Eddie's Newest Business: His Pies In The Sky Cargo Village

In case you did not know it. YQG is a nothing airport compared with our major competitors. Here are the figures that demonstrate it. Windsor's cargo tonnage was inconsequential:

• "Existing data about freight tonnage and the number of passengers handled at YQG is very limited. It is estimated that 300 tons of cargo were handled in 2008."

Yet I am in support of the concept but for different reasons. How could I be otherwise. It's a fantastic idea. In fact, it is such a good idea that I argued for it back in 2005 by giving an example of how it was done in New Jersey.

The reasons why the concept makes sense have nothing to do with what Lufthansa says but it is to take advantage of an asset that we have never properly appreciated: the power of the Ambassador Bridge being the #1 border crossing in North America. We were too hung up on autos and casinos and now Eddie Francis visions for our prosperity.

Why oh why didn't Eddie follow my advice back then and partner with the only party in the area that has the capacity to do it better than anyone else: Matty Moroun.

Perhaps now people will understand why I have advocated for years for the need for a border solution involving the Bridge Company not opposing them:

• "[Deep Throat] had also said something about the Wall Street Journal. Quickly, I searched its pages and found a story about Northern New Jersey. The region's median income was $73,973, the highest of any state, home prices have increased, about double the national average, and the area's shopping malls are busy. It described "the solid if dull warehouse sector [as the] driver of the area's commercial real estate… Its central location on the eastern seaboard along with its excellent highway, air, rail and seaport access make it a hub of choice." Remarkably, our Development Commission said something similar about Windsor being a leading transportation hub and that we can reach 125 million people within one day’s drive. It also talked about the low cost of industrial real estate.
  
  Can you believe it! New Jersey! Becoming an economic powerhouse. Why couldn’t that happen to Windsor I thought. We can do all of what New Jersey did and more with our business leaders and talented workforce.
  
  Finally my source said cranes. I assumed he meant building derricks or ones that flew. Instead he meant Crains Detroit! There I read "Detroit development projects like an expanded Cobo Center or a bigger Motown museum could get the one thing they need to see the light of day — money. Amendments to the Port Authority Act passed by the state House two weeks ago aim to extend the Detroit/Wayne County Port Authority’s bonding authority well beyond marine applications… Port authorities in New York City and the Minnesota cities of St. Paul and Duluth also have used their bonding authority to spur regional economic development."
  
  It all came together. The Bridge Co. figured out how to make the Port work for the economic benefit of the Region (and for their pocket-book too no doubt). We could see more jobs, higher income, improved real estate prices, a bustling retail sector and so on. No wonder the Tunnel was not the story. No wonder Gord Henderson admitted: "I’m in awe of Moroun and his hired hands. These folks are the masters. They’re always two or three cunning moves ahead of the other players…"
  
  One last question I demanded. "Does Mayor Eddie have the guts to call the Bridge Co. to try and partner with them?" Upon hearing that, my source just smiled and departed."

I read the Lufthansa Consulting report. Before anyone gets too excited about YQG becomig a major international airport, it won't. Most of the business that a Cargo Village will have is truck-based! And what is the basis of Matty Moroun's business---trucking and distribution.

• "It is assumed that Road Feeder Services (RFS) and Charter Traffic create the majority of the cargo tonnage for YQG. The dominance of the forecasted cargo tonnage that is created by RFS reflects the role of Windsor as a transit location for cargo being unloaded from trucks crossing the border between the U.S. and Canada."
  

Let me give some highlights of the Report with my comments because most will not read it:

• "Air cargo can play a large role in developing an airport; in the case of Windsor International Airport (YQG), considerable quantities of air cargo are generated in its catchment area, mainly by the automotive and agricultural sectors. YQG furthermore is characterized by excellent accessibility and provides ample space for development and intermodal transshipments, but currently lacks state-of-the-art infrastructure and facilities to process and handle air cargo...
  
  The impact of perishable cargo on the study has been adapted within the running project. Initially it was planned to focus the study on perishable cargo. Following intense interview sessions with industry leaders from the greenhouse and farming industry Windsor International Airport and Lufthansa Consulting decided to give the study a broader scope and develop the air cargo market potential and forecast focusing on all cargo types (general as well as special cargo such as perishables). However the figures for Ontario’s perishable trade discussed in this chapter have been considered in the air cargo forecast." [Bye-bye Onion guys. The cargo village could never be sustained based on agricultural products. Is it any wonder they have disappeared?]


• "The planning and development of Windsor International Airport is influenced by the specific market environment – an environment being characterized by a high degree of uncertainties and ongoing developments. As a consequence a high degree of flexibility had to be integrated into all data evaluation and assessment phases." [In other words, who the heck knows what will happen so you cannot blame us if this is all wrong]


• "Motor vehicles and parts are the main products being exported by Ontario
  with 35.7%...
  
  Most imported parts are motor vehicles and parts (22.2%) with a value of
  CAD 72,366 m..
  
  The North American automotive industry, concentrated in Ontario and Michigan, ensures that there are a multitude of opportunities for cross-border investment, and a strong economic partnership between Canada and Michigan." [Does it make sense to build a huge distribution network based on an industry that may not grow as it has in the past or which will grow differently and which is centred away from here now anyway? Auto trade may grow but will it grow here as before. Again, the importance of building the Enhancement Project now is vital because Matty Moroun knows how to generate businesss for his crossing and to take it away from Sarnia/Port Huron as he has demonstrated! A Government bureaucrat would never know how to do it or care. But we must considering we lost a vital CN train tunnel to Sarnia before! Moreover, do not forget Highway H2O and his key investment in the Detroit Port.]



• "In the most likely scenario the impacts result in an average growth rate of 28.17% (for the forecast period 2009-2034) which is based on the fact that Windsor International Airport starts off the cargo business with a very low volume. It is expected that the total cargo tonnage at Windsor International Airport will grow from 161 tons in 2009 to 79,708 tons in 2034." [There are all kinds of nice charts and figures telling us how business will skyrocket upwards between now and 25 year from now. Sounds like the DRIC projections doesn't it!

• "To a large degree, air cargo traffic relies on scheduled, frequent passenger services inhub-and-spoke as well as in point-to-point traffic. YQG is presently suffering from a lack of scheduled uplift capacity. The volume currently transported is almost entirely based on the occasional charter flight. As a result, YQG is not being recognized as a cargo airport by either forwarders or shippers. Field research has shown that shippers would be inclined to ship through YQG if cargo capacity were provided on a regular basis. The demand for cargo capacity by local and regional shippers adds to the attraction of YQG for cargo and passenger airlines. However, the growth of the air cargo business at YQG is likely to be initially based on Cargo Charters and truck-based services for transit shipments. Onward transportation by truck may occur on road feeder service or flying trucks, in which a truck substitutes a flight." [In other words, a distribution business based on trucking. "A Road Feeder Service (RFS) is a truck which substitutes a flight. This transportation mode is especially popular in Europe, where the RFS is organized by an airline, while the operation is done by forwarding or trucking companies. The RFS operates under a real flight number, is defined by origin and destination and certain “on” and “off-block” times. Even the Airway Bills (AWB) show the “truck flight number” and the exact origin and destination.
  
  Surprise, surprise...Lufthansa Cargo is the market-leader in Europe in this type of service. We are paying Lufthansa to decide if they want to take over the business. Take a look at this for their road feeder service in Norht america as an example
  http://www.lufthansa-cargo.info/us-defeeding/pdf/RoadFeederUS_North_Canada_2008.pdf
  
  eg Over 500,000 tons of freight are transported by road each year by Lufthansa Cargo. Consignments that are fitted with a flight number, such as air cargo, flow to and fro between the big German distribution centres in Frankfurt, Leipzig and Munich and approximately 80 other European airports. Even distant transport routes, such as those to Helsinki and Madrid, are served by trucks.]
  


• "YQG is presently handicapped in its cargo development as it lacks specific cargo handling and storage facilities. The ability to handle cargo is rudimentary and not in line with international handling practices. The establishment of a modern, efficient Air Cargo Terminal to accommodate general and special cargo (e.g. perishables, valuable cargo) with supporting facilities and distribution centers (e.g. for forwarders and logistical service providers) would be a major step for YQG towards becoming a full-service airport. It would also improve the competitive position of YQG and be a prerequisite in attracting cargo business to YQG. Further, the establishment of an integrated Pre-Clearance Facility for cargo intending to cross the Canadian-US border will serve to significantly increase the air cargo opportunities. [OUCH! Taxpayers, get ready for Eddie to tell you how much WE have to pay to do this. If pre-clearance is important, then the whole concept may be dead based on the US Homeland Security Secretary's recent letter effectively killing "shared border management!"]

Here is what Council needs to look at right now, which they won't since they will rubber-stamp this to go forward. They would not dare vote NO to kill another Eddie pre-election vision and be accused of killing our future right before the election now would they.

Heck, it is the canal deal all over again. Who cares what Councillors think or care. You remember "Eddie's arrogance knows no bounds:"

• "With other regional airports -- notably London and Hamilton -- actively pursuing the same business, Mayor Eddie Francis said he wants Windsor to move fast on the next phase, developing an actual business plan with an outline of what facilities are required. Not wanting to wait, Francis said the local development commission has submitted a grant request to the province to fund the next phase, expected to cost as much or more as the $220,000 the city paid for the feasibility study."

And for sure, no one dare suggest calling Matty to get his opinion, his assistance, his support or even his money to help move this forward logically. Instead, Eddie needs to find an alternative player whom City taxpayers can finance:

• "Given that the consultants are connected to one of the global air cargo leaders, Francis was asked whether they too would be approached as a potential Windsor client. The mayor replied yes, adding that prior to their involvement in this study, the consultants "didn't know that Windsor existed, let alone its potential."

Don't you get it? "Windsor client" gave it away. It is another business for Eddie to run rather than be Mayor and fix roads, sidewalks and sewers! it is so much more fun. No wonder he will want a third term.

Watch your wallet....we are going to pay and pay and pay. No point complaining, no one on Council now will listen. Maybe that is why we better hope we can get new people with some sense elected.

• "6.1.1 Development of Air Cargo Related Facilities
  YQG is presently handicapped in its cargo development as it lacks specific cargo handling and storage facilities. The ability to handle cargo is rudimentary and not in line with international handling practices. The establishment of a modern, efficient Air Cargo Terminal to accommodate general and special cargo (e.g. perishables, valuable cargo) with supporting facilities (e.g. for forwarders and logistical service providers) would be a major step for YQG towards becoming a full-service airport. It would also boost the competitive position of YQG and be a prerequisite in attracting cargo business to YQG. [In other words, we taxpayers, not private industry pay out first for facilitites and hope someone comes. How many new passenger airlines have we seen with the upgrade to YQG so far. If it is such a great opportunity, let private investors do it.]
  


• 6.1.2 Distribution Centers
  Traditional and recent distribution centers (e.g. e-commerce fulfillment) rely on fast, safe and efficient logistical solutions. While trucking plays an important role for short and medium distances, only the employment of (all cargo) aircraft will make meeting delivery times possible over long distances. Therefore the settlement of distribution centers (on or off-airport) is likely to generate air cargo for YQG (one way or to/from YQG).
  


• 6.1.3 Airline Marketing / Air Service Development
  YQG is presently suffering from a lack of uplift capacity. The volume currently transported is almost entirely based on the occasional charter flight. Due to the lack of scheduled uplift capacity, YQG is not being recognized as a cargo airport by either forwarders or shippers. Field research has shown that shippers would be inclined to ship through YQG if cargo capacity were provided on a regular basis. The demand for cargo capacity by local and regional shippers adds to the attraction of YQG as airlines are increasingly interested in the revenues from transporting cargo. [In other words, we pay for it all first!]


• 6.1.4 Pre-Clearance Facility
  Being able to pre-clear US-bound cargo at a facility at YQG would eliminate the need to undergo time-consuming checks and inspections at the Canada-US border crossings. It would make YQG interesting as a port of entry for US-bound goods, whether they reach YQG by truck or air. Onward transportation by truck may occur on RFS or Flying Trucks. Similar to the RFS transports, the “Flying Trucks” are mainly used in Canada and the US. These trucks feed the cargo into the large airport gateways, e.g. in the US, for onward long-distance transportation but are not operated under a flight number. However the units are built up completely on aircraft pallets (or containers) and all paperwork is also finished at the origin station or forwarder warehouse. Windsor would be an ideal location as it is bypassed by significant truck traffic. [The Americans have said pre-clearance is dead]
  


• 6.1.5 Stimulus Packages and Local Business Development
  In line with other industrialized countries, Canada has passed an economic stimulus package to give a jumpstart to the contracting economy. In 2009, the plan (CAD 40 bn over 5 years) is expected to raise the GDP by 1.4%. Similarly, the USA has passed a stimulus package of far greater magnitude. On the state and regional level, various programs exist to facilitate and attract business development (e.g. Funding Programs for the Manufacturing Sector). Potentially, companies thus attracted to set up shop in the vicinity of the airport may generate air cargo. ["Potentially" and "may" as the basis of spending taxpayer money!]