Five reasons why Anchorage is coming in from the cold as an e-commerce hub

Amazon’s recently-launched daily cargo flights to Anchorage have put the spotlight on this Alaskan air hub. No stranger to Alaskan skies, international freight forwarding and logistics company Panalpina often uses Anchorage for technical stops of its scheduled charter flights. This blog post uncovers Anchorage’s hidden advantages as an air freight and e-commerce hub.

End of June, Amazon Air, the domestic in-house carrier of e-commerce giant Amazon, launched daily cargo flights to and from Anchorage, Alaska. Business Insider commented that given this latest development, Amazon Air is quietly expanding towards Asia’s doorstep.

Panalpina, and its Charter Network in particular, is very familiar with Anchorage airport, often using it for technical stops for its many scheduled charter flights between Asia and North America. Ted Stevens Anchorage International Airport is already one of the world’s most important air freight hubs. A further boost could come from a unique mix of geographical and regulatory factors, investments and growing trade that is spurred by e-commerce and perishables.

Here are five reasons why the idea of Anchorage as a major e-commerce hub is not that far-fetched.

1. At the end of world, yet in the very middle

Situated at the top of the world and near equidistance between Europe, Asia, and North America, the Ted Stevens Anchorage International Airport is less than ten hours by air to 95 percent of major global markets.It is one of the busiest cargo hubs at a volume of roughly 2.8 million tons of freight per year. Anchorage currently ranks as the fifth largest cargo airport in the world (behind Hong Kong, Memphis, Shanghai and Incheon, Korea) and the second largest in the USA (behind Memphis). It handles more than 500 landings of wide-body cargo freighters each week. The Anchorage Economic Development Corporation estimates that the airport creates 10 percent of jobs in the city

2. The technical stop

Anchorage serves as the main link between cities in Asia and North America. About 80 percent of all cargo flights operating across the Pacific, including Panalpina’s transpacific scheduled charter flights, make a “technical stop” at Anchorage to refuel, change crews and, in some cases, to transfer cargo.

3. Maximizing payload-to-fuel ratio

These technical stops can bring considerable benefits. By making a fuel stop in Anchorage, airplanes are able to carry significantly more revenue-generating cargo and less fuel than they would have needed for a non-stop flight. Cargo carriers can thus maximize their payload-to-fuel ratio and operate more efficiently and profitably.

4. Cargo transfers

Anchorage enjoys great flexibility under liberalized cargo transfer rights granted by the U.S. Department of Transportation. It is privileged as one of the few airports in the world where foreign cargo can be transferred from one aircraft to another without being subject to customs and other trade regulations. This would be illegal at most airports, called “cabotage”. At Ted Stevens Anchorage International Airport however, cargo carriers can use the time on the ground spent refueling to also transfer cargo between their planes and those of other carriers.

These transfer rights include transfers from wide-body freighter aircraft to one or more smaller aircraft flying to potentially multiple destinations from Anchorage. This is particularly interesting, considering that most of the cargo headed to the Lower 48 (the contiguous continental states area of the USA, excluding Alaska and Hawaii) via Anchorage is destined for other major cargo hubs such as Chicago, New York City or Los Angeles.

Not many companies have jumped at this opportunity though, mostly because they are unaware or skeptical that they are actually allowed to carry out such cargo transfers. Anchorage airport authorities are now planning to construct a Quick Cargo Center warehouse facility that would further facilitate transfers. It would allow companies to temporarily store cargo in a secure, temperature-controlled environment in close proximity to aircraft parking positions before moving goods onto connecting flights without having to clear customs.

5. Infrastructure investments to match booming trade, especially in e-commerce

The airport is investing USD 85 million this year to support expansion. Scheduled construction projects include the North-South runway and a new airline gate.

Trade growth is an important driver. Alongside the traditional mainstay cargo going from Asian manufacturing centers to North America, e-commerce shipments and produce going from Latin America to Asia have increased. Furthermore, trade officials are keen to boost Anchorage’s ability to process Alaskan goods in order to meet the growing appetite for live king crab and salmon in the emerging markets.

It certainly looks like Advantage Anchorage for now – as air hubs around the world race for prime business in the e-commerce game and beyond.