Geography, infrastructure propel Atlanta cargo
Atlanta’s vast population is an advantage that Alan Schlesinger regularly cites — particularly when selecting freight forwarders with whom to do business. As the president and CEO of Duluth, Ga.-based Airflotek — a distributor of air filtration systems — Schlesinger says nearby Atlanta’s robust forwarding community helps keep prices low. “I have about four companies that I do business with, and I will shop them continuously,” he says. “These forwarders already know they can’t be over the top on price because they know that everyone is shopping the competition.”
Schlesinger says Airflotek’s proximity to Hartsfield-Jackson airport affords similar advantages. Since so many carriers fly to Atlanta, competition always exists — which, he says, ensures best pricing. “And I can always find room in a cargo hold, even if it’s at the last minute,” Schlesinger adds.
Steve Blane, district manager for Atlanta at Air-Sea Forwarders Inc., says the influx of capacity may not be a good thing, however. Pointing to the recent fluctuation of cargo activity out of Atlanta, Blane says traffic has been sluggish lately, albeit “with a few positive spikes.” In June, for instance, Hartsfield-Jackson’s cargo volumes fell 3.2 percent, year-over-year, to 54,755 tonnes — a drop in line with the declines the airport recorded in the first six months of 2012. Blane and other stakeholders are hopeful that traffic will turn around in the latter half of the year, but are realistic about the situation.
“Individual air shipments seem to be getting smaller — two to three skids or less,” Blane says, “but the shippers are still looking for deep discounts, like they would have received on shipments requiring containerization/palletization. He says the problem stems from three key issues: economic uncertainty, political unrest in certain regions and loss of volumes to seafreight. And, surprisingly, escalating airfreight costs isn’t the only factor driving the latter trend, Blane says. In fact, Georgia’s seafreight rates, such as those out of the Port of Savannah, have risen steadily since 2010.
“With the exception of very time-sensitive commodities, like perishables, seafreight has become a viable option,” Blane says. “Shippers, with few exceptions, are not as time-sensitive, and the service-quality gap between seafreight and airfreight seems to have narrowed. “Whether seafreight has improved and/or the airfreight performance has declined may just be a matter of perception and could be based on lower expectations for seafreight and continued higher expectations for air,” he continues. “That would be a great question for debate.”
Something that isn’t up for debate, however, is the importance of a bustling cargo market to a city’s health. Whether freight volumes come by air or sea, Blane says cities must have a transportation infrastructure that supports the flow of goods, instead of impedes it. He rates Atlanta’s cargo infrastructure — particularly Hartsfield-Jackson’s airfreight network and capabilities — as adequate. But Blane says it’s crucial that airport personnel keep an eye out for indications of stress to the infrastructure, whether due to increased age or demand, and take corrective actions before problems escalate.
Congestion is one possible problem, Vito Losurdo, vice president of global airfreight services at UPS, asserts. “Because Atlanta’s such a popular global and regional hub, it could, at times, result in traffic congestion, which could be a challenge for companies doing business in the area,” Losurdo says. “And it could potentially continue to be a problem with the lack of investment in our national highway system.”
Three major highways converge in Atlanta — I-20, I-75 and I-85 — and companies regularly truck freight to and from Hartsfield-Jackson to nearby Florida, North and South Carolina, Tennessee and Alabama, Losurdo explains. Without regular improvements to these roads, there could be kinks in the supply chain. Even so, he calls Atlanta’s transportation infrastructure “absolutely favorable” and reiterates the importance of Atlanta to UPS’ hub-and-spoke distribution network.