Wednesday, April 25, 2018
Business

Sparked by Amazon, cargo business growing at Tampa International Airport

Tampa International Airport's cargo business is growing, thanks in large part to the online retailer, Amazon.

Seattle-based Amazon has opened two enormous distribution centers in the greater Tampa Bay area. To supply those warehouses with merchandise, Amazon is shipping goods to Tampa International Airport daily aboard a Boeing 767 cargo freighter plane.

It's a lucrative arrangement for Tampa's airport, which has seen a spike of more than 20 percent in cargo activity over the last year. The Amazon deal alone has generated more than $275,500 in revenue for the airport through fees and building rental payments, which continues to go up.

The daily flight is part of a national deal that Amazon quietly inked with Air Transport Services Group in 2015 to lease five Boeing 767 cargo planes and use them to move merchandise across the country. Tampa was one of the first regions to be a part of Amazon's air cargo delivery network. Amazon and ATSG renewed the contract last year and extended the lease to 20 cargo planes.

Business is going well enough that LGSTX Services Inc., a firm under the same parent company as Air Transport Services, wants to lease additional warehouse space from the Tampa airport.

Previous Coverage: Tampa International Airport's cargo operations busy keeping Amazon's Florida warehouses stocked

Hillsborough County Aviation Authority board members approved a proposal Thursday for LGSTX Services to take over the lease of a 7,680-square-foot cargo building from United Airlines to use for storage and the creation of pallets for packing and shipping. The lease, which extends to September 2018 and includes renewal options, will generate more than $91,000 in rent and fees annually.

In addition, board members agreed to change the language of the airport's air service incentive program to accommodate more domestic cargo freight business. The incentive program has been used mostly to lure new commercial airliners and flights to Tampa Bay, like the direct flight to Frankfurt, Germany, on Lufthansa and to Panama City, Panama on Copa Airlines. The airport waives fees and has written checks for marketing reimbursements through the program.

For cargo flights, the incentive program only allowed international carriers to participate. That changed Thursday when board members voted to revise the language to include incentives for all cargo air service.

"When we created the policy in 2011, we thought the only growth in cargo business we'd see would be from international carriers," said Chris Minner, vice president of marketing at the airport. "But that's not the case, so we'd like the program to be open to any freighter."

Other cargo companies like Atlas Air Inc., FedEx and the U.S. Postal Service are among the other cargo businesses at the airport.

Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.

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