Philadelphia International Airport (PHL) has announced a “big strategic plan” to expand cargo services. That’s according to The Philadelphia Inquirer.
It’s an attempt, over the next five to 10 years, “to capture a bigger piece of the market for shipping goods like pharmaceuticals, e-commerce orders and perishable products,” the newspaper says.
“There are no other airports on the East Coast that offer a greenfield site where you are starting from scratch, and where, depending on the types of facilities that you build, it can match the business model of a lot of different types of companies,” said Stephanie Wear, PHL’s director of air service development and cargo services.
A PHL official predicts its plan to develop more than a million square feet of cargo facilities will create 28,000 jobs over a decade. Another official claims the expansion will lead to at least $1 billion in annual economic impact for the Greater Philadelphia region.
Such figures always should be taken with a large grain of salt given the inflated “multiplier” methodology typically associated with such pronouncements.
The Inquirer says Philadelphia International “started taking steps to strengthen is cargo capabilities several years ago.”
“A 2017 study the airport commissioned showed that the catchment area around PHL — a 400-mile radius — generated $53 billion a year in air cargo activity but that PHL grabbed only 9 percent of it. The pandemic, which depressed passenger air travel, further illustrated the case for a new revenue stream,” The Inquirer reported.
Of course, even though PHL says it is seeking “private” partners to help build out its cargo capabilities –“It could be a carrier that decides to come in and establish a large, medium or small operation here” or “a developer that decides to come in and put up buildings” and lease them, an official said — tens of millions of dollars in public “investment” will be required.
Pittsburgh International Airport (PIT) has been touting its expanding cargo capabilities for the past few years, also heavily subsidized, and in the case of Qatar Cargo, quite dubiously.
But with Philadelphia talking about its efforts better situating PHL to capture business around a 400-mile radius of Philly, that means it and PIT, which is about 268 miles (233 nautical miles), will be competing — sometimes for the very same business.
And all with no small bolus of public dollars, in a variety of forms, to fuel a hardly free market-based “competition.” One can only cringe at what other public subsidies will be thrown at cargo carriers to choose PHL over PIT and vice-versa.
It’s a good bet that if such expanded air cargo facilities had to be paid for privately, one or the other (or, perhaps, even both?) would not be economically feasible.
But when public dollars – “free money” to proponents — underwrite such a large role in these “economic development” endeavors, overlapping, unnecessary and needlessly expensive operations result.
And that’s not sound public policy, no matter what its cheerleaders might claim.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
