Will air cargo take flight at Lambert?
This article first appeared in the St. Louis Beacon: June 16, 2008 - A tentative agreement announced Monday marks a step toward making Lambert St. Louis International Airport a cargo hub for Air China, China's state-owned carrier. Political and business leaders hope it will eventually result in a big economic boost for the region.
As a first stage of making the tentative agreement final, feasibility studies will be conducted to decide what needs to be done at and around the airport.
As local leaders discuss moving Chinese air cargo through St. Louis' airport, they must decide how to make an airport known for passenger service attractive for a different kind of service.
Lambert currently has no large air freight coming through. The airport handles passengers and parcel service, spokesman Jeff Lea said, but it wants to diversify. Because passenger traffic is down from Lambert's historic highs, the airport has room to spare for a new freight logistics center. More important, it has plenty of runway room, Lea said.
Sales contracts signed
Jokes about the Beijing Olympics and flying steaks capped off a day spent increasing Chinese and American trade Monday. A Chinese vice premier, Wang Quishan, visited a city he hopes will serve as his country's economic gateway to the Midwest.
Missouri leaders are hoping that products like beef and machinery can make their way east as Chinese goods flow through the city west.
With plans to make St. Louis a hub for Chinese air cargo and signatures drying on contracts worth more than $5 billion, Wang and Missouri officials and business leaders had plenty of reason to smile.
"I am the Midwest's No. 1 salesman," Wang (left) said through an interpreter. "It is time we turned our attention to St. Louis, to the state of Missouri, to use this base to expand our openness to the Midwest."
Prior to Monday's conference, the Chinese delegation met with local business leaders and saw the sites.
Wang attended the Missouri Conference on Investment Climate at the Ritz-Carlton in Clayton along with such Missouri political leaders as Sens. Christopher "Kit" Bond and Claire McCaskill. St. Louis is Wang's only stop in the U.S. outside of Washington D.C.
The announcement of a tentative agreement to make Lambert an Air China hub created a din of applause. Officials say the deal stems from visits by Missouri officials to China earlier this year.
China is one of the state's largest trading partners. It is the fastest growing market for Show-Me state goods, doubling the amount it imported between 2005 ($521 million) and 2007 ($1.015 billion).
St. Louis' airport is also attractive to Chinese cargo planes because of its long, underused runways and open space. The airport's land buyouts give it the space for a new distribution center. And the airport is only operating at 30 percent of its capacity, Richard Fleming, head of the Regional Commerce and Growth Association, said.
"It's like the field of dreams," Bond said. "We built it and now we're waiting, hoping it will come." The city also has a strong geographic location, infrastructure and is home to a number of international headquarters such as Emerson.
Christopher Chung, president and chief executive of the Missouri Partnership, said Missouri was attractive to China because it is made up of everything the United States is.
"Missouri has a little bit of everything," Chung said.
Missouri leaders, meanwhile, want to tap into the 20 to 30 planes of cargo flying from China to the U.S. daily. That number is expected to triple or quadruple in coming decades, Stephen Perry, a managing director with the 48 Group Club and a consultant working on the process, said. St. Louis wants a piece of the action.
St. Louis companies were busy making hay, signing 32 contracts and agreements worth $5.32 billion. American soybean farmers and exporters won the most Monday, gaining a $3 billion commitment from China. Solutia sold its resin to three Chinese companies for $182 million.
Officials from the Chinese government and Air China were meeting with Lambert to discuss the hub.
Wang spoke about the need for open trade between the U.S. and his country. He said that the United States should look to St. Louis.
"I think the U.S., like the Arch of St. Louis, should [be] like a frame without a door," Wang said. "That is to say, it should remain open."
"Lambert's strength in the past was certainly its passenger traffic," Lea said. "It's just really a sign of the times that airports have to look beyond just air service."
China represents a way to increase business at Lambert while encouraging other growth in the region. China is one of Missouri's largest trading partners. The state's exports to China -- ore, foodstuffs, industrial products, iron and steel -- doubled between 2005 when sales totaled $521 million and 2007 when they topped $1 billion, according to the World Trade Center St. Louis "WiserTrade" report. China is the fastest growing market for Missouri goods.
This is important, civic leaders noted, because for the cargo plan to be practical the planes need to return as full as they arrived. So, strong exports from this region are a vital part of the equation.
Other regional air cargo hubs say getting business isn't easy. Lambert has to start from scratch. Airports, such as those in Columbus, Ohio, have been luckier. They've been competing for the sought-after traffic longer and have facilities in place to handle it.
Another local airport has pursued air freight deals with mixed results. MidAmerica Airport built a 500,000 square foot warehouse to house cargo, but it has been essentially vacant for three years.
However, MidAmerica recently made some promising strides. The St. Clair County Board approved, on June 11, a lease with Teqflor, a Florida-based cargo company that ships flowers, among other items. It will occupy 35,000 square feet of the warehouse space.
Columbus, Ohio, began its push into the cargo arena in the 1980s. Of that city's three airports, one, Rickenbacker International Airport, is wholly devoted to cargo operations. The former World War II field saw 100,000 tons of cargo go in and out in 2007.
Rickenbacker possesses the long runways and space needed to house the freight, communications manager Angie Tabor said. The areas around the airport have been developed to complement the support structures, such as warehouses and distribution centers that store and organize freight shipments. Columbus' location and trucking industry have also helped the airport compete.
Tabor said St. Louis may already have some of the tools it needs for a freight deal in its own backyard.
"One word of advice to St. Louis might be to look at the businesses you have in your community and see what international relations you have," Tabor said.
As the home of companies like Monsanto, Emerson and Anheuser-Busch, St. Louis can tap into their Asian interests.
St. Louis' location, like Columbus' could be both a blessing and a curse if the airport is to become a player in the air freight business. It is centrally located, with numerous highways, rail lines and river access for companies interested in shipping freight.
However, traditional "gateway" ports like Chicago are nearby. Tabor said that convincing businesses to move that have invested in support structures and communities near airports such as Chicago can be tricky, particularly with international prospects.
"You have to bring out the map and say, 'There's Ohio'," Tabor said of Columbus' efforts. "It's an extremely tough, competitive market."
Studies are underway to find out what might make the deal possible. Local, state and business leaders gathered with the vice premier of China, Wang Qishan, and other Chinese leaders for the "Missouri Conference on Investment Climate" in Clayton Monday. Along with the signing of 32 contracts and agreements, officials talked up Missouri as a destination for Chinese business.
"Missouri has just a little bit of everything," Christopher Chung, president and chief executive of the Missouri Partnership told those at the conference. "Missouri really does represent the best characteristics of every region of the country."
Amelia Flood, St. Louis, is a free-lance writer.