Thunder Road to Dulles?

UPS_truck

by Reed Fawell III

Virginia’s Secretary of Transportation recently assured the public that the air cargo hub planned for Washington Dulles International Airport would generate only light freight traffic in small trucks rather than long-haul tractor-trailer rigs typically found on Interstate highways. That surely must have been news to Dulles Airport CEO Jack Potter and Washington Airports’ Task Force President Leo Schefer. Recall their comments to the South Dulles Alliance as mentioned our article, “A Mortgage on NoVa’s Future“:

One of the big impediments when it comes to development [of Dulles air cargo hub] is our ability to attract outbound cargo,” said Mr Potter. “Part of the problem is there is not an efficient road infrastructure … Yes, you can go around 95 and drive around the Beltway, but when you stop as a business owner looking at the hours you spend to do that, it’s a lot easier to take 81 … down to Atlanta or up … to Kennedy … than it is to come in here because of the road infrastructure.

At the same event, Schefer drilled into the nub of Potter’s dilemma: “Freight companies trying to get to Dulles lose a half million hours per year in traffic at a single intersection, the juncture of Interstate 66 and Route 28.”

This exchange highlights the obvious. A high volume of fully loaded tractor-trailers with quick and reliable access to long-haul truck routes is the lifeblood of any air-cargo hub. To become a dominant east coast air cargo operation, Dulles requires easy access to Interstate 81, Interstate 66, Interstate 95, and U.S. 29. Given the horrendous traffic delays now encountered around Dulles, it is easier at present for shippers to route cargo from New York City’s JFK Airport to Atlanta via I-81.

Why are tractor-trailer rigs needed to get the job done? The answer is basic economics. If UPS, to pick an example, hauled 45,000 pounds of air fright from Dulles to Atlanta in local delivery trucks, it would have to pay seven drivers to drive seven delivery trucks a total of 3,850 miles. By comparison, one driver in a tractor-trailer could take the same load 550 miles to Atlanta for a fraction of the cost and time. That’s why UPS consolidates as much cargo into a single load on a single truck going to a single location, or a tightly clustered group of locations, as possible. That’s also why 20% of UPS’ more than 100,000 trucks are fully loaded long-haul tractor trailers.

UPS goes to great length to insure that all these big rigs are run with maximum efficiency and productivity. Accordingly, if UPS accepted Dulles’ invitation to move its primary East Coast air cargo hub from Philadelphia, the logistics giant would redeploy its network of secondary hubs. These distribution centers would collect and consolidate cargo from outlying regions and then load it all into 52-foot tractor-trailers bound for Dulles. At Dulles, UPS would sort up to 77,000 packages an hour driven in from these outlying regions, as it consolidated the cargo again into packages for flights to Europe, Africa or the Mideast. The tractor-trailers would be reloaded with newly arrived air cargo for delivery up to 400 miles away. In the game of logistics, unloading, reloading, and turnaround must be quick and efficient. At Dulles, UPS’s goal would be to get its rigs back on the road again, fully loaded and rolling down the highways, delivering more freight to new destinations.

In short, basic economics insures that a busy air cargo hub at Dulles would keep Northern Virginia highways clogged with tractor-trailers.  

17 Responses to Thunder Road to Dulles?

  1. My old law school torts professor, who later was an FCC commissioner and then taught at UVA used to say, “Every tub must stand on its own bottom.” It sure Jack Potter never took a class from him.

    Jack Potter has a cost problem – his operating costs are too high. And a revenue problem — his revenues are too low. As my late father-in-law used to say, “Sometimes a feller just needs to sit down and fix his problem.” Potter needs to cut costs and attract more passengers. Having a low-fare airline take over some United gates might be a good idea.

    But Potter doesn’t want his tub sitting on its own bottom and he doesn’t want to fix his problem. He wants taxpayers to build a road so that he can undercut Philadelphia.

  2. TMT -
    That’s one sharp down home law professor and FCC commissioner you had. Where’s all that old time no nonsense talent gone too? Where, you wonder?

    • PS – Best I can tell, Jack Potter is a very capable and highly responsible CEO. Unfortunately he inherited a mess. None of it was his own doing. Now he is diligently going about trying to sort it out and set things straight. And, best I can tell, the Airports Authority is lucky to have him.

  3. the only folks I’ll believe on this are the folks who are currently in the air cargo business.

    I don’t believe the proponents any more than I’d believe T’il Hazel on a highway project

    and

    I don’t believe the opponents any more than I’d believe the Sierra cub on a highway project.

    my suspects are that air cargo companies have a good idea of their needs and it probably don’t look nothing like the proponents and opponents arguments look like.

  4. Well, Larry, since the government of the State of Virginia proposes to spend a billion plus of your money on demonstratively false claims maybe its in your interests to look into the matter yourself and satisfy yourself on the subject.

  5. There are several problems with this analysis.

    First, have you ever been to JFK? I flew into and out of JFK many times when I was working in Manhattan. The traffic to and from that airport is horrible. While trucks may sit in traffic at Rt 66 and Rt 28 they also sit in traffic all over Long Island too.

    Second, you don’t take air cargo off planes and put it immediately onto tractor trailers bound for Atlanta. You ship it to warehouses, offload, repackage and then ship to various destinations. Nobody would use seven little trucks to take stuff from Dulles to Atlanta. They might use seven little trucks to ship the stuff to warehouses in Haymarket or a distribution center on Rt 81 and then load tractor trailers bound for Atlanta. Rt 81 is studded with distribution centers while there are no air freight hubs for miles … http://www.publicopiniononline.com/interstate81/ci_17123234.

    Third, JFK had the following total aircraft movements:

    2007 – 443,754
    2008 – 438,391
    2009 – 415,286
    2010 – 396,912
    2011 – 409,363

    In 2004, Newark had 437K aircraft movements, in 2011 – 409K.

    In 2004, LaGuardia had 400K airceaft movements, in 2011 – 366K

    Fourth, Dulles is not a large passenger airport. It ranks at #22. However, that is because nearby Reagan Airport ranks at #26. If the two are combined, they would rank at #7 – just below JFK.

    Fifth, Jack Potter is not the CEO of Dulles Airport. He is the CEO of the MWAA and, as such, is responsible for the movement of more air passengers than all but 6 other airports. While Dulles Airport saw passenger growth shrink from 2010 – 2011, Reagan had substantial growth outpacing 39 of America’s other 50 busiest airports. In aggregate, the two airports grew by about 2% in passenger volume – placing them in the middle of the pack of America’s busiest 50 airports.

    Sixth, air cargo and passenger cargo are birds of very different feathers. The busiest US airports for air cargo are Memphis, Anchorage, Louisville, Miami, Los Angeles. None are on the east coast.

    Seventh, Louisville should be a case study for Virginia. It’s the third busiest air cargo airport in the US but not on the top 50 in passenger transport. UPS drove its growth. However, once it became an air cargo hub companies like Ford started building distribution centers and assembly plants in the Louisville area. Between 2000 and 2010 Louisville’s population grew by a whopping 133%.

    There is no reason that Dulles can’t be a substantial air cargo hub if Virginia’s incompetent approach to road financing (i.e. – inflation doesn’t exist) hadn’t been the policy of the Imperial Clown Show in Richmond for the last 26 years.

    • Don –

      Much of what you say is factually accurate, but is shallow and superficial and/or misses the entire point of the article and/or is otherwise irrelevant. Nor does any of it contradict my article. Nor does any of it educate me on anything I did not know. You are missing the point.

      The point is the claims and intentions of the state and earlier claims made by other proponents behind this billion dollar plus road decision and how it is now being sold to the public, as opposed to the factual basis on which that decision has already been or will be made, and its likely consequences.

      Such as the results that will likely ensue for Northern Virginia and its region should the proponents get the roads they now want to build, including how that relates to the roads they and every one really need in order to make anything work in Northern Virginia, as opposed to more of what the region suffers from now. Once that truth is dragged out into the open, then a fair debate on the merits can by had. We all might be surprised by the result of a fair honest debate if all facts are put out on the table. That debate, one based on the record and the facts, must be had. People are entitled to it.

      • A fair debate is warranted. However, it must be fair in both directions. For example, your characterization of how freight would be shipped by truck from Dulles to Atlanta is inaccurate. Nobody would use seven small trucks instead of one large truck. The answer might be seven small trucks to a warehouse near the airport and then a tractor trailer but nobody would send seven trucks to Atlanta.

        TMT forgets that Potter is the CEO of MWAA – which includes Dulles and Reagan. While Dulles may be under-performing recently, Reagan is over-performing.

        First things first – we need to get an unbiased view of reality on the table. Only then can we decide if this is a good idea or a bad idea.

        • Don –

          The article was intended to support your contention that sending seven trucks to Atlanta was ridiculous. And thus counter Virginia’s Sec. of Transportation implication that such was the case. It also raised the example of Atlanta JFK given Jack Potters statement of the problem from Dulles Airports perspective. (His observation was rhetorical. JFK is losing cargo market share because their locals are protesting and limiting big rig access to JFK. This imposes additional close in local hub costs due to forced interim local shipments for consolation before long distant hauls. And Dulles is said to sees this growing weakness at JFK as an opening to compete with JFK)

          And the UPS was used in the article given Dulles invitation to UPS last year. Of course USP tractor trailers would not in fact do runs between Atlanta and Dulles at all. UPS long distance trucks typically operate within a 40o mile radius, operating along the lines of spokes into to a major regional hub. (As opposed to its world wide Louisville operation) Should UPS’s Philly operation move to Dulles then Dulles would become the hub of those spoke radiating out in all directions from up to 400 miles away. Of course UPS has the second largest freight air fleet in the world. (might be #1 after recent merger). Thus it would fly into Dulles stuff from outside the 4oo mile radius, and fly out air regional hub arrivals as well. But obviously very few shippers operate freight aircraft as well as trucks. These many smaller operators who are big in their own right would truck from far longer distances (up to 1000 miles) if Dulles ambitions are realized. That is Dulles claim anyway.

          And of course too all cargo hubs are traffic breeders by their very nature. Big rigs are far more efficient that local deliveries of fragmented loads to local homes and businesses, and the resultant build up of industrial zones near air cargo hubs compounds traffic. All of this is fine in the right places and UPS as one example is of course a world class company, and highly responsible, and its work is critical to prosperity, as you know. But there is rising trend of opinion that air cargo hubs are not suitable to urban locales. That such locales are not workable for the cargo operators or for the local neighborhoods, or indeed for passenger airports. The needs of all these stakeholders are quite different and too often conflict.

          Thus opinions are rising that independent stand alone air cargo hubs located in especially chosen locales with nearby rail, port relationships, and excellent interstate roads networks are the wave of future. Louisville and Memphis as you point out are excellent models, even now for the regional hubs. That seems to be were this is headed.

          Regarding Potter as CEO of Airports Authority, you are of course right. However, Potter and Virginia have a problem. Congress makes all big decision re Reagan, not the airport authority. Hence solutions to Dulles problems are not so easily solved. Congress keeps lowering barriers to Reagan access. That is one of Dulles problems.

        • Even though Regan is working quite well, Potter still needs to address his specific problem at Dulles – costs are very high and demand is not high enough. He also has much of Dulles capacity used by a single higher-price carrier — United.

          There is a big need for more east-west capacity on roads in the Loudoun, Prince William, Fairfax area and much less on a north-south basis. Common sense, economics and traffic studies point one in the direction of spending money on east-west capacity, not helping Potter manage his operating cost problems at Dulles or helping land speculators develop their holdings.

          At every public meeting where this road/corridor has been discussed, there has been strong and vocal opposition. People want their money spent on projects that reduce congestion and improve safety and they don’t view this proposal as meeting those criteria. There is also strong bipartisan opposition to this proposal from legislators from both parties.

          • reed fawell III

            I tend to agree. There are many reasons why that states vision of the north south corridor is in my view fatally flawed.

            One obstacle to clarity of issues in such matters is the modern version of the traffic study. Unfortunately far too often those who commission and pay for the traffic studies have very specific objectives in mind and a lot of money riding on the traffic conclusions. Should the study not reach a conclusion that endorses those objectives the traffic consultant may well find himself out of job.

            Its the old story that the bearer of bad but vitally important news is the devil incarnate of those who get the message so then remove the problem by shooting the messenger who’s guilty of bearing the truth. I fear this may be the reason Mr. Allen did not finish Phase 11 and 111 of his very fine and prescient 2005 Dulles study. Indeed its by far the best study I have ever reviewed.

            I often find that traffic studies nowadays seem more designed to cloud the facts, obfuscate problems and overwhelm the reader with mind numbing worthless details that are piled on top of equally erroneous assumptions typically ginned up to reach precooked results, all expressed in indecipherable jargon.

            For example, in my view, if anyone concludes anything concerning traffic on this north south corridor highway 30 years out without giving a detailed and forthright description and analysis within the traffic study of the land use plans and ambitions in and around Dulles Airport 30 years out, that traffic study has no reliability whatever.

            All the more ridiculous is when such studies dealing with such complexities and unknowns project shortened travel times over given distances narrowed down to minutes 30 years hence.

          • A lot of money is being out into Dulles Airport. It is being extensively renovated, new paring has been built, Metro will go to Dulles. I think it’s quite reasonable to ask how to get the best return on that investment. Increased air freight is one idea. I am sure there are more ideas.

            East – West is worse than North – South congestion primarily because Rt 28 was intelligently built and expanded. However, the GW Parkway and I-95 both grind to a halt with North – South traffic every day as does Rt 1.

            Of course there is local opposition. There is local opposition to every road project and every development plan.

    • I have the same issues that DJ does.

      the idea of offloading air cargo in NY to see via truck to Atlanta is so laughable as to be… well.. heck laughable..

      and then it just gets worse…

      I keep asking – what is the current level of truck traffic in our region – compared to what air cargo would add?

      right now the narrative is that air cargo would add “a LOT” and it would overload our roads and I ask – compared to what?

      Has anyone ever been to NY, or Baltimore or Atlanta or Memphis – or even if you have not been there – have you got some definitive data to prove or disprove the “air cargo will destroy our road network”.. blather..?

      this is just another flavor of NIMBY.. IMHO>

      traffic is bad EVERYWHERE there is a METRO in the US.

      it’s not like there are METROs that are far, far better in congestion…

      they are all bad and the difference between them are in the “noise” level.

      air cargo is an economic plus -… there is no question about that.

      will it add some trucks? probably …

      but consider this – air cargo is moving cargo that is higher collar and can “spoil”….

      where does the NoVa area get it’s fresh fish and other “air cargo” right now?

      does anyone really thing that right now NoVa does not receive air cargo service?

      I believe that NoVa already is receiving air cargo service… already has trucks with air cargo on them, delivering it to NoVa businesses.

      does anyone thing that NoVa does not have existing air cargo service?

  6. I think (not thing) I need to slow down and proofread a bit before I post given the steady stream of syntax errors I’be making.

    I’m not a defender or supporter of “air cargo” by the way.

    I think VDOT is likely promoting a false narrative … saying whatever they think might “stick” in justifying their road.

    On the other hand, I don’t think the opponents are covered in “virtue” either.

    here’s what I think. I think if you went to the areas that have significant air cargo and suggested that they crap up their area roads more than they deliver net economic value that they’d think you were a LOON.

    but make a suggestion here that air cargo would be a worthwhile economic additive to the region – and out of the woodwork come the “don’t screw up our road system” folks…

    economic activity, especially the non-govt kind is good. jobs are good. more products delivered is good.

    it’s pretty bad – when we get to the point where people want to drive their cars solo so bad that they resent economic benefits from trucks.

    don’t get me wrong. I cannot stand those big rigs either … but they’re sorta like toilets … especially those in in fast food establishment – just god awful ugly -.. but you gotta have them!

  7. I’d like to hear someone explain the value to the residents of NoVA of spending their now higher taxes on this road, which MWAA, et al. claim is critical to a vibrant airfreight business at Dulles, which, in turn, will generate some more jobs and taxes. Last February, I listened to Leo Schefer talk about this phenomenon, but only in generalities. I’ve been around long enough to know that someone speaking in generalities is looking for the public to donate some of their wealth so that the speaker gets something. Other people’s money is too easy to spend.

    Delegate Jim LeMunyon is seeking to force NVTA to show the ROI for all of these types of projects and is being resisted. That tells me a lot.

    • TMT – Complicated question. I’ll try to address as this best I can when my time allows, if others don’t. Meanwhile it obvious that airports are highly valuable things. The difficulties has to do with where, when, and how, and attendant risks, costs, and rewards versus alternatives like Richmond airport.

    • Of course there should be an ROI. And LeMunyon is a big enough wheel to demand one. He ought to raise hell in the General Assembly, with the CTB and in the media if need be.

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