Package Delivery and Air Freight and FedEx and Indianapolis International Airport and Shipping and Economic Recovery and Economy and Transportation, Distribution & Logistics and Distribution & Logistics

Airport cargo-traffic rise could be sign of improving economy

April 20, 2010

Air cargo activity at Indianapolis International Airport isn’t exactly among the nation’s leading economic indicators, but an uptick in March may be a notable sign of recovery.

Landed cargo weights rose 9.1 percent last month over March 2009, according to Marsha Stone, chief financial officer of the Indianapolis Airport Authority.

About 97 percent of the airport’s cargo is flown by FedEx, which operates its second-largest U.S. air hub in Indianapolis.

In this economy, a nearly double-digit jump in cargo is significant. Cargo landed weights during the previous month (February) were down 1.8 percent from the same month in 2009.

Stone said the increase is a positive sign that businesses may be shipping more goods to replenish lean inventories and also suggests that consumers may be ordering more goods from online retailers.

“This is a good sign … I do think the general thinking is retail is starting to come back,” said Cameron Carter, vice president of small business and economic development at the Indiana Chamber of Commerce.

But Carter said it’s unclear whether the uptick in retail is a sign that a sustained, broader economic recovery is around the corner.

He said a number of businesses are holding off from making capital investments and adding employees, citing concerns over how they’ll be hit by costs from the new federal health care program and from pending federal legislation involving cap-and-trade mandates and financial reform.

“I don’t sense a lot of long-term investment, and I do sense a lot of trepidation about what’s going on in Washington … It will put a fractional drag on the economy,” Carter added. “There are a lot of crosswinds.”

In 2009 overall, cargo moving through Indianapolis International was down about 11 percent from the previous year, while passenger traffic fell 8.4 percent, according to airport records.

FedEx is particularly important to Indianapolis International—generating about half of the total landing and apron fees the airport collects. FedEx’s contribution generally ranges between $10 million and $12 million a year.  

Memphis-based FedEx, which employs about 4,500 at the Indianapolis hub, reported a modest gain in daily package volume during its last quarter, saying the increase reflected “the benefits of improving global economic conditions.”

The second-largest cargo carrier at Indianapolis International, Cargolux Airlines International, boosted its tonnage in February by 26 percent over the previous month.

Cargolux flies between here and Europe Boeing 747's loaded with pharmaceuticals. Flights by the airline into Indianapolis appear not to have been substantially affected by the erupting volcano in Iceland that halted many trans-Atlantic passenger flights to the United States.

One Cargolux flight was delayed last Friday and is scheduled to arrive today, said Chris Matney, air service director for the airport authority.

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