Philadelphia Airport's ambitious plans to increase cargo revenue
Philadelphia International Airport is investing big to build cargo infrastructure for future to increase revenue from cargo operations considerably.
Philadelphia International Airport is located right in the middle of the US political capital Washington DC in the south and the financial capital New York in the north. This important airport in the east cost of the US did very little to develop cargo business initially and a lot of cargo business growth happened by accident.
"I think our cargo operation could have grown significantly beyond where it is today. But we just didn't have any facilities or any opportunities to expand our capacity," says Jim Tyrrell, Chief Revenue Officer, Philadelphia International Airport, in the latest episode of Logistics Tech Dialogues, presented by Kale Logistics Solutions.
Watch the full interview with Jim Tyrrell, Chief Revenue Officer, Philadelphia International Airport.
However, things began to change in the recent years. From 2019, the airport has handled over 600,000 tonnes of cargo annually. For the year 2021 the annual cargo throughput of the airport was 643,138 tonnes of cargo.
"So Philadelphia only receives about 5% of its total revenue from its cargo operations. And again, the only source of that revenue is from landing fees of those cargo aircraft. So if you think about it, we have about 30 dedicated cargo flights a day, while we have over 350 flights a day in total. So you know, 10% of activity and 5% of revenue coming from our cargo operation," says Tyrrell.
A 2017 study found that the airport captures only nine percent of a potential $53 billion air cargo opportunity passing through its catchment area.
Philadelphia International Airport wants to make a change. It aims to become a preferred air cargo hub in the east cost of the US. It has set short, mid and long term vision to create cargo facilities that attract shippers and forwarders.
"The big thing about diversification is most of our passenger activity takes place during the hours of like 6am to 8pm. Most of our cargo activity takes place outside of those hours. So we have this huge infrastructure that goes essentially unused during the rest of the day. If we can increase our cargo activity, especially that activity that will take place during the time that passenger airlines are not flying, it just goes to maximize the utilization of that wildly expensive infrastructure that remains unused during those evening hours. So it just makes sense for the airport to pursue that kind of activity," explains Tyrrell, who has been with the airport for over 35 years heading different departments.
The airport has a $1.2 billion cargo expansion programme announced in 2021. It is anchoring an air cargo community system to integrate various stakeholders at the airport using digital, easy to use and secure digital tools to transform cargo operations to meet the growing demands of customers and to match the expectations of the digital era or global trade and commerce.