry of air cargo charters from Southeast Asia to the U.S. for the peak shipping season, in the process testing the viability of Pittsburgh International Airport (PIT) as a more efficient gateway for reaching consumers across large swaths of the East Coast and Midwest.
On Monday morning a Cathay Pacific passenger-freighter rented by Unique landed in Pittsburgh with consumer goods, the first of 20 flights scheduled over the next 12 weeks on Boeing 777-300 Extended Range aircraft recently modified without seats to increase cargo volume. The flights will originate in Ho Chi Minh City, Vietnam, stop at Hong Kong International Airport and land in Pittsburgh every Monday and Thursday.
All the flights are dedicated to a single fashion apparel retailer, Marc Schlossberg, executive president air cargo sales at Unique Logistics International (NYC), said in an interview.
Beginning in early October, the freight forwarder also plans to control a freighter operated by a Middle East airline to ship goods weekly from India, Bangladesh and Pakistan to Pittsburgh for a year via the carrier’s home base. Schlossberg would not disclose the carrier, but did say it was not Emirates. Qatar Airways flew all-cargo aircraft to PIT for two years until December, according to the Pittsburgh airport’s newsletter, and could be a possible candidate because of its familiarity with the facility.
In addition to the flights operating to Pittsburgh, Unique is chartering a half-dozen freighters to Los Angeles, half a dozen to New York’s JFK and Newark, New Jersey, and split-chartering with a Shanghai-based company for 17 Boeing 747 freighter flights to Chicago operated by National Airlines over the next two months, Schlossberg told FreightWaves.
Emirates will operate the five weekly flights to Newark beginning Thursday. Taiwanese carrier EVA Air will operate five weekly flights to Los Angeles starting Saturday and Philippine Airlines will operate a couple of ad hoc flights to Los Angeles and New York in October, he said.
All the flights originate in Hanoi, with connections through Taipei, Dubai and Manila, respectively, to comply with international aviation rules. As previously reported, cargo flights from Vietnam to the U.S. are on the increase this year because of tight capacity and elevated rates.
Unique Logistics, originally a Hong Kong-based joint venture, recently moved its headquarters to New York after changing to a single ownership and management structure three months ago.
Pittsburgh’s cargo advantage
Officials at PIT have made cargo a major business focus as they look to build the airport into an international logistics center. In addition to investing in new infrastructure, they are working to attract more airlines by marketing its strategic location, within a 24-hour drive of about two-thirds of the U.S. population, and ability to handle freight quickly because of less congestion. They say cargo has held steady this year despite the steep drop in passenger traffic because e-commerce has increased shipments for package carriers FedEx and UPS. Earlier this year, National Airlines carried personal protective equipment from South Korea to PIT on five flights for the Federal Emergency Management Agency.
Secondary airports with large runways are proving popular with cargo owners and logistics companies frustrated with backlogs and delays retrieving cargo from big international passenger hubs. They have shorter taxi times to the ramp; aircraft can park adjacent to warehouses; offloading and organizing shipments for truck delivery is faster; customs clearance gets priority; and there is more land for expansion. Accessing one’s cargo at major airports can take a day or two, but this year logistics executives complain shipments are often stuck twice as long in airport facilities geared to handle the smaller, steady stream of cargo from passenger flights, not the crush of volume from so many all-cargo planes.
“We feel the footprint that Pittsburgh offers is a significant advantage over a JFK or an O’Hare where the landside congestion presents challenges,” Schlossberg said. Pittsburgh, he added, is equivalent to Rickenbacker International Airport but on a smaller scale.
Rickenbacker is a cargo-only airport in Columbus, Ohio, that has seen freighter activity jump this year and is even handling cargo-only passenger aircraft.
“At some of the larger gateways, particularly during the pandemic when the airlines have reduced their ground handling staff, it can take as much as two to three days from the aircraft arrival until it’s put on a truck to the distribution center. Our hope is here, within 12 to 18 hours, cargo is on the road, going to the DC,” he elaborated in a video produced by the airport in conjunction with the inaugural Cathay flight.
Just getting off airport property to the forwarder’s local facility only takes a few hours, officials said.
And smaller airports work harder to make customers feel special.
“The community support in Pittsburgh has been outstanding,” Schlossberg said, “from the airport authority to customs border protection to the ground handling company to the truckers. It’s made a huge difference and was a major reason we went with Pittsburgh.”
Pittsburgh is a new destination for Cathay Pacific and Schlossberg expressed optimism that the experience will lead to more opportunities for the companies.
“What we are doing now is a proof of concept, showing the speed to distribution centers using an underutilized airport,” he said.
The U.S. Department of Transportation a year ago awarded PIT an $18.7 million grant to support the construction of a 75,000-square-foot cargo processing facility and an adjacent surface parking lot to expand air cargo operations. The Cargo 4 Project will allow for larger aircraft, new cargo destinations on all-cargo aircraft or additional parking for express carriers that require sorting facilities and high volumes of truck access. Airport officials say the current cargo capacity in the existing three buildings will be full very soon.
In June, officials at PIT and Ted Stevens Anchorage International Airport in Alaska agreed to work on joint marketing opportunities, exchange information about airport management and best practices for handling cargo, and explore passenger service from Asia.
Anchorage is one of the largest cargo airports in the world by volume, serving as a refueling stop for 28 widebody air cargo carriers, connecting Asia and the Americas. By gassing up in Anchorage, aircraft can carry more cargo on their trip. Anchorage officials say partnering with the right airports to provide seamless service can help attract airlines.
“Cargo has been an increasingly important aspect of our operations, including during the pandemic,” said Bryan Dietz, vice president of air service development at PIT, in a news release at the time. “It makes sense for us to partner with one of the busiest cargo airports in the world as we continue to sell Pittsburgh as a convenient – and speedy – cargo destination.”
Other tier-two U.S. airports besides Rickenbacker getting attention from shippers looking to diversify their supply chains, include Rockford, Illinois; Greenville-Spartanburg, South Carolina; Ontario and San Bernardino, California; and Austin, Texas.
Cargo helps Cathay Pacific during COVID
Cargo has been one of the few positive revenue streams for airlines, including Cathay, during the pandemic.
Cathay lost about $1.3 billion in the first half, but cargo yield improved 44%. Hong Kong has some of the most stringent coronavirus travel and health restrictions in the world, which has virtually cut passenger travel to the city. In August, Cathay Pacific and sister airline Cathay Dragon operated with only 1% of normal passenger capacity. For the first eight months of the year, the number of passengers carried was down 82%.
Cathay Pacific Cargo, which operates a fleet of 20 747 all-cargo planes, including 14 747-8 ultra long-haul airplanes, reconfigured the two 777 passenger aircraft to carry 12 extra tons in the cabin amid an airlift shortage for freight. It is in the process of changing out the seats of two more 777s idled by the coronavirus-induced downturn in travel, Fred Ruggiero, Cathay’s vice president of cargo for the Americas, confirmed.
The large freighter fleet hasn’t been able to make up for the loss of passenger capacity when it comes to cargo. The two airlines carried 102,122 tons of cargo and mail last month, a 36.7% decrease from August 2019, with freight-ton-kilometers down 30.3%. Load factors continued to increase, with Cathay planes 75% full. Year-to-date, tonnage and capacity are down a third and revenue-ton-kilometers are down a quarter. The airline said it operated more than 436 round-trip cargo-only passenger flights.
Cathay, which is undergoing a major restructuring to survive, said last week it is burning through $194 million to $258 million per month – an astounding amount compared to some major U.S. carriers that have taken their cash burn down from $100 million per month since March to under $25 million per month.