Alaskans seek rule change for foreign cargo carriers

Posted: Tuesday, January 22, 2002

FAIRBANKS (AP) -- U.S. Sen. Ted Stevens last year unsuccessfully sought to allow foreign air cargo planes landing in Alaska to move their foreign goods to other aircraft and air carriers bound for U.S. destinations.

Such transfers are currently banned, under some interpretations of federal law, but a review is coming this year.

Stevens, at the behest of state officials, put the exemption in the Senate version of the annual spending bill for the U.S. Department of Transportation.

The Senate approved the bill Aug. 1 but the idea was shot down in a conference committee that merged the House and Senate versions in late November.

Instead, the conference committee asked the Bush administration to report back on the whole international cargo picture by March 1.

Stevens last month said he wanted to allow foreign carriers to transfer cargo in Alaska to improve efficiency and thus make Alaska airports more attractive to international flights.

Morton Plumb Jr., director of the Ted Stevens Anchorage International Airport, said Alaska needs the exemption to maintain its competitive edge in the international air cargo business.

With the opening of polar air routes and the advent of longer-range jets in the past decade, ''We have sort of lost our market share, so to make up for that, we are requesting this relief,'' Plumb said.

The U.S. refusal to allow foreign carriers to switch cargo to other countries' aircraft reduces the efficiency of airport operations, Plumb said. Foreign carriers landing in Anchorage or Fairbanks cannot distribute their goods to other planes, even if it makes the most economic sense, he said.

''We compete with Vancouver, Khabarovsk, Tashkent, Toronto. They don't have these restrictions,'' he said. ''If this activity can take place at some place else, then they will do it.''

The restrictions have their roots in a long-standing policy prohibiting ''cabotage,'' a naval term for a foreign ship transporting goods from one domestic port to another.

Plumb said the Alaska exemption does not violate cabotage.

''In this case, the goods are not originating at a U.S. port; they're originating at foreign ports,'' he said.

Plumb said a foreign airline already can transfer goods in Anchorage to another airline from the same country, under current federal policy.

''If an airliner such as Korean Airlines wants to transfer cargo to another aircraft under the same flag, it can do that,'' Plumb said. ''All we're asking is that Korean Airlines could go ahead and put that on Singapore Airlines.''

Plumb said some in the business thought Congress had already allowed such transfers a few years ago, but Transportation Department officials indicated they was not sure.

Some domestic cargo carriers could lose business if the Alaska exemption is allowed, Plumb acknowledged. However, they could also gain if they linked up with the foreign carriers, he said. Anchorage lands more international air cargo than any other airport in the country.

Dave Carlstrom, airport marketing manager for the Fairbanks Economic Development Corp., said the changes likely would benefit Anchorage far more than Fairbanks.

Fairbanks, with about 30 international cargo landings a week, probably does not operate on a big enough scale to encourage transfers. Anchorage has about 500 landings a week, he said.

Despite Stevens' efforts, the Alaska exception failed to find support among a majority of conference committee members.

Instead, the conference committee asked the Bush administration for a quick study of the situation.

''This report should include specific reference to air transportation issues in Alaska and other similarly situated airports in the United States,'' the committee said.

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