China takes one step closer to cargo hub here

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China takes one step closer to cargo hub here
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CHINA EASTERN AIRLINES

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Who is China Eastern?

The airline Lambert officials will be negotiating with is an emerging player in the air freight industry. China Eastern is one of the country's three major state-controlled carriers, and its freight arm — China Cargo Airlines — is currently buying three smaller freight airlines, which will give them a fleet of 21 cargo jets, including six brand new Boeing 777s.

"They're in the process of becoming a big player in freighter airlines," said David Harris, editor of Cargo Facts, a freight industry trade publication in Seattle.

The region's bid to become an international cargo hub cleared a pivotal hurdle Wednesday as Chinese authorities designated an airline to negotiate with Lambert-St. Louis International Airport.

At a meeting in Beijing, Chinese aviation authorities instructed the freight arm of China Eastern to seek a final deal — long in the making — for regularly scheduled cargo service here. The announcement gives the clearest signal yet that Chinese-flagged cargo jets may soon start touching down at Lambert.

"This is the news we've been waiting for," said airport director Rhonda Hamm-Niebruegge.

Business and civic leaders believe talks will progress quickly from here. A team from China Eastern plans to come to Lambert in mid-February. And the Civil Aviation Administration of China set a goal of starting Boeing 747 flights between Lambert and Shanghai's Pudong International Airport in the first half of 2011, according to a briefing on the meeting received by Mike Jones, chairman of the Midwest China Hub Commission.

"This has been a long process," he said. "We anticipate it will be relatively short negotiations."

But the real goal — building Lambert into an international freight hub and attracting industry around it — is a decidedly long-term play. A few flights a week are just a start, Jones said.

The broader success of the hub will likely depend largely on a group of essential but low-profile companies in the shipping industry: freight forwarders.

Often described as "travel agents for cargo," freight forwarders book space on planes for companies needing to ship materials. More than manufacturers or airlines, they decide what products move where, and how things get from Point A to Point B.

Right now, they mostly move international freight through a handful of gateway airports — such as Chicago, Los Angeles and Miami — that have sophisticated ground facilities and lots of flight options. Convincing them to come to a new market like St. Louis could be a challenge, said David Harris, editor of Cargo Facts, a freight industry trade publication in Seattle.

"Airlines don't really pick destinations in freight. They fly where their customers want them to go, and their customers are mostly freight forwarders," he said. "'Build it and they will come' has been the downfall of endless cargo projects."

St. Louis officials say they are well aware of the need to woo freight forwarders and point to the region's strong network of roads and rails, along with its lower costs and congestion relative to cargo hubs like Chicago and Dallas, as key advantages.

"It's not like we're starting from scratch," said Richard Fleming, president of the St. Louis Regional Chamber and Growth Association. "We've got the infrastructure."

Demonstrating the case with an actual cargo carrier will help, said Hamm-Niebruegge. If a few flights a week can work, more will likely follow.

"We'll start small," she said. "The forwarding will come if the product is superior."

Of course, they need the flights first.

It remains unclear what sort of facilities or incentives the Chinese might request. Lambert has relatively little in the way of advanced cargo facilities right now, though the airport has a contract with a development firm to upgrade some hangars north of the runway. Nor is it clear exactly how many flights might come or precisely what they would carry. Those issues will be hammered out in the coming months.

None of those complications hampered the cheering at Wednesday's good news. Statements hailing the deal came in from Sens. Claire McCaskill and Roy Blunt. Mayor Francis Slay called it a "very positive sign." And Jones, who has been the point man on the project for two years, allowed himself a brief moment of celebration before turning back to the big picture.

"We're all very happy we got to this point," he said. "But this is just the preseason. The real work starts now."

Copyright 2012 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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