Cargo Service Soars at Houston Airport

A new all-cargo air service between Houston and Asia looks like its off to a strong start, giving backers hopes this time it will fly.

The new service, kicked off several weeks ago by China Airlines, is another sign of Houston's increasing trade with the rapidly growing region.

Such services also are highly sought by airports that are competing head-to-head to gain access to new international markets.

The flights, serving Taipei, Taiwan and Houston, are twice weekly, with arrivals and departures on Thursdays and Saturdays.

China Airlines already is considering the possibility of increasing the number of flights into Houston, the carrier's president, Philip Wei, said recently.

"There are two flights a week, but we will look to increase the frequency as soon as possible," Wei said.

The petrochemical industry is a big user of the new service, the carrier said. Other industries ranging from medical to information technology to aerospace also are being targeted.

Houston-based EGL, a logistics provider, had been involved with China Airlines for more than a year working on this service, said Greg Weigel, EGL's executive vice president for operations.

"A lot of our key high-tech and oil and gas customers in the Houston area as well as San Antonio and Austin are all using this service," Weigel said.

China Airlines and EGL have had a longtime relationship. The carrier approached EGL about whether the local freight forwarder, which hires airlines to carry cargo around the world, could support the service by lining up cargos.

Similar effort in 2001

A previous attempt that was made in 2001 by China Airlines to establish an all-cargo service between Houston and Asia failed, Wei said.

The carrier already has passenger service in and out of Houston.

China Airlines is the only all-cargo carrier on this route.

Houston airport officials in recent years have been pushing international expansion, and the new service is a "significant event," said Rick Vacar, head of the Houston Airport System.

The amount of cargo being moved through George Bush Intercontinental Airport is up by 5.4 percent percent for the year through August, according to the most recent statistics available.

China Airlines has the world's largest fleet of Boeing 747-400s. In the U.S., the carrier has freight facilities in San Francisco and Los Angeles on the West Coast and New York City on the East Coast.

China Airlines flies to Taiwan, and from its home country it moves freight to China and other destinations in the region.

"The strength of China Airlines is their hub in Taipei," Weigel said.

"But they are flying freighters into all the majors, so it is not only Taiwan but Hong Kong, Bangkok, Singapore, Japan, all those areas."

The enormous U.S. trade deficit with China shows a big plus - this trade route is important - and a minus - more freight flows east than west.

The trade deficit with China set a record of $23 billion in September. It is running at an annual rate of $228 billion this year, on pace to surpass last year's $202 billion; that figure was an all-time high for any U.S. trading partner.

For the Houston connection, the carrier first flies from Japan to Nashville, where Dell Computer has a big presence. It then flies to Houston and then back to Taipei.

The cargo from Asia to Houston is composed mainly of computer products, carrier officials said.

The majority of the cargo from Houston actually is bound for Singapore and much of it is equipment for the energy business.

The cargo mix is the tricky part, EGL's Weigel noted.

"Filling the aircraft from Asia into Houston is the easy part," Weigel said. "There is a huge trade imbalance, so the real key is developing export cargoes from the Texas area back to Asia to make the route a financially viable option."

Houston is key because a large amount of oil- and gas-related cargo is going into Southeast Asia, he said.

Also, a lot of goods from northern Mexico that used to move through Dallas - automotive equipment such as engines, transmissions and heavy truck tires - now move through Houston, Weigel said.

"We are very pleased with the service and addition of the route coming in," he said. "We have got a strong revenue customer base both inbound and outbound and with our trucking network. We are able to utilize that to export goods from Mexico into Houston."

Cutting delivery time

Foxconn Communications & Network Solutions Business Group in Houston also makes use of the service, the company said.

Company officials say a major factor is reducing the amount of time for the delivery of products to the global marketplace.

Foxconn is the largest manufacturer of connectors for use in personal computers in Taiwan, according to the company, and one of the leading manufacturers of connectors and cable assemblies in the world.

Ted Jeude, director of operations for Foxconn, said the service is a big deal for Houston. Previously, shipments had to go through Dallas, taking additional time.

"If you can cut 24 hours and increase your service level, that is big in any business," Jeude said. "It is a big deal, and I am excited we have been able to do it."

BUSH INTERCONTINENTAL AIR FREIGHT

Air freight moving through Houston's biggest airport is growing this year, according to the Houston Airport System.

67.8 MILLION POUNDS of air freight was moved on all of the airlines in August 2006.

5.4% is the percentage change in air freight for all airlines from January to August 2006 compared with last year.

525 MILLION POUNDS of air freight has been moved on all of the airlines from January to August 2006.



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