KMOX saying no announcement until after next week's visit by the Premier. But Mike Jones says it's going to be a very positive announcement.
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Sounds like St. Louis pretty much has this thing "wrapped like a mummy."
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One would hope! The coming weeks have the potential to be endlessly exciting.Moorlander wrote:Sounds like St. Louis pretty much has this thing "wrapped like a mummy."
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Just don't read the comments. Eugh.Someguy wrote:right here, though not on kmox:
http://www.stltoday.com/business/column ... 78c22.html
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Other posters have mentioned current China cargo hubs in cities like Chicago. Are there other current hubs set up in the United States that mirror the cargo hub that could be set up in St. Louis? If so, what effect has the cargo hub actually had on those cities and how many businesses, warehouses and jobs has the cargo hub actually created. How many Chinese companies actually invested and set up shop in those regions?
Just wondering if the possibilities being touted are actually going to become reality if this thing goes through. Would the cargo hub in St. Louis be different from others in the U.S. What, if anything, makes the hub in St. Louis unique, besides central location and underutilized major airport?
Just wondering if the possibilities being touted are actually going to become reality if this thing goes through. Would the cargo hub in St. Louis be different from others in the U.S. What, if anything, makes the hub in St. Louis unique, besides central location and underutilized major airport?
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Sure, I'll respond to you on both forums Dogtownbnr....
I think what was pointed out is that Chicago and Dallas both have China cargo flights already. However, those cities do NOT have 'official hUB' status (are we really sure what exactly 'HUB' means at this time?)
I don't think anyone knows really knows how big this will get. It's just too early to tell. Hell, it may take decades to realize the full potential.
I'm anxious to hear what comes to light when the official announcement is made in a few weeks. It's likely that we won't see much, if anything, change in the short term.
Is this finally the time our regional and state leaders get 'props' from the general public?
I think what was pointed out is that Chicago and Dallas both have China cargo flights already. However, those cities do NOT have 'official hUB' status (are we really sure what exactly 'HUB' means at this time?)
I don't think anyone knows really knows how big this will get. It's just too early to tell. Hell, it may take decades to realize the full potential.
I'm anxious to hear what comes to light when the official announcement is made in a few weeks. It's likely that we won't see much, if anything, change in the short term.
Is this finally the time our regional and state leaders get 'props' from the general public?
I think the idea behind a potential hub here is that it will be Chinese airlines shipping goods rather than U.S. ones. There's not really a city in the U.S. with a Chinese airline stronghold.
Do you think the recent tax hikes in Illinois could have any affect on a hub coming here rather than Mid-America? I think it could. The corporate tax rate could go as high as 7% for some companies, and 5% for all citizens in Illinois. However, the decision may have already been made regarding where to start the cargo hub.
Or would these taxes even affect chinese airlines operating in the U.S.? Not sure how the free trade zones work.
Do you think the recent tax hikes in Illinois could have any affect on a hub coming here rather than Mid-America? I think it could. The corporate tax rate could go as high as 7% for some companies, and 5% for all citizens in Illinois. However, the decision may have already been made regarding where to start the cargo hub.
Or would these taxes even affect chinese airlines operating in the U.S.? Not sure how the free trade zones work.
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This.pat wrote:I think the idea behind a potential hub here is that it will be Chinese airlines shipping goods rather than U.S. ones. There's not really a city in the U.S. with a Chinese airline stronghold.
Like most of us, I'm fuzzy on the logistics and mechanics of all this.
That said, I think (emphasis on 'think' and not sure) the other cities—Atlanta, Chicago, Dallas—are US carriers (Delta, United, FedEx, UPS) importing/exporting goods based on the demands of shippers, manufacturers and freight brokers. Brokers and Freight Forwarders is Mid-America's model.
First, China want its airlines to get in on the action ($$$). Second, IIRC, the flights from Lambert will be more scheduled. Beef flown out every Tuesday, Carp every Thursday and so on. That's why backfill is so important. The US can ship stuff other cities already are, can we ship enough to consistently fill scheduled cargo flights.
I think (there I go again) the hope is that 'hub status' will be so competitive that goods that used to fly out of other cities will now come to STL. I'm sure that's why McKee is so keen on warehouses in NorthPark and the Chinese so keen on our central location and infrastructure—rail, highway and barge connections.
Please correct me if I'm wrong. Gone Corporate?
That said, I think (emphasis on 'think' and not sure) the other cities—Atlanta, Chicago, Dallas—are US carriers (Delta, United, FedEx, UPS) importing/exporting goods based on the demands of shippers, manufacturers and freight brokers. Brokers and Freight Forwarders is Mid-America's model.
First, China want its airlines to get in on the action ($$$). Second, IIRC, the flights from Lambert will be more scheduled. Beef flown out every Tuesday, Carp every Thursday and so on. That's why backfill is so important. The US can ship stuff other cities already are, can we ship enough to consistently fill scheduled cargo flights.
I think (there I go again) the hope is that 'hub status' will be so competitive that goods that used to fly out of other cities will now come to STL. I'm sure that's why McKee is so keen on warehouses in NorthPark and the Chinese so keen on our central location and infrastructure—rail, highway and barge connections.
Please correct me if I'm wrong. Gone Corporate?
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^ Damn; sought out by name.
Here’s something, acknowledged a little high-reaching sometimes, but still pragmatically possible:
The “Big Idea”, at its essence, has the goal of turning Saint Louis in the near term into an aerial harbor; truly, an “air port”. As traditional international commerce is conducted mainly by boats, we’d be welcoming the Chinese to ship by plane at a level in which they haven’t before, and with the opportunity to run these new operations in the US. While aerial transportation is more expensive than naval shipping, the ability to expedite delivery is a value-adding opportunity for many goods.
The idea of exporting Missouri agriculture to China, such as steak and fish, takes advantage of such rapid-time delivery air provides, and it allows items to be delivered which never could be beforehand because of the perishable nature of the goods in movement. The growth of the Chinese middle class has opened demand for more Western luxuries, such as steaks, which an aerial port can allow Midwest ranchers & farmers to capitalize where it wouldn’t be possible before. This increases net exports from Missouri and benefits us all. As well, this could lead to Missouri becoming more well known for agricultural output, highlighting our products & their advantages, and potentially putting a stronger light on our growing biosciences industries (plant & animal), offering opportunities to seek new investors.
Other goods to be shipped to China via air could include advanced machinery and pharmaceuticals, goods that are sensitive to shipping because of their fragile nature and are sought on a more time-sensitive schedule. But, when considering time-sensitive shipping, a whole world opens up for what can go out. Chinese legal documents heading to the States can go through Lambert quickly. So could critical medical equipment.
This could even open up cooperative “Just-In-Time Manufacturing” between the US and China directly. Say a component is needed for a subsidiary company’s production line in Shenzhen; it would be so much easier & accessible for the primary company to deliver these components via air freight. Wow, JIT standards could really fly here and build even further inter-dependence between the Chinese and American economies; long-term relationship building could really take off from a macro perspective. Emerson could have a field day with this manufacturing management capability.
What would the US receive back as imports? A: Whatever the Chinese want to ship over here in an expedited fashion. This would not include products that are not time-sensitive in delivery, so I don’t see us ever receiving primary shipments of textiles or bulk machinery. But say Apple is about ready to release their new ‘super cool’ product, which are manufactured by Foxxcomm outside Guangzhou. With fears of internal proprietary technologies being spied upon by other companies, direct aerial shipment of these already-sensitive goods could allow for the major shipments of the new i-Whatever into the States via air, directly to retail stores, with better ability to control product release, increasing total value to shareholders by better protecting intellectual property.
The Chinese appreciate this “hub” arrangement because THEY would be the ones running the show here. It wouldn’t be UPS, FedEx, DHL, or whoever else; they would now have the opportunity to set up US-based shipping in direct competition. This provides them headway into a highly competitive market.
Dogtown: An aerial hub in Saint Louis would differ from those of the other cities you mentioned because of the transporters themselves. Those 3 cities are each hubs for domestic airlines that fly into China:
- Chicago: United Airlines.
- Atlanta: Delta Airlines.
- Dallas / Fort Worth: American Airlines.
These are basically passenger carriers that also ship product over in addition to their passenger loads. Their airports are overwhelmingly focused on passenger travel by these airlines specifically. (Much of what comes in anyways is based on established domestic demand rather than the exporters promoting their products domestically to their US operations for resale)
None of these other cities are mirroring what Lambert could become with a “hub” designation. I think what Lambert could more likely resemble IF these deals are made would be a multinational version of Memphis’, Louisville’s, or Indianapolis’ airport freight centers, home to FedEx, UPS, and DHL aerial operations, respectively (I think I have all that correctly). These domestics are replaced with Chinese-HQ’d airlines out of Lambert.
Say the Chinese US-based logistics company idea develops over a number of years. Down the road, this could even mean a Chinese freight shipment could take place with a 747 landing at Lambert from Shanghai by Chinese Shipper X, which then transfers the import from the 747 to another, smaller Chinese Shipper X plane flown only in the US, for domestic delivery of that original export into Philadelphia.
Could a Chinese airline also begin to compete for US domestic travel, based at Lambert? Maybe this could happen, although I’m personally not bullish on the state of the US passenger airline industry. Should the industry ever rebound, though, and Air China wants to compete, they’d probably look to Lambert as a primary city for basing flights. Could Lambert also be a gateway for passengers traveling to China? It surely could.
For all these China-based companies working in the US for logistics, they would need to establish US-based administrative operations. This may include Chinese employees moving to expatriate status in the US, but it would primarily be US workers employed by a Chinese company. These administrative offices would be based domestically; the most logical choice for basing these operations is Saint Louis, hands down. There’s an end to office tower vacancies in Downtown; we could expect to see new construction of office buildings to meet this new influx of demand.
This doesn’t take into consideration the additional strategy of being a “hub” center for Chinese flights into Latin America, a market almost completely untapped by the Chinese because of geography and flight patterns. If we could also act as a halfway point, we could also be a new access point.
We’d be the Gateway to the West, to the Far East, and for the Far East to the Southern Hemisphere.
Demand could also exist by domestic companies wanting proximity to the new “aerial harbor” that Lambert could turn into. They’d want their products close to final shipping points towards China. As well as warehousing, this could mean new opportunities for technology-based manufacturing jobs being based in Saint Louis. Pharmaceutical companies would love to ship more drugs, and the Chinese provide a market with strong demand for quality drugs, as well as being home to many diseases treatable by drugs in many pharm companies’ back-catalogues, and where demand is strong for “Made in USA” stamped on the label for our FDA quality standards (And Express Scripts would go crazy if it could get initial market entry for 1.6 BILLION new customers). Other industries that could capitalize on location include many high-tech products, from servers to mobile chip technology, where it is still made in the US.
Imagine that: Saint Louis becomes something of a manufacturing center again.
Most domestic companies wouldn’t want to move their operations to Saint Louis or set up a divisional office here, but they sure would want to access the area’s warehouses for their products heading to Beijing. So, as well as seeing warehouses spring up all over, we can expect to see more trucks, trains, and maybe even barges moving goods headed to property next to the Great Wall (“on the good side”). With all this new transport coming in, we could surely see an increase in investment, maintenance, and quality into our region’s transportation infrastructure. The need for warehousing also would lead to new development especially in the McKee developments of NorthPark and NorthSide – yes, North Saint Louis, seen now as a potential center for transportation logistics operations, not just for blight.
This whole time, the Chinese would become more familiar with Saint Louis as a crucial connection point to the US market. The image of the Arch would become a recognized symbol to many Chinese of their entry into the US. Sure, we’re not commonly found in major movies and are not likely to compete for the “image” of the US that LA and NYC have, but we’d definitely be able to connect into the minds of the business leaders of China. They control the capital, and their decisions are the ones that truly matter towards Saint Louis’ potential. Some of these major Chinese business leaders may want to invest in the Saint Louis area, not just by buying large houses or starting predominantly-Chinese country clubs or retreats, but by investing in local companies big and small. And for anyone who’s seen pictures of cities like Shanghai/Pudong, Xinhua, and especially Hong Kong, then you know the Chinese love to build beautiful buildings and fill them full of companies. Also, if we could get some credible Chinese banks over here, with investment banking arms, then Saint Louis could even have a new direct route to new venture capital streams previously unidentifiable.
Again: China is the second-largest global economy, after the US, and is home to 1.6 billion people, over five times that of the United States. And Saint Louis would be the primary aerial entry point for commerce between these two countries. The world’s two largest economies, with a focus on Saint Louis; there’s not really anything theoretically larger for Saint Louis to seek for economic development.
And above all, think of the tax revenues that could come in if we have steady air traffic & the resulting commerce of Chinese ops based in Saint Louis. To quote XXXX in Layer Cake: “Not millions. Farking billions.” New investment, new employment, new residents; those are a lot of taxable opportunities. There’s a lot that a large new revenue stream could do for the public sector; just think about how much could be done for the City Schools with wholly new monies coming in.
Wow, I didn’t mean to type this long. One final thought…
Landing the “Big Idea” could once again turn Saint Louis into an “International City”.
First, if we could successfully do this for China, who’s to say that we couldn’t also do this for other East Asian countries? Lambert, and Mascoutah, could theoretically grow to a hub for other East Asian countries wanting centralized US shipping. More of all the same above.
Second, this whole thing could make Saint Louis geographically relevant again. As the world has grown “flatter”, geography loses out to industry for the growth of urban areas (think any new Western cities are being built because of their rivers?). Like much of the Midwest, Saint Louis has been passed over for the East and West coasts. This could provide a new positioning of Saint Louis because of geography but in a trans-geographic fashion.
Third, these opportunities for economic growth could very easily translate into population growth. With a stagnant economy with unemployment maintained above 9% for over two years, having new opportunities coming in could lead to a large inflow of people to the area. This inflow would be based on a growing industry & related industries; this would be similar to the growth of an industry center like Silicon Valley or the NC Triangle than the real estate-based boom cities of Phoenix or South Florida.
And most of all, Saint Louis would become globally relevant again. Sure, we’re a good-size city, but how many Chinese do you think could find Saint Louis on a map? How many Indians do you think have heard of Saint Louis? What is the global perception of Saint Louis? The US is currently home to maybe 5 “global” cities in NYC, LA, Chicago, Miami, and San Francisco, reflective in their international cultures, global perceptions, populations, and international relevance. This is what Saint Louis was like at the turn of the 20th Century, and from which we haven’t returned. Long-term economic development in direct conjunction with China could be a fully-transformative occurrence, once in a lifetime (twice in eternity) opportunity for the City of Saint Louis. If done right, IF, then who knows the potentials ahead.
What will be the reality, assuming this even takes place? Only time will tell. Too many moving parts to make a guess.
And yes, this post reaches, and it may not reflect the traditional, almost pervasive mindset of “show me”. But in the end, this is “The Big Idea”, and to really see what it can be, it’s good to occasionally let yourself think big.
Here’s something, acknowledged a little high-reaching sometimes, but still pragmatically possible:
The “Big Idea”, at its essence, has the goal of turning Saint Louis in the near term into an aerial harbor; truly, an “air port”. As traditional international commerce is conducted mainly by boats, we’d be welcoming the Chinese to ship by plane at a level in which they haven’t before, and with the opportunity to run these new operations in the US. While aerial transportation is more expensive than naval shipping, the ability to expedite delivery is a value-adding opportunity for many goods.
The idea of exporting Missouri agriculture to China, such as steak and fish, takes advantage of such rapid-time delivery air provides, and it allows items to be delivered which never could be beforehand because of the perishable nature of the goods in movement. The growth of the Chinese middle class has opened demand for more Western luxuries, such as steaks, which an aerial port can allow Midwest ranchers & farmers to capitalize where it wouldn’t be possible before. This increases net exports from Missouri and benefits us all. As well, this could lead to Missouri becoming more well known for agricultural output, highlighting our products & their advantages, and potentially putting a stronger light on our growing biosciences industries (plant & animal), offering opportunities to seek new investors.
Other goods to be shipped to China via air could include advanced machinery and pharmaceuticals, goods that are sensitive to shipping because of their fragile nature and are sought on a more time-sensitive schedule. But, when considering time-sensitive shipping, a whole world opens up for what can go out. Chinese legal documents heading to the States can go through Lambert quickly. So could critical medical equipment.
This could even open up cooperative “Just-In-Time Manufacturing” between the US and China directly. Say a component is needed for a subsidiary company’s production line in Shenzhen; it would be so much easier & accessible for the primary company to deliver these components via air freight. Wow, JIT standards could really fly here and build even further inter-dependence between the Chinese and American economies; long-term relationship building could really take off from a macro perspective. Emerson could have a field day with this manufacturing management capability.
What would the US receive back as imports? A: Whatever the Chinese want to ship over here in an expedited fashion. This would not include products that are not time-sensitive in delivery, so I don’t see us ever receiving primary shipments of textiles or bulk machinery. But say Apple is about ready to release their new ‘super cool’ product, which are manufactured by Foxxcomm outside Guangzhou. With fears of internal proprietary technologies being spied upon by other companies, direct aerial shipment of these already-sensitive goods could allow for the major shipments of the new i-Whatever into the States via air, directly to retail stores, with better ability to control product release, increasing total value to shareholders by better protecting intellectual property.
The Chinese appreciate this “hub” arrangement because THEY would be the ones running the show here. It wouldn’t be UPS, FedEx, DHL, or whoever else; they would now have the opportunity to set up US-based shipping in direct competition. This provides them headway into a highly competitive market.
Dogtown: An aerial hub in Saint Louis would differ from those of the other cities you mentioned because of the transporters themselves. Those 3 cities are each hubs for domestic airlines that fly into China:
- Chicago: United Airlines.
- Atlanta: Delta Airlines.
- Dallas / Fort Worth: American Airlines.
These are basically passenger carriers that also ship product over in addition to their passenger loads. Their airports are overwhelmingly focused on passenger travel by these airlines specifically. (Much of what comes in anyways is based on established domestic demand rather than the exporters promoting their products domestically to their US operations for resale)
None of these other cities are mirroring what Lambert could become with a “hub” designation. I think what Lambert could more likely resemble IF these deals are made would be a multinational version of Memphis’, Louisville’s, or Indianapolis’ airport freight centers, home to FedEx, UPS, and DHL aerial operations, respectively (I think I have all that correctly). These domestics are replaced with Chinese-HQ’d airlines out of Lambert.
Say the Chinese US-based logistics company idea develops over a number of years. Down the road, this could even mean a Chinese freight shipment could take place with a 747 landing at Lambert from Shanghai by Chinese Shipper X, which then transfers the import from the 747 to another, smaller Chinese Shipper X plane flown only in the US, for domestic delivery of that original export into Philadelphia.
Could a Chinese airline also begin to compete for US domestic travel, based at Lambert? Maybe this could happen, although I’m personally not bullish on the state of the US passenger airline industry. Should the industry ever rebound, though, and Air China wants to compete, they’d probably look to Lambert as a primary city for basing flights. Could Lambert also be a gateway for passengers traveling to China? It surely could.
For all these China-based companies working in the US for logistics, they would need to establish US-based administrative operations. This may include Chinese employees moving to expatriate status in the US, but it would primarily be US workers employed by a Chinese company. These administrative offices would be based domestically; the most logical choice for basing these operations is Saint Louis, hands down. There’s an end to office tower vacancies in Downtown; we could expect to see new construction of office buildings to meet this new influx of demand.
This doesn’t take into consideration the additional strategy of being a “hub” center for Chinese flights into Latin America, a market almost completely untapped by the Chinese because of geography and flight patterns. If we could also act as a halfway point, we could also be a new access point.
We’d be the Gateway to the West, to the Far East, and for the Far East to the Southern Hemisphere.
Demand could also exist by domestic companies wanting proximity to the new “aerial harbor” that Lambert could turn into. They’d want their products close to final shipping points towards China. As well as warehousing, this could mean new opportunities for technology-based manufacturing jobs being based in Saint Louis. Pharmaceutical companies would love to ship more drugs, and the Chinese provide a market with strong demand for quality drugs, as well as being home to many diseases treatable by drugs in many pharm companies’ back-catalogues, and where demand is strong for “Made in USA” stamped on the label for our FDA quality standards (And Express Scripts would go crazy if it could get initial market entry for 1.6 BILLION new customers). Other industries that could capitalize on location include many high-tech products, from servers to mobile chip technology, where it is still made in the US.
Imagine that: Saint Louis becomes something of a manufacturing center again.
Most domestic companies wouldn’t want to move their operations to Saint Louis or set up a divisional office here, but they sure would want to access the area’s warehouses for their products heading to Beijing. So, as well as seeing warehouses spring up all over, we can expect to see more trucks, trains, and maybe even barges moving goods headed to property next to the Great Wall (“on the good side”). With all this new transport coming in, we could surely see an increase in investment, maintenance, and quality into our region’s transportation infrastructure. The need for warehousing also would lead to new development especially in the McKee developments of NorthPark and NorthSide – yes, North Saint Louis, seen now as a potential center for transportation logistics operations, not just for blight.
This whole time, the Chinese would become more familiar with Saint Louis as a crucial connection point to the US market. The image of the Arch would become a recognized symbol to many Chinese of their entry into the US. Sure, we’re not commonly found in major movies and are not likely to compete for the “image” of the US that LA and NYC have, but we’d definitely be able to connect into the minds of the business leaders of China. They control the capital, and their decisions are the ones that truly matter towards Saint Louis’ potential. Some of these major Chinese business leaders may want to invest in the Saint Louis area, not just by buying large houses or starting predominantly-Chinese country clubs or retreats, but by investing in local companies big and small. And for anyone who’s seen pictures of cities like Shanghai/Pudong, Xinhua, and especially Hong Kong, then you know the Chinese love to build beautiful buildings and fill them full of companies. Also, if we could get some credible Chinese banks over here, with investment banking arms, then Saint Louis could even have a new direct route to new venture capital streams previously unidentifiable.
Again: China is the second-largest global economy, after the US, and is home to 1.6 billion people, over five times that of the United States. And Saint Louis would be the primary aerial entry point for commerce between these two countries. The world’s two largest economies, with a focus on Saint Louis; there’s not really anything theoretically larger for Saint Louis to seek for economic development.
And above all, think of the tax revenues that could come in if we have steady air traffic & the resulting commerce of Chinese ops based in Saint Louis. To quote XXXX in Layer Cake: “Not millions. Farking billions.” New investment, new employment, new residents; those are a lot of taxable opportunities. There’s a lot that a large new revenue stream could do for the public sector; just think about how much could be done for the City Schools with wholly new monies coming in.
Wow, I didn’t mean to type this long. One final thought…
Landing the “Big Idea” could once again turn Saint Louis into an “International City”.
First, if we could successfully do this for China, who’s to say that we couldn’t also do this for other East Asian countries? Lambert, and Mascoutah, could theoretically grow to a hub for other East Asian countries wanting centralized US shipping. More of all the same above.
Second, this whole thing could make Saint Louis geographically relevant again. As the world has grown “flatter”, geography loses out to industry for the growth of urban areas (think any new Western cities are being built because of their rivers?). Like much of the Midwest, Saint Louis has been passed over for the East and West coasts. This could provide a new positioning of Saint Louis because of geography but in a trans-geographic fashion.
Third, these opportunities for economic growth could very easily translate into population growth. With a stagnant economy with unemployment maintained above 9% for over two years, having new opportunities coming in could lead to a large inflow of people to the area. This inflow would be based on a growing industry & related industries; this would be similar to the growth of an industry center like Silicon Valley or the NC Triangle than the real estate-based boom cities of Phoenix or South Florida.
And most of all, Saint Louis would become globally relevant again. Sure, we’re a good-size city, but how many Chinese do you think could find Saint Louis on a map? How many Indians do you think have heard of Saint Louis? What is the global perception of Saint Louis? The US is currently home to maybe 5 “global” cities in NYC, LA, Chicago, Miami, and San Francisco, reflective in their international cultures, global perceptions, populations, and international relevance. This is what Saint Louis was like at the turn of the 20th Century, and from which we haven’t returned. Long-term economic development in direct conjunction with China could be a fully-transformative occurrence, once in a lifetime (twice in eternity) opportunity for the City of Saint Louis. If done right, IF, then who knows the potentials ahead.
What will be the reality, assuming this even takes place? Only time will tell. Too many moving parts to make a guess.
And yes, this post reaches, and it may not reflect the traditional, almost pervasive mindset of “show me”. But in the end, this is “The Big Idea”, and to really see what it can be, it’s good to occasionally let yourself think big.
Another excellent post GC!
Allow me to comment on a few items:
This is unlikely to happen. So-called cabotage is not allowed in the USA for foreign airlines, nor anywhere else in the world with very few exceptions. Again, they can partner with US-based companies.
China's population is about 1.3 billion. Might not sound like a big difference from 1.6 but it is 300 million less, about the total population of the US.
Again, great post GC. Love the optimism. I too feel that if we do this right it could be the most important development for St. Louis in decades. It would put St. Louis back on the international map.
Allow me to comment on a few items:
They will be in control of and operating the China-USA-China flights. However, they will have to establish partnerships with freight forwarders (like DHL) to distribute from and feed to their hub here. They cannot setup US-based shipping in direct competition. (At least not until cabotage laws are changed, which is unlikely to happen.)Gone Corporate wrote:The Chinese appreciate this “hub” arrangement because THEY would be the ones running the show here. It wouldn’t be UPS, FedEx, DHL, or whoever else; they would now have the opportunity to set up US-based shipping in direct competition. This provides them headway into a highly competitive market.
Agreed. Would like to add that there are significant cargo-only operations present at all three airports.An aerial hub in Saint Louis would differ from those of the other cities you mentioned because of the transporters themselves. Those 3 cities are each hubs for domestic airlines that fly into China:
- Chicago: United Airlines.
- Atlanta: Delta Airlines.
- Dallas / Fort Worth: American Airlines.
These are basically passenger carriers that also ship product over in addition to their passenger loads. Their airports are overwhelmingly focused on passenger travel by these airlines specifically. (Much of what comes in anyways is based on established domestic demand rather than the exporters promoting their products domestically to their US operations for resale)
DHL's main operations are based in Cincinatti (CVG). Indianapolis id Fedex' second-largest base after Memphis.None of these other cities are mirroring what Lambert could become with a “hub” designation. I think what Lambert could more likely resemble IF these deals are made would be a multinational version of Memphis’, Louisville’s, or Indianapolis’ airport freight centers, home to FedEx, UPS, and DHL aerial operations, respectively (I think I have all that correctly). These domestics are replaced with Chinese-HQ’d airlines out of Lambert.
Say the Chinese US-based logistics company idea develops over a number of years. Down the road, this could even mean a Chinese freight shipment could take place with a 747 landing at Lambert from Shanghai by Chinese Shipper X, which then transfers the import from the 747 to another, smaller Chinese Shipper X plane flown only in the US, for domestic delivery of that original export into Philadelphia.
This is unlikely to happen. So-called cabotage is not allowed in the USA for foreign airlines, nor anywhere else in the world with very few exceptions. Again, they can partner with US-based companies.
A Chinese (foreign) airline will not be allowed to operate domestic flights in the US. However, if they want to start flying passengers they could partner with a US-based airline. For instance, China Eastern could start code-sharing with Delta once they have joined Skyteam (Mid-2011). As a positive side-effect, this might entice Delta to ramp up their operations at STL. (I am speculating.)Could a Chinese airline also begin to compete for US domestic travel, based at Lambert? Maybe this could happen, although I’m personally not bullish on the state of the US passenger airline industry. Should the industry ever rebound, though, and Air China wants to compete, they’d probably look to Lambert as a primary city for basing flights. Could Lambert also be a gateway for passengers traveling to China? It surely could.
China is the second-largest global economy, after the US, and is home to 1.6 billion people, over five times that of the United States.
China's population is about 1.3 billion. Might not sound like a big difference from 1.6 but it is 300 million less, about the total population of the US.
Again, great post GC. Love the optimism. I too feel that if we do this right it could be the most important development for St. Louis in decades. It would put St. Louis back on the international map.
Good God, Gone Corporate...I'm gonna have to wait and schedule time to read that thing...
Related to the China Hub:
US Treasury Secretary Geithner’s remarks ahead of the state visit to the United States by Chinese President Hu Jintao:
“The benefits of this relationship are hard to capture in any one statistic, but remember this. The United States is on track to export more than $100 billion of goods and services to China this year. Our exports to China are growing at twice the rate of our exports to the rest of the world.”
The whole statement (in Portfolio):
Geithner: China Needs to Do More on Exports
US Treasury Secretary Geithner’s remarks ahead of the state visit to the United States by Chinese President Hu Jintao:
“The benefits of this relationship are hard to capture in any one statistic, but remember this. The United States is on track to export more than $100 billion of goods and services to China this year. Our exports to China are growing at twice the rate of our exports to the rest of the world.”
The whole statement (in Portfolio):
Geithner: China Needs to Do More on Exports
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St. Louis could be named China's air hub after Hu Jintao's Washington DC visit
http://www.examiner.com/job-search-in-s ... n-dc-visit
http://www.examiner.com/job-search-in-s ... n-dc-visit
http://www.stltoday.com/business/column ... 2bc8b.htmlThe Commission is waiting for Chinese officials to pick an airline to begin final negotiations with Lambert-St. Louis International Airport on starting flights. And while there has been some speculation that a decision might come during Hu's visit to the U.S. this week, Jones said that is unlikely.
Still, a decision is near. Another small trade delegation will be visiting St. Louis this weekend after Hu visits Chicago - another good sign, Jones said. And Hub officials have been getting good signals from the Chinese about cargo flights. Jones said he expects word on an airline - three visited St. Louis in the fall - "early" in the first quarter, with flights to begin by summer.
"In those cities where significant cargo operations have grown over the last twenty years, jobs have flocked in," Hamm-Niebruegge said. She also said she sees potential for trade not just with China but also with South America, and for positioning Lambert as a key link between Asia and South America.
http://kmox.cbslocal.com/2011/01/18/car ... pointment/While it’s been nearly two and a half months since the Chinese toured Lambert, there is still no commitment or deal on the cargo hub, leaving airport officials and city residents disappointed.
But, based on prior communication from the Chinese, Missouri Chamber of Commerce commissioner Dan Mehan says he still believes the proposal will happen.
Mehan says a high level Chinese trade delegation will visit Lambert again this weekend, which is a sign that the future of the cargo hub is still in the works.
The PD article doesn't say "disappointment" to me, but maybe KMOX talked to different people or something.
I don't think it's different people. I think it's Kevin Killeen.
I don't read anything from him nor that P-D Eeyore, Bill McClellan.
I don't read anything from him nor that P-D Eeyore, Bill McClellan.
- 2,932
We're in the final stages now.
From the Saint Louis Business Journal:
In the immortal words of Glenn Quagmire... Dear diary: jackpot!
It was previously reported that part of President Hu's delegation, composed of Chinese business leaders, would be splitting from the main diplomatic delegation after their Chicago visit to travel to Saint Louis. Reports were that nine businessmen would be heading here (no idea who they exactly are). Especially premised upon the above news, I'd consider this a forward group seeking establishing domestic operations as well as investment opportunities, including preliminary opportunities for joint ventures.
Happy days.
From the Saint Louis Business Journal:
Source: http://www.bizjournals.com/stlouis/news ... mbert.htmlAirline picked for Lambert cargo negotiations
St. Louis Business Journal - by Kelsey Volkmann
Date: Wednesday, January 19, 2011, 10:01am CST
Chinese officials have picked an airline to negotiate a deal for cargo flights at Lambert-St. Louis International Airport, U.S. Sen. Claire McCaskill's press secretary said Wednesday.
McCaskill, D-Mo., said the deal was a great opportunity for jobs and exports for Midwest agriculture and manufacturing.
The news comes during Chinese President Hu Jintao’s visit to the U.S. China is expected to announce deals Wednesday to buy $45 billion in U.S. exports, including a $19 billion agreement to buy 200 Boeing airplanes, sources told The Washington Post. The deal also includes agriculture, telecommunications and computer companies, and create 235,000 jobs in the U.S., sources told the Post.
In the immortal words of Glenn Quagmire... Dear diary: jackpot!
It was previously reported that part of President Hu's delegation, composed of Chinese business leaders, would be splitting from the main diplomatic delegation after their Chicago visit to travel to Saint Louis. Reports were that nine businessmen would be heading here (no idea who they exactly are). Especially premised upon the above news, I'd consider this a forward group seeking establishing domestic operations as well as investment opportunities, including preliminary opportunities for joint ventures.
Happy days.
#Boeing expected to get $19 billion piece of #China deal: http://bit.ly/e0S8LO #STL #MO #business (will update)
I expected (and hoped for) the Chinese to pick China Eastern Airlines to negotiate the Lambert cargo deal. This airline operates from Shanghai-Pudong (PVG) Airport, one of the largest in the world and China's busiest cargo hub.
China Eastern will be joining Skyteam in mid 2011. This opens up the possibility of future code-shared passenger flights with Delta and might be a good incentive for our friends from Atlanta to ramp up operations at Lambert.
China Eastern will be joining Skyteam in mid 2011. This opens up the possibility of future code-shared passenger flights with Delta and might be a good incentive for our friends from Atlanta to ramp up operations at Lambert.