12 minute read
TRANSPORTATION
Getting Creative with Cargo Alaska’s transportation companies keep the cargo coming
By Julie Stricker
For several days last spring, Anchorage Ted Stevens International Airport was the busiest airport in the world.
Those days are outliers, a result of global shutdowns related to the COVID-19 pandemic, but they are an indication of the importance of cargo transportation in Alaska, according to Jim Szczesniak, airport manager.
“We are currently ranked number six in the world for cargo operations,” Szczesniak said in October. About 2.8 million tons of cargo passes through the airport each year. This year, the coronavirus pandemic increased that number, he says.
For the second quarter in 2020, cargo was up 14.5 percent, or about 900 tons. In addition, Anchorage now serves more daily destinations using wide-body freighters than before the pandemic—about thirty-one markets, up from about twenty-one or twentytwo, Szczesniak says. The airport itself is responsible for one in ten jobs in the Anchorage area, with a $1.8 billion economic impact annually. In total it provides roughly 22,000 jobs throughout Alaska.
Szczesniak says the airport is looking to keep that growth going and has several projects coming online in the next two to three years. Those projects, as well as fleet upgrades and new technology for air, land, and sea shippers, are key to keeping the state's bustling cargo operations healthy and growing.
Air Cargo
Anchorage’s location is crucial, as are the economics of cargo. Anchorage is roughly the same distance from New York City as it is from Tokyo, which puts the airport within a 9.5-hour flight from 90 percent of the industrialized world.
Passenger planes and cargo planes are essentially the same, Szczesniak says, but cargo weighs more.
“What they’ll do is they will fill the plane to its maximum capacity with cargo, and that only allows them to fill the tanks about halfway with fuel,” he says. “So they’ll fly in from Asia to Anchorage, refuel, and from there they’ll take it to North America, or vice versa. It allows them to maximize their revenue per flight by stopping here in Anchorage.”
Most planes just refuel and continue to their destination, but because of legislation by former Alaska Senator Ted Stevens, the airport is exempt from Jones Act cargo transfer restrictions. That means a foreignbased plane and an Americanbased plane can meet on the ramp in Anchorage and transfer cargo to increase efficiencies.
To date, almost all cargo that comes through Alaska originates from Outside, but a proposed $200 million, 700,000-square-foot cold storage facility may change that.
The Alaska Energy Authority is overseeing the project, which started off with a $21 million grant issued through the Better Utilizing Investment to Leverage Development (BUILD) fund. When it’s completed in two to three years, it will benefit two of Alaska’s rare exports, Szczesniak says.
“It’ll be very helpful to the seafood industry and also potentially for peonies,” Szczesniak says. “It would give the seafood industry the ability to better store stuff here that’s processed up here so they can distribute it to Asia.”
It also would help offset a general trade imbalance in air cargo. When planes pass through from Asia to North America, they’re typically full, he says. But on the return trip, those planes are usually only about half-full.
“So we’ll have that ability to expand or better serve markets in Asia from the Alaska seafood perspective because we can get stuff there a lot quicker,” Szczesniak says. “That works for the peony flowers too because they have to be refrigerated before being distributed. The storage facility also has potential for us to do a little more in the pharmaceutical distribution chain because pharmaceuticals are very temperature sensitive. So having a facility like that helps with all three of those segments.”
A more immediate benefit for Alaskans is fresher produce.
“We have a lot of aircraft that come from Latin America and the California area that go through Anchorage on their way to Asia,” he says. “So, when they started building this thing, I told the people who were involved that I’d really love it if my raspberries lasted more than a day. There’s tons of “We’ll have that ability to expand or better serve markets in Asia from the Alaska seafood perspective because we can get stuff there a lot quicker… That works for the peony flowers too because they have to be refrigerated before being distributed. The storage facility also has potential for us to do a little more in pharmaceutical distribution chain because pharmaceuticals are very temperature sensitive. So having a facility like that helps with all three of those segments.”
The Leavitt/Aveogan is named for Oliver Leavitt, one of the original members of Arctic Slope Regional Corporation’s board of directors; the tug portion of the ATB is called the Aveogan, which is Leavitt's Iñupiat name.
Crowley
perishables on airplanes going to Asia, so with this facility, it might give us a better opportunity to take some of the perishables off the plane and bring them to the Alaska market.”
The airport has also negotiated a lease with 6A Aviation, which is planning to build a 500,000-square-foot cargo transfer facility and a 300,000-squarefoot air cargo warehouse. Both FedEx and UPS are also planning major expansions, Szczesniak says.
“In total, those projects are going to be in the neighborhood of over $700 million,” he says. “And that’s all private investment.”
Szczesniak says the Anchorage airport has also recently partnered with Pittsburgh International Airport to help maximize its cargo hub and spoke.
“We’re looking for new markets,” he says. “The Pittsburgh airport has great facilities, convenient to the Northeast, the Southeast, and Midwest. So we’re going to be working with the Pittsburgh airport to try and grow that market.” 64 | December 2020 On the Ground
Things have been a bit quieter on the ground, as far as Alaska cargo goes. One big change involves the consumer shift to online shopping.
FedEx and UPS both have full sorting facilities at the airport, and DHL is another prominent cargo shipper with facilities in Anchorage, Szczesniak says.
“UPS and FedEx will come out of multiple markets in Asia, arrive in Anchorage and take all the stuff out of the plane, put it in their sort matrix, and then they have the ability after that to take a couple of airplanes that are going to the Memphis or Louisville area, a couple going to the California area, a couple to the East Coast, a couple to the Midwest, so they can more efficiently distribute their goods through their networks without flying everything to Memphis or Louisville.”
Amazon also uses the Anchorage airport, and the online retail behemoth recently added a second flight.
“What we’re seeing is just from an e-commerce perspective,” Szczesniak says. “It was growing at an exponential rate prior to COVID, and it’s just continuing to accelerate.”
Package tracking technology also has advanced in the past few years.
Consumer online shopping has been at holiday season levels this year, according to Joe Michel, executive director of the Alaska Trucking Association.
Except for oil and gas, which come in through the ports of Whittier and Seward, the majority of consumer goods enter the state through the Port of Alaska, Michel says. And while there has been a drop in freight overall because of a slowdown on North Slope projects, shipments of consumer goods, such as food, have remained steady. There has been a downturn in durable goods, such as kitchen appliances, because many manufacturers slowed production due to COVID-19. But demand remains strong.
“They’re moving freight at a holiday pace,” Michel says. “There’s
Joe Michel, Executive Director Alaska Trucking Association
a major uptick in deliveries to their door. The changes are all in that last mile of delivery.
“Most of that technology has been driven by online companies that ship using FedEx or UPS,” Michel says. “Cargo is received off the plane or received off the ship and they’ve contracted out a lot of independent contractors, who are working with FedEx or UPS, [who are out] delivering packages to your door.”
On the Water
For most of the state, the only way to deliver goods is by air or water. For bulk cargo, such as fuel, water is by far the most efficient means and companies such as Crowley have decades of experience doing so.
In September, Crowley delivered 4 million gallons of fuel to Eareckson Air Station on Shemya, located at the western edge of the Aleutian Islands.
It was a challenging delivery, made more difficult after a North Pacific storm destroyed the island’s dock earlier in the summer, according to Rick Meidel, vice president and general manager of Crowley Fuels.
“They had built a new dock and a new dock face and the storm literally dismantled it,” he says. “We had to make sure we had a safe landing area and could tie off safely.”
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ordinance from World War II, he says. Getting in and out is dependent on the weather, and the Aleutians are subject to frequent storms, high winds, and waves. “It’s got to be one of the most austere weather environments you could ever experience.”
Since dropping anchor wasn’t a viable option, Crowley’s Alaska fuel division and its government solutions division teamed up, and Crowley used its ocean-going tug, Sea Prince, and a 52,000 barrel barge to get the fuel to the remote island. Once there, crews had to lighter the fuel from an articulated tug-barge (ATB) the company contracted to move it to shore and finally to the air station’s storage tanks.
Crowley has delivered fuel to this remote outpost since 1956. Eareckson is home to a radar installation and aircraft refueling station and is staffed by 180 service members, contractors, and civilians who rely on Crowley’s twice-yearly fuel deliveries. And while the 2020 delivery was challenging, but successful, Crowley has some new innovations coming in 2021 that will make its operations more efficient, according to Meidel.
Its new 55,000-barrel ATB Aurora/ Qamun is designed for the challenging conditions found throughout western Alaska and the Arctic. The ATB is 66 | December 2020 designed specifically to improve efficiency, maneuverability, and operational capability in the region.
It’s the second ATB Crowley commissioned in 2020 meant to operate solely in the Alaska market. In April, Crowley dedicated a 100,000-barrel ATB named Oliver Leavitt, in honor of Arctic Slope Regional Corporation’s former chairman. The tug is named Aveogan, Leavitt’s Iñupiat name. Crowley will operate the 483-foot ATB for Alaskabased Petro Star Inc., a wholly owned subsidiary of ASRC, under a longterm charter.
Jensen Maritime, Crowley Shipping’s Seattle-based naval architecture and marine engineering subsidiary, designed Aveogan/ Oliver Leavitt to meet ice class and polar code requirements, including increased structural framing and shell plating and extended zero discharge endurance, according to a news release. The double-hull vessel is designed to increase cargo capacity with minimal draft.
One of the advantages of using an ATB is the flexibility of the unit, Meidel says. “Because they operate together, we can operate in more inclement weather and in higher waves,” he says. “It turns easier, it maneuvers easier.”
Aerial view of the Leavitt/Aveogan, a 100,000 barrel articulated tug-barge (ATB), at Bollinger Shipyards in early 2020.
Crowley
In an ATB, the vessels are linked as one unit via a pin and groove system instead of a tow line, Meidel says.
It’s a welcome change, says Crowley’s Cargo Operations Manager Anthony Morris.
“The crew of the ATB will be able to go into the harbor, turn, look at the weather, and decide whether they can actually make it to the dock and exit without having to get alongside,” Morris says. “It gives us a bigger window of opportunity, improves our operational efficiency, and, most importantly, further improves upon the already safe methods developed by Crowley.”
It’s the next step for the company as it updates its fleet of seven tugs and ten barges that operate in western and northern Alaska. Crowley’s “mosquito fleet” serves 288 communities, many of which are only reachable by small vessels. Crowley also upgraded its dock in Kotzebue this year, a $5.3 million project that extended the dock by 30 feet and added additional weight capacity.
“We’re a critical part of the community and we’d like to be an integral part of the community as well,” says Meidel. “More than a third of our workforce is Native Alaskans. They know well the challenges of their communities and they know how best we need to serve them.”
Anthony Morris, Cargo Operations Manager, Crowley
On time and on budget.
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