Transport: First Class for Freight

Once little more than an industry sideline, air freight is coming in for VIP lounge-style treatment of its own. United Air Lines opened a highly auto mated, $2,000,000 freight terminal two weeks ago in San Francisco. Eastern Air Lines is building something to match it in Atlanta. Using show biz, Pan American has run a TV ad in which a Caribbean calypso band rides pushbutton-directed pallets for a merry swing through the company’s gleaming new $8,500,000 computerized terminal.

From Bras to Tractors. Air cargo is indeed swinging. Outstripping the phenomenal growth in passenger business, cargo ton mileage has quadrupled since 1956, last year accounted for 12% of the airline industry’s $4.9 billion total revenues. The Civil Aeronautics Board predicts that freight traffic will continue to rise by from 20% to 25% a year as against about 13% for passenger traffic.

Even that estimate may be too conservative. For the first ten months of 1966, American’s freight business, which features the company’s “Astroloader,” increased 40% over the same period last year. Despite this summer’s 43-day machinists’ strike, United’s traffic is up by 41% . Pan Am, the leading cargo carrier, expects to beat its own 1965 record by 30% this year.

Much of the thrust has come from the airlines’ aggressive selling of what Delta Executive Vice President Thomas Miller calls “the total-distribution-by-air concept.” Because of cheaper insurance, lighter crating, fewer warehouse charges and, most important, jet-quick delivery, air freight is often less costly than water, rail or road transport-even though air rates are considerably higher. Using air shipment for most of its electronics products, increasingly diversified Raytheon has cut delivery time from ten to twelve days to 48 to 72 hours—and therefore is selling off its field warehouses in the bargain. Sears now supplies its Honolulu store with everything from brassieres to tractors via United jets. Shipping auto parts by air, General Motors and Ford cut down on expensive but wasted inventory in the production pipeline.

To the Back Seat. Though more than half the cargo is still carried in the cavernous underbellies of such planes as the Boeing 707 and the Douglas DC-8 on regular passenger flights, airlines are rapidly building fleets of all-cargo aircraft. By the end of 1968, the number of cargo jets in service will have tripled to about 165, worth $1.2 billion in all. When the next generation of cargo planes begin arriving in 1970—including the Boeing 747, which will haul 2½ times the 45-ton capacity of the 707 freighter—passenger operations may well take the back seat. “Within eight years,” says American’s Chairman C. R. Smith, “our freight volume will exceed our passenger traffic.”