Fruitful connections: How avocados can shape airport strategy

Think like a forwarder, not an airport

Located in the south-central section of the U.S., DFW has long had a dominant hold on air imports into Texas, with about 70 percent of the market, but exports are a different story. The airport has less than one-third of the total market for air exports of cargo originating within Texas, and a much smaller fraction for those originating in Latin America.

However, Ackerman said routing can be more flexible and that airfreight flows for exports originating in both Texas and Latin America will “begin to shift over to DFW if the airport identifies and builds relationships with forwarders and shippers,” and by focusing on trade lanes that are competitively priced. In addition, DFW will likely benefit as an indirect result of network expansion by American Airlines, and its oneworld partners. In June, for example, oneworld carrier Qantas launched new freighter services from Australia to DFW with a 747-400F.

In an effort to establish relationships with forwarders and shippers, the DFW team has participated in more industry events and has begun thinking more like a forwarder. The DFW team also meets with forwarders at conferences and joins their organizations, whenever possible, Ackerman said.

In early 2016, DFW commissioned a perishables market study that analyzed DFW’s competitiveness on 579 different import, export and transit trade lanes. Speaking of the results, Ackerman said that, on 183 of these lanes, “DFW showed a clear competitive advantage through the combination of low total landed cost, availability of lift, and transit time, when compared to other major U.S. gateways.”

Beyond DFW’s continued role as a gateway for Asian imports to the Central U.S., most of the trade lanes identified in the study, he added, fall within one of these specific spheres of advantage:

• Imports from South America, particularly perishables imports from Chile and Brazil, to the Central U.S. region;
• Exports from Mexico (hard freight and perishables) and the Central U.S. region (hard freight) to Asia;
• Exports of California-grown perishables to Western Europe; and
• Transit freight from Chile and Brazil destined for China, Taiwan, Japan and South Korea.

Industry expert, Neel J. Shaw, president of JS Aviation, and chief commercial officer at Able Freight, the second-largest perishables exporter out of Mexico agreed that DFW likely has growth opportunities when it comes to inbound perishables from South America. That is, “if they can convince importers and brokers that Dallas is better for their business” in terms of cost, and speed to market.

The robust analysis of this study proved that DFW’s hypothesis about the airport’s geographical position creates competitive Asia-Latin American advantages, Ackerman said. “With a greater understanding of DFW’s total landed cost advantages, the airport can start reaching out to forwarders and establish and grow business partnerships,” he said.

American Airlines recently invested in cold storage facilities that have already attracted forwarders wishing to route perishables through Dallas. “Being able to provide an expanded cooler network during those warm Texas months gives us peace of mind when we route via their [American Airlines’] Dallas hub,” said Chris Connell, president of Commodity Forwarders Inc. (CFI).

In addition to forwarder relationships, DFW also seeks to leverage its pre-eminent position on the Mexico-Asia freight market (via road feeder services) to extend further into South America. DFW has become the number-one destination for freight moving in bond from airports in Mexico to the U.S. for air export to Asia, which Ackerman believes “gives DFW a significant competitive advantage to expand the airport’s sphere of competitiveness southward into South America.”

Operators of said road feeder services tell Air Cargo World that they expect the continued expansion of cool-chain facilities at the DFW to drive more perishables through the hub. Shaw, on the other hand, added that while he was “not expecting a paradigm shift” because of the existing outbound capacity from Mexican gateways, he could see DFW as being “potentially decently positioned to handle some of Mexico’s growing perishables exports.”