America’s Dependence on Flight-by-Night Operators: The Underappreciated Role of Air Cargo in the U.S. Economy

by Jock O’Connell

Many years ago when I was growing up in Maine, it was alleged that some of the state’s more mischievous rustics would occasionally humor themselves at the expense of tourists. Thus, a wayward traveler befuddled by meandering back roads might be advised to “drive straight on until you come to where Tucker Drummond’s barn used to be.”

More famously, an unfortunate traveler asking the way from, say,Meddybemps to Millinocket, might simply be told that “you can’t get they-ah from hee-ah.”

If tourists are not likely to rejoice in the news that “there” is unreachable from “here,” imagine the exasperation of business people, civic leaders and economic development officials when that judgment is applied to their city or region.

For in today’s global economy – with its burgeoning overseas markets, far-flung supply chains, lean inventories and just-in-time delivery schedules – efficient and reliable transportation links to the rest of the world have become indispensable assets to any community aspiring to remain economically competitive.

Yet seldom has the nature of those links been less well understood or appreciated.

Consider recent developments in California, where Republican Governor Arnold Schwarzenegger and the state legislature’s Democratic leadership are seeking to negotiate a massive infrastructure bond measure that would, among other things, earmark over $20 billion to boost the carrying capacity of the state’s “global gateways,” the complex system of highways and railroads linking the ports of Los Angeles, Long Beach and Oakland with the rest of the country.

Last year, these three seaports handled more than 41 percent of all container traffic entering the U.S.With that volume of trade expected to double or even triple over the next twenty years, a huge investment in the state’s maritime-related infrastructure would seem to be a classic no-brainer.

But what about exports?

There is one small problem, however.While there is an unquestionable need to facilitate the flow of cargo through the state’s seaports, the goods movement strategy now being considered at the state capitol inexplicably ignores the mode of transport used to carry most of California $120 billion export trade.

For, surprising as it may seem, most of California’s merchandise exports go nowhere near any of the state’s huge seaports. Instead, like the vast majority of vacation travelers and businesspeople journeying abroad, they go by plane. In fact, more of California’s merchandise export trade moves by air than by sea and land combined.

That’s right. Last year, California’s airborne exports – flown either aboard air freighters or in the cargo holds of passenger aircraft – amounted to $62 billion, or 53 percent of the state’s entire $117 billion export trade. Another 26 percent went overland to Canada and Mexico. Barely one-fifth of the state’s exports passed through those seaports on which so much policymaker attention is being lavished.

And 2005 was no anomaly. Ever since reliable state-oforigin export statistics first became available nearly twenty years ago, trade analysts have known that the majority of California’s exports have been airborne.

In this respect, California is far from unique. According to the U.S. Census Bureau’s Foreign Trade Division, eleven additional states – Arizona, Colorado, Connecticut, Idaho, Massachusetts,Minnesota, New Hampshire, New Mexico, Nevada, New York and Utah – saw over half of their merchandise exports leave by plane in 2005. Nationally, fully 33 percent of America’s $893 billion merchandise export trade last year was transported by air, while ships carried away about 29 percent of our exports (view chart).

Yet for most Americans – including many policymakers – international trade is closely associated with the waterfront. While a misconception, it is perhaps an understandable one. After all, few newspaper articles or television news reports about foreign trade neglect to feature at least one iconic image of towering cranes lifting steel shipping containers off of behemoth ships. And while our popular culture is strewn with sea-faring tales and waterfront dramas, only one Hollywood film involving an air cargo flight – “Cast Away,” starring Tom Hanks – comes to mind

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