Isle farmers hope
air cargo takes off
More cargo space
By Rod Ohira
could help Hawaii increase
agricultural exports
Star-BulletinFred Spencer recently discovered a lei stand at Honolulu Airport selling fresh roses at a reasonable price. He was surprised to learn the flowers came from South America, not Hawaii.
"What it shows you is the world has gotten smaller and we have the ability to move perishable products anywhere," said Spencer, Pacific region marketing director of Commodity Forwarders Inc. and president of the Air Cargo Association of Hawaii.
But while jets transport tons of cargo in and out of the state daily, not much space is available to local farmers.
"Cargo traffic from Japan is high at this time of year, so local ag shippers can't get airlift out," said Brian Suzuki, president of Hawaii Air Cargo Inc.
Yu-Sen Hwang of Rainbow Hawaii Farms, for example, struggles to find cargo space nightly for 4,000 pounds of fresh herbs destined for next-day sale in 25 mainland cities.
"If I get rejected (at the airport) and the market guy doesn't get his herbs, he won't order from me the next time,"Hwang said. "If farmers can (form a co-op) to increase volume, we can get space and reduce cost."
For a state looking at diversified agriculture to replace sugar, increasing airlift is a priority item, says Airports Administrator Jerry Matsuda.
"Right now, aircraft are flying over us because there's no economic benefit for them to land in Hawaii," Matsuda said.
"Cargo is one of the key areas where we can increase our revenue and directly help the state's economy. If cargo is done right, our farming industry will grow."
Increasing airlift was among the issues discussed at a two-day cargo conference in September, hosted by airport officials at the Hawaiian Regent Hotel and attended by 202 people.
"It's an important first step in making Honolulu Airport a major full-service airport," Spencer said of the conference.
"The cargo potential is fantastic, but there has to be participation by all entities. And the state needs to look at its facilities."
To achieve its goals, Matsuda says the state has to:
"I have good feelings about this," Matsuda said. "It's going to take us three to five years to establish and we have $20 million to make improvements."Establish a foreign trade zone and create an in-transit authority at Honolulu Airport to attract more carriers and increase airlift.
The potential is so great that even Matson is looking at air cargo, Matsuda says.
"Matson is thinking about leasing aircraft on weekends to get cargo out because they realize people need to get products out faster," he added.
The focus on cargo is new to the state.
"Historically, all the focus has been on the passenger side and cargo secondary," Spencer said. "But tourism can't be the major player.
"With the diversification of the agriculture industry, the need for cargo space has increased. With the new narrow-body designs of airplanes, cargo space is limited, which is why Maui Pineapple Co. and others are hurting for airlift."
Suzuki estimates that Hawaii could double or triple exports with added airlift.
"Cargo space is vital for new state exports in diversified agriculture," he said. "The state could do a lot to entice more carriers to fly to Honolulu and Hilo."
One way is to establish a foreign trade zone at Honolulu Airport, says Matsuda.
The zone would enable foreign manufacturers and shippers to avoid lengthy and expensive customs inspections and duties on goods re-exported for consumption outside the United States.
"Many companies say a foreign trade zone saves them 10 to 14 percent," Matsuda said. "That's their profit margin, and it's a big thing for foreign companies."
Doing it would not be difficult, he said. "We can just piggyback the current foreign trade zone at Pier 9 and establish it at Honolulu Airport," Matsuda said. "It's not a problem."
Creating an in-transit authority like the one in Anchorage, Alaska, would be an additional boost, Matsuda noted.
That would allow foreign carriers to break up freight and transfer cargo tax-free from one airline to another at the airport for shipment to other places.
"The in-transit authority is something we're going to work on with Sen. (Daniel) Inouye," Matsuda said. "The state can make money from landing fees, and carriers will provide jobs here."
Matsuda says several companies are already interested in building cargo-transfer facilities at Honolulu Airport, similar to the new $8 million United Airlines warehouse that opened in August.
"We have space, but many airlines don't have the capital," Matsuda said. "But there are people with capital willing to make a long-term investment.
"They would design and build facilities according to our specs and then lease the property out. Our revenue will be from land rent."
Matsuda says he recently received approval from the Federal Aviation Administration to market the state airport system like Miami, Fla., did.
"Miami International Airport was a small, passenger-related airport until eight to 10 years ago when they decided not to focus only on air travel," Matsuda said.
"What the Miami Airport Authority did was hold a cargo conference, bringing industry people together. Through that program, American Airlines has developed a solid foothold in the cargo link between Europe, the East Coast and Central and South America."
To move forward, the state needs to compile a database.
"From the conference, we learned that we don't have good data for cargo movement and we need the database because airlines like to see projections," Matsuda said. "Establishing a means of gathering data, putting it on a standard format for computers and having a summary statement from producers, freight forwarders and the airlines is one of the key action items we have on the agenda for the next conference."
Cargo facts
