Report Highlights Total Value of Air Cargo

A report analyzing the recent and future trends in the air cargo industry was recently released by the Hawaiʻi Department of Business, Economic Development and Tourism (DBEDT).

Air cargo. PC: DBEDT.

The report highlights major changes in the air cargo industry in the past 15 years, which shows that inbound air cargo volume from the U.S. mainland jumped in 2002 due to e-commerce and has been at that high level ever since.

The volume of airmail from the U.S. mainland dropped significantly at about the same time. More air cargo carriers have entered the market and carry majority of the air cargo volumes rather than using the belly of passenger planes.

“We are happy to see that the volume of interisland air cargo and mail has increased and remained elevated during the past 15 years,” said DBEDT Director Luis P. Salaveria. “We hope the data and analysis will help the transportation industry and policymakers.”

“Air cargo plays an important role in Hawaiʻi’s economy by transporting merchandise to and from Hawaii quickly and in its original quality,” said Chief State Economist Dr. Eugene Tian. “This report is not a study of the economic impact of the air cargo industry; it describes the changes in this industry between 1990 and 2016 and the driving forces for the changes.

Some of the interesting facts in this report include:

• The air cargo industry in Hawaiʻi had 852 employees in 2016, experiencing 978.5% growth in employment between 2001 and 2016. The weighted average hourly wage for cargo workers was $37.47 per hour, higher than the state average hourly pay rate of $23.76 in 2016.
• The top commodities shipped to Hawaiʻi by air included electronics, precision instruments, miscellaneous manufactured products, machinery, motorized vehicles, transport equipment, textiles, pharmaceuticals and meat/seafood.
• The top commodities shipped out of Hawaiʻi by air included agricultural products, chemical products, machinery, miscellaneous manufactured products, transport equipment, pharmaceuticals, foodstuffs, and precision instruments.
• In 2002, air cargo destined for Hawaiʻi from out-of-state locations increased by 55% over the previous year and since then, inbound cargo overtook outbound cargo. One of the primary drivers for the large increase in the inbound air-cargo was e-commerce.
• From 1990 to 2016, total inbound air cargo and mail increased by 2.72% per year on average. The increase in inter-island air cargo and mail shipments was even more pronounced, increasing by about 4.86% per year on average. In contrast, during the same period, outbound tonnage increased by a mere 0.59% per year on average.
• Hawaiʻi’s inbound air cargo from international destinations increased on average at about 2% per year, and air cargo from Hawaiʻi to international destinations increased by about 1% per year. However, domestic inbound air cargo, increased by just under 9% per year since 2000. This is a sharp contrast to outbound cargo for mainland destinations, which increased at an average of 1.4% per year during the same period. However, the volume for domestic outbound air cargo are larger than those for international inbound and outbound.
• It is also notable that international air mail bound for Hawaiʻi dropped from just more than 2,000 tons in 1990 to about 177 tons in 2012; reaching a low level, and then recovering somewhat during the period between 2012 and 2016.
• In the 1990s, a majority of air cargo was shipped in the belly of passenger planes. Today, more freight is being shipped by cargo-only carriers such as Atlas Air, UPS, FedEx, Kalitta Air, Asia Pacific, ABX Air, along with Aloha Air Cargo, and Rhoades Aviation (Transair and Transair Express), with the latter two being more active in the interisland air cargo transportation.
• The top international destination airport for Hawaiʻi’s air cargo was Sydney, Australia, followed by Auckland, Hong Kong, Tokyo (Narita) and Vancouver. It is important to note that, according to Qantas Airlines, very little air cargo actually originates in Hawaiʻi. Therefore, Honolulu airport acts as an air cargo hub for the goods being trans-shipped from the mainland to Australia and other locations in the Pacific.
• Four out of the top five international airports for Hawaiʻi-bound air cargo were Japanese airports: Tokyo (Narita), Tokyo (Haneda), Kansai and Nagoya. Seoul-Incheon in Korea is in the fourth place, and the only non-Japanese airport.
• A majority of Hawaiʻi’s domestic outbound air cargo goes to California airports. The only non-California airport in the top five domestic destinations was Dallas/Fort Worth, Texas.
• The inter-island air cargo market is largely served by two Hawaiʻi-based airlines: Aloha Air Cargo and Transair (Rhoades Aviation). FedEx, the top airline for both Hawaiʻi inbound and outbound air cargo, is a relatively small player in the inter-island air cargo market, accounting for under 3% of the market.
• The top 5 airlines for both Hawaiʻi inbound and outbound air cargo markets are, along with FedEx and UPS, Kalitta Air, Atlas Air and Hawaiian Airlines.
• While air cargo accounts for about 8% of Hawaiʻi’s total inbound cargo weight and about 18% of all outbound cargo weight, it comprises approximately 21% of the total value of cargo shipped for both inbound and outbound (including air and ocean). Interisland air cargo shipments account for less than ¼ of a percent, but about 12% in value of the total cargo shipped within Hawaiʻi.
• According to Boeing, world air cargo traffic will grow 4.2% per year, more than doubling in its size over the next 20 years. Air freight, including express traffic, will average 4.3% annual growth. Airmail traffic will grow more slowly, averaging 1.7% annual growth through 2035.

The full report is available here.