Cosmas and Martini

16.781 Term Project December 14th, 2007

UPS and FedEx Air Hubs: Comparing Louisville and Memphis Cargo Hub Operations
by Alex Cosmas and Bastien Martini

The economies of scale afforded to passenger airlines by the use of a hub-and-spoke model are also enjoyed, sometimes to an even greater extent, by cargo carriers. The worlds two largest integrated carriers, UPS and FedEx, run their central air hubs in Louisville (SDF) and Memphis (MEM), respectively. We present a case study of the air hub operations at SDF and MEM. The land-side and air-side operations are contrasted between SDF and MEM, and generalizations are drawn regarding issues prevalent to cargo versus passenger hubs.

I. Air Cargo in History

The beginning of the last century saw the dawn of flight. Since the Wright brothers first flight, the transfer of goods through air mail and air freight has grown tremendously. The first cargo flight ever took place between Dayton and Columbus, Ohio in November 1910, when a department store shipped a bolt of silk. Even though the shipment was of small size, the flight stayed in the records because it was achieved in less time than possible by train. Some time elapsed before the first commercial cargo airline was created. In the 1920s passenger carriers created entities to carry freight, but it remained a very low fraction of their business. In fact, the first all-cargo airline was created after World War II, but bankruptcies and accidents in the early 1950s made most of the carriers quit the business and in 1954, only two carriers remained: Slick Airways and Flying Tigers. Until cargo deregulation in 1977, the air cargo industry faced slow growth and remained a small percentage of air traffic. Since 1978, the freight business has changed tremendously. One man, Fred Smith, believed that mixing passengers traffic with freight traffic was not the future because he believed route patterns for passengers and cargo were different. He created FedEx in 1973 and started earning profits by his third year. FedExs historic rival, United Parcel Service (UPS), was created in 1907 as a bicycle-based delivery service. In 1953, UPS expanded its business by chartering an air service named UPS Blue Label Air, and by 1988 UPS began operating its own airline.

II. Air Cargo Industry Overview

Todays cargo industry consists of three market segments: express or time definite packages (weighing less than 100 lb.), heavyweight freight shipments (packages greater than 100 lb.) and mail transport. Integrated cargo companies such as FedEx and UPS serve all three categories, but there is an abundance of carriers that provide service to only one market segment. In addition, airfreight is carried by both passenger airlines and all-cargo airlines. Passenger airlines carry freight in the belly of passenger flights, and often operate dedicated freight aircraft. All-cargo airlines are either classified as Integrated Express Carriers which provide door-to-door package deliveries, or

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December 14th, 2007 Non-Integrated Freight Carriers which offer heavyweight freight shipments through freight forwarders, etc. Scheduled and express freight constitute the largest proportion of air cargo shipments, with charter freight and mail a much smaller proportion.

Figure 1 Air Freight Revenue Ton-Miles by Carrier Type, 1994-2002 (Source: DOT Form 41)

The air cargo industry has become a major player of the air industry since deregulation. Even though this sector has always experienced growth before deregulation, 1978 has triggered a wide range of possibilities for the industry, as seen in Figure 1. Notwithstanding the early years after deregulation when the industry got accustomed with new practice, air freight has experienced an average annual growth of nearly 8% between 1982 and 2000. Due to globalization, the FAA has forecasted this trend to continue as seen in Table 1.
Table 1 ICAO Outlook for Air Transport to the Year 2015 and ICAO Passenger & Freight Statistics, various years

Passenger Freight

1992 1995 5.2% 9.9%

1995 2000 6.2% 7.3%

2000 2005 4.1% 3.8%

2002 2015 4.4% 5.5%

It is also interesting to note the difference between passenger and all-cargo growth over the last 10 years. While both classes of airlines carried similar levels of freight in 1994 (expressed in tonmiles), all-cargo airlines have experienced larger growth than passenger in every year since 1994 (see Figure 2). Freight is still forecasted to experience a higher growth rate than passenger airlines over the next ten years, as seen in Table 1.

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Figure 2 Air Freight Revenue Ton-Miles by Carrier Type, 1994-2002 (Data Source: FAA Aerospace Forecasts, various years)

Despite its rapid growth, air freight still accounts for less than half a percent of the overall freight ton-miles transported in the U.S. Waterborne, intercity trucks and rail account for nearly 99.5% of freight tonnage shipped domestically.1 However, this data reflects the fact that ships, trains, and trucks are used to ship bulk freight and heavy packages over long distances whereas aircraft are used for relatively lightweight, rapid shipments. But according to the Organizations for Economic Cooperation and Development (OECD), the value of air cargo accounts for more than 33% of the world trade in merchandise, while its weight is only 2% of all the cargo moved world-wide.

Figure 3 Modal Share of Domestic Ton-Miles, 1990 and 2001 (Source: Bureau of Transportation Statistics, National Transportation Statistics 2004)

In a world where time is of increasing value, the share of air cargo share is steadily increasing. While it accounted for only 0.3% of the cargo market share in 1990, air cargo accounted for 0.4% in 2001 and is forecasted to grow at 5.2% per year according to BTS (see Table 2), faster than any other mode of freight shipping and an average expansion of world GDP at 3%. The worlds two largest integrated carriers stand to shoulder much of this growth, and therefore their air hub operations must be flexible enough to accommodate the increased demand.
1

Data Source: Bureau of Transportation Statistics, National Transportation Statistics 2004

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Table 2 Comparison of Domestic Freight Demand Forecasts (Source: historic data from BTS, National Transportation Statistics 2003; forecasts from sources described in report text)

a: Forecast for intercity truck only.

III. Door-to-Door Package Service

Every weekday UPS picks up and delivers 14.8 packages to over 80 percent of the globe. A good portion of these packages are delivered within 48 hours after pickup. Both UPS and FedEx use an advanced sort system to separate and organize volumes of packages into small, manageable piles sorted by delivery location. The typical UPS or FedEx package follows a similar process from pickup to delivery:2 1) Users take packages to a UPS Store or FedEx Kinkos where the package is weighed and labeled. Alternatively, users can print out smart labels from ups.com and fedex.com and schedule a pickup when a delivery truck is in the area or drop the package in a local drop box. These smart labels contain tracking codes that are tracked throughout the delivery cycle, and account for over 90% of package labels that travel via FedEx and UPS. 2) At designated times, all of the accumulated packages from a given location travel, usually by truck, to a local or regional sorting facility. If packages are destined further than 200 miles, they travel by air. Otherwise they travel by truck to the local receiving sorting facility. 3) Packages that travel by air are placed into cargo containers that often weigh more than one ton. Because the sort facilities are lined with ball bearing flooring as seen in Figure 4, UPS and FedEx employees can move these containers with minimal effort. The containers allow employees to work remotely with package sorting and then move packages in bulk into the aircraft belly. The packages then head to Louisville or Memphis for further sorting.

Figure 4 Floors are lined with ball bearings to ease the movement of cargo containers
2

Supplemented with information from How UPS Works at www.howstuffworks.com

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4) At the main sorting facility, humans touch each package only twice once to unload and once to load the package to/from the aircraft. During unload, employees scan the package labels and place them on one of three conveyors with the labels facing in any direction except down towards the belt. An array of lasers scans barcodes on all sides of package while measuring the specific dimensions of the package. Weight sensors calculate the center of gravity to better judge the number of pucks and minimum force needed to push packages from one conveyor to another: a. Smalls: mostly letters and other documents, each of which gets its own tray on a conveyor belt b. Mid-size packages: 6-sided boxes up to a certain weight and dimension get their own conveyor belt c. Irregs: irregularly-shapes packages are placed on flat cars and strapped down for the sharp turns and curves around the conveyor system. 5) After approximately 15 minutes, the package travels through the UPS or FedEx hub to its intended destination pile. Similarly-destined packages are placed on cargo containers which are then placed onto aircraft which travel to another regional sorting facility. 6) When unloaded, the package is scanned yet again to tell employees which package car it should be taken to, as well as which space on a given shelf the package should be placed to optimize drivers time. 7) The UPS or FedEx driver uses route-planning software allows him or her to conserve time and fuel to execute the most precise delivery route. A remote delivery device is used to scan a package and receive a signature upon delivery. The whole process has taken less than 24 hours!

Figure 5 Packages are placed on specific shelves in the delivery truck to optimize drivers time.

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IV. United Parcel Service and Federal Express

More than two-thirds of the U.S. air cargo market is controlled by the U.S. two largest cargo airlines: FedEx and UPS, with the latter controlling nearly 50% of the market alone. The international air cargo market, valued at $4.6B by Standard & Poors Net Advantage is more evenly segmented between U.S. cargo carriers, although FedEx, UPS and DHL have the largest individual carrier market shares, as shown in Figure 6.

Figure 6 U.S. Carrier Market Share of Domestic (left) and International (right) Air Cargo Markets (Source: Henry Fund Research, University of Iowa Tippie School of Management)

Because the cost of flying one ton of cargo decreases as aircraft size increases (since fixed costs are spread across greater tonnage), larger freighters are quickly replacing smaller cargo aircraft. This has resulted in a capacity increase of more than 4% per year despite a relatively constant fleet size. This growth in aircraft size is of great importance in airport hub operations, which need to be flexible enough to accommodate larger aircraft. United Parcel Service has its headquarters in Atlanta, Georgia and its airline hub and largest sorting facility called Worldport in Louisville, Kentucky. UPS is the worlds largest package delivery company and a leader in supply chain management. Federal Express is based in Memphis, Tennessee and provides a wide range of business services in addition to its shipping operation. FedEx entered the Chinese market in the 1980s and is therefore better poised to take advantage of Chinas being the fastest growing air cargo market in the world.
Table 3 UPS and FedEx Corporate Statistics (Source: www.fedex.com and www.ups.com)

UPS Market Capitalization 2006 Revenue Daily U.S. Air Volume (packages and documents) $80.6B $39.5B 2.3 million

FedEx $33.4B $32.3B 2.0 million

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Daily Int. Air Volume (packages and documents) Fleet Size Airports Served Air Hubs

1.8 million 273 owned, 326 chartered Domestic 424; International 389 United States: Louisville, Ky. (Main US Air Hub); Philadelphia, Pa.; Dallas, Texas; Ontario, Calif.; Rockford, Ill.; Columbia, S.C.; Hartford, Conn. Europe: Cologne/Bonn, Germany Asia Pacific: Taipei, Taiwan; Pampanga, Philippines; Hong Kong; Singapore Latin America and Caribbean: Miami, Fla., USA Canada: Hamilton, Ontario

1.3 million 370 aircrafts + 297 small aircrafts (253 Cessna Caravan + 8 Fokker + 42 ATR) Domestic 664; International 375 United States: Memphis, Tn. (Main US Air Hub); Indianapolis, In; Fort Worth, Tx; Newark, N.J.; Anchorage, Ak; Oakland, Ca.

Europe: CDG, Paris, France Asia Pacific: Subic Bay, Olongapo City, Philippines

Latin America and Caribbean: Miami, Fla., USA Canada: Toronto Pearson, Ontario

V. Prerequisites for designating an airport as a Cargo Hub

Table 4 summarizes the major differences between passenger and cargo air services, each of which contribute to differences in land-side and air-side operations between the two.
Table 4 Comparison of Passenger and Cargo Air Services (Source: Yeong Heok Lee of Hankuk Aviation University, South Korea)

Passenger Air Services Round Trip Service Unspecified Public Travelers No further Ramp Services Cabin Services Daytime departure/arrival Sensitive to time, routes and stops Airport-to-airport service Annual growth rate(passenger): 4.5%

Cargo Air Services One Way Service Limited Shippers Need Ramp Services: loading/unloading, breakdown, storage, customs, etc. No Cabin Services Night departure/arrival Less sensitive to time, routes and stops Door-to-door and Intermodal service Annual growth rate(ton): 5.4%

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Weather
The most important factor for designating an airport as a cargo hub is weather. Because package delivery is a time-sensitive business, consolidated shippers are dependent upon reliable air service to keep their business running. Cargo hubs are extremely averse to closures or to reduced capacity situations resulting from low visibility, fog, snow or strong winds.

Geographic Position
A cargo hub which is centrally located allows carriers to minimize fuel burn and transit time between the hub and various spokes. The latter is particularly important as package customers have come to expect not just overnight service, but late drop-off and early morning delivery. Memphis and Louisville are both located slightly eastward of the nations center. This positioning allows for reduced delivery time to the east coast for morning deliveries. The first planes take off at 2am central time heading to Europe or the east coast, helping to compensate for the time zone change.

Figure 7 SDF and MEM are centrally located in the US

Noise
Noise restrictions are a third major component for cargo hub designation. Runway configurations and the layout of surrounding communities must allow for nighttime operations. Because UPS and FedEx operate SDF and MEM primarily between 10pm and 3am, the airports must be amenable to noise during nighttime operations. For instance, an airport with nighttime curfews or with capacity limits cannot be used as a cargo airline hub, as DHL learned in Brussels after having purchased the hub from FedEx ten years earlier.3

Congestion
The fourth component in choosing an airport as a cargo hub is its average and peak levels of congestion. Even though much of their operations take place at night when passenger airlines schedule few flights, a cargo airline schedules a significant number of flights during the day, as well
3

Casert, Raf for Associated Press, DHL Pulls international hub out of Brussels after dispute over night flights. Oct. 21, 2004.

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December 14th, 2007 as unscheduled flights to accommodate demand. In addition, because UPS and FedEx have ambitions to grow without having to move to another airport, avoiding congested airports is a must.

Buyer Power
Most importantly, and perhaps correlated with a lack of congestion, it is beneficial for a cargo airline to have a special relationship with its hub airport managers (and the flight controllers) as the primary customer. This relationship is most easily developed with airports where there is no existing major player. This so-called buyer power allows a degree of leverage over other stakeholders at the airport, and the benefit of privileged routings and take-off/landing sequences as compared to other airlines. Louisville International is not a hub for any airline, and its secondlargest operator is Southwest with only 10% of operations. Memphis International, on the other hand, is different because Northwest Airlines also operates a hub at the airport. However, at the time FedEx established itself in Memphis in 1973, MEM was not a hub for any other airline. But in 1985, Republic Airlines established its hub there and was absorbed by Northwest in 1986. FedEx is fortunate, however, that Northwest operates its hub in the daytime so routing benefits are still granted to FedEx at night. In addition to these short-term benefits, buyer power also enables an airline to shape airport developments and operational decisions.

VI. Differences between Cargo and Passenger Hub Operations

Cargo hub airports are inherently different to operate than passenger hubs. FedEx and UPS airside operations differ from those of passenger airlines largely because of technological innovation and test programs they are conducting in collaboration with the FAA. As is discussed below, UPS has taken advantage of improved spacing between arriving aircraft as a result of its ADS-B pilot program. In theory, however, passenger carriers could benefit from similar airside technologies if they could coordinate amongst all other carriers to reach 100% equipage. The table below summarizes what was mentioned above and compares it to the requirements for a passenger airlines hub designation.
Table 5 Factors leading to implementing a hub

Cargo Airline Reliable weather Center Location City with big OD market No Noise constraints at night No Congestion No Major Player Infrastructures
Crucial Important Disadvantage Crucial Important Preferable Capacity to grow

Passenger Airline
Important Considered Preferable Low Importance Important Preferable Connecting buildings

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December 14th, 2007 One major difference in airside operations between the two is the inability of cargo carriers to depeak their schedules as is currently being done by passenger carriers. Human air travelers prefer to fly non-stop between their origin and destination airports. This is largely due to the added inconvenience of deplaning/boarding additional planes, changing gates, risking the loss of baggage and chasing connection times. Connections increase the total time which passengers are spending in transit to get between two points. Therefore, if connections are needed, passengers prefer the shortest connection possible. Passenger carriers are increasingly moving towards de-peaked schedules in order to spread out resource utilization, to avoid triggering major delays, and to improve the passenger experience. Consolidated cargo carrier operations depend upon gathering all inbound cargo before loading outbound flights. The primary airside difference is that cargo is very much an overnight operation, where packages leave their origin in the late evening (after businesses close) and arrive at their destination the following morning (or one thereafter). Given the nature of night-time operations, cargo carriers must pick hubs that are situated away from communities. Furthermore, cargo aircraft leave and arrive at their spokes at off-peak hours, which often prompts the use of sub-optimal runway configurations. However, night-time operations have the benefit of avoiding congestion (which is important to the time-sensitive delivery business) and of being one of the few airlines using an airport, which allows for preferential treatment. Land-side operations differ quite a bit between consolidated cargo carriers and passenger carriers. First, passengers prefer comprehensive airport terminals, complete with stylish dcor, restaurants and shops, and facilities to work or relax. Cargo, which [most often] does not talk, is insensitive to transfer flight waiting times and airport terminal services. Instead, cargo is sensitive to the cost of trans-shipment handling and tedious aircraft changes. Cargo carriers also face fewer safety regulations than their passenger counterparts. Under current FAA regulations, cargo carriers dont have to install the same collision warning systems as those carrying passengers, dont have to add systems that automatically put out fires and can schedule their pilots to work more often.4 An analysis by the Dutch National Aerospace Laboratory in 2000 found that there is an increased risk associated with cargo flights conducted at night compared with daytime operations. This association could not be found for passenger operations.5 In addition, Air Safety Week found that all types of accidents occur more frequently in cargo operations.6 The inherent risks associated with freight impacts the contingency operations and safety plans of a cargo hub airport. Finally, it is important to note that cargo flows are inherently unbalanced in that more flows from Asia to North America than vice versa. For the most part, passengers must always return home and therefore round-trip segments are commonplace for passenger carriers. Cargo carriers must often design their networks with large circle routes that take advantage of flow in one direction. Cargo airline operations managers certainly have their work cut out for them when it comes to contingency planning and seasonality, but the higher yields afforded by cargo make the effort well worth it.
4 5

Associated Press, Cargo, Passenger Planes Rules Differ. September 11th, 2001. Roelen, Alfred, Pikaar, Mijntje et. al of the National Aerospace Laboratory (NLR), the Netherlands. An Analysis of the Safety Performance of Air Cargo Operators. 2000. 6 Air Safety Week: Air Cargo: A Higher Global Risk Profile. December 18, 2000.

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VII. Louisville International Airport (SDF)

Louisville International Airport (SDF) is situated less than ten miles south of Louisville, KY, at the corner of Interstates I65 and I-264. The location is strategic because it is particularly well served by all transport modes. In addition to two highways converging at the airport, there are railroads just east, north and south of the airport, and the Ohio River is only 8 miles from the airport. All transport modes can easily serve the airport. SDF services over 3.8 million passengers and 4.2 billion pounds of cargo per year, rendering it the 68th busiest passenger airport and 3rd largest cargo airport in the U.S. and 9th largest in the world. SDF classifies itself as a low-fare airport serving travelers within a 200-mile radius of the city. The airport serves 29 destinations nonstop. Louisville International is situated on 1200 acres, yet the passenger terminals comprise less than 9 acres, or 1% of the airport area.
Figure 8 Google Map: location of SDF

Runways
SDFs two primary runways are independent and parallel, running North-South and certified for simultaneous operations. The third runway is shorter and generally only used in reduced capacity situations. SDF also has over 62,000 linear feet of taxiways. The airport saw 178,439 operations in 2006.7
Table 6 Basic Runway Data of Louisville International Airport (Source: Louisville International Master Plan)

Orientation 11/29 17L/35R 17R/35L

Length
7,250 ft / 2,210 m 8,580 ft / 2,615 m 11,890 ft / 3,624 m

Width
150 ft / 46 m 150 ft / 46 m 150 ft / 46 m

Separation with 17L/35R

N/A 4,900 ft / 1,500 m

Wind Coverage
90.3% 91.6% 91.6%

FAA Reference Code

D-V D-V D-V

Louisville Regional Airport Authority Aviation Statistics, September 2007

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December 14th, 2007 Interestingly, no runway provides more than 91.6% wind coverage (Table 6). It gives an overall wind coverage for the 3 runways of 96.8%, which is a handicapping condition for airlines, and especially for UPS that operates at any time of the day. However, this wind coverage is based upon a maximum of 10 knots side-wind, which is relatively little. For 20 knots, SDFs wind coverage is 99.77% for each of its 3 runways, giving an overall wind coverage of 99.97%. Louisville also receives less than fourteen inches of snowfall annually so snow is not a big problem for operations. Operations at SDF are certified CAT I for both 17 runways and CAT III for both 35 runways. Runway 11/29 has no precision instrument and can only operate under VFR conditions. Runways 17/35 are therefore the preferred runways, with 17R/35L having been recently expanded from 10,000 ft to 11,890 ft to improve the airports service and capacity. The runway configuration can be seen in Figure 9.

Figure 9 Louisville International Airport Layout and Runway Configuration

In 2007, UPS accounted for 47% of the 53,000 landings at SDF, with Southwest being the next largest operator at 10%. US Airways, American and Delta Air Lines each had approximately 5% of the landing share. However, UPS accounted for 78% of the total landing weight at SDF, with Southwest accounting for only 7%.

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Capacity
Table 7 Runway configurations for SDF (Source: SDF Master Plan) Benchmark Rate Weather Configuration Procedures (per hour) Arrivals only: 82 Arrivals to Runways 35L Visual Meteorological Visual approaches and 35R (North Flow) Departures only: Conditions 78 Visual Meteorological Conditions Arrivals to Runways 17L and 17R (South Flow) Arrivals only: 71 Departures only: 80 Arrivals only: 65 Departures only: 59 Arrivals only: 60 Departures only: 65 N/A

Visual approaches

Instrumental Meteorological Conditions

Arrivals to Runways 35L and 35R (North Flow)

Instrument approaches

Instrumental Meteorological Conditions

Arrivals to Runways 17L and 17R (South Flow) Arrivals to Runways 35L and 35R Departures on Runways 17R and 17L

Instrument approaches

Usual Night Operations

It is interesting to note from Table 7 that runways 17L/35R and 17R/35L operate with different capacities depending on the direction of the flow. When wind is low and northbound, SDFs arrival capacity (from the north) is larger capacity of 82 VFR and 65 IFR compared to 71 VFR and 60 IFR for south flow arrivals. For the same reason, departure capacity is larger in a south-flow. Relative to MEM, SDF is a much smaller airport and UPS faces air-side capacity constraints as it continues to grow its air operation.

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VIII. Memphis International Airport (MEM)

Memphis International Airport (MEM) has the same multi-modal access as SDF. It is located south of Memphis, TN, at the corner of Interstates I-55 and I-240. The location is also served by rail, passing north east of the airport less than one mile from FedEx facilities, and by boat, with the Mississippi River only 8 miles from the airport. Memphis International Airport (MEM) spans 3,900 acres and hosts two major airlines hubs: FedEx for cargo and Northwest for passengers. Just like SDF, MEM has constantly expanded to meet the needs of its largest tenants. A new runway was built in 1996 to increase capacity and the airport has invested in state-of-the-art technology on the airfield including an advanced instrument landing system and new technology to address a multitude of weather conditions.

Figure 10 Local Area around MEM (Google Maps)

In 2005, MEM serviced 3.6 million tons (7.9 billion pounds) of freight and 11.0 million passengers or 5.6 million enplanements (source CY05 ACAIS), making it the worlds busiest cargo airport in the world for the 14th consecutive year8 and the 34th busiest passenger airport in the United States.9 Three carriers account for approximately 60% of total operations at MEM. Both FedEx and Northwest each account for slightly more than 20% of the operations (FedEx also accounts for about 50% of its landed weight), and Northwest Airlink a regional carrier for Northwest accounts for just under 20% of the operations (See Appendix G for NWA presence at MEM).

8 9

Memphis-Shelby County Airport Authority 2006 annual report National Transportation Statistics 2006, Bureau of Transportation Statistics

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Figure 11 Memphis International Airport Layout and Runway Configuration

Runways
The airport is equipped with 4 paved runways. There are three parallel concrete runways that have no displaced threshold and that are positioned around the passenger terminals and one perpendicular asphalt runway to the north, adjacent to the FedEx terminal. The four runways orientations, as well as their lengths and widths, are summarized in Table 8.
Table 8 Basic Runway Data of Memphis International Airport (Source: Memphis International Airport web site)

Orientation 9/27 18R/36L 18C/36C 18L/36R

Length
8,936 ft / 2,724 m 9,319 ft / 2,840 m 11,120 ft / 3,390 m 9,000 ft / 2,743 m

Width
150 ft / 46 m 150 ft / 46 m 150 ft / 46 m 150 ft / 46 m

Separation with 18R/36L

N/A 3,400 ft / 1,036 m 4,400 ft / 1,341 m

Wind Coverage
93.2% 97.2% 97.2% 97.2%

FAA Reference Code

D-IV D-V D-V D-V

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December 14th, 2007 Runway 9/27 provides less wind coverage and less weather coverage than the three other runways. Additionally, it is only certified for CAT I operations whereas the three are also certified for CAT III. Runway 9/27 is more restricted and is listed as FAA Airport Reference Code D-IV. There is not enough separation between the parallel runways to operate them independently, but runways 18R/36L and 18L/36R are certified for simultaneous operations when no movements occur on the center runway. Prior to 1996, runway 18L/36R did not exist and independent arrivals were prohibited on the parallel runways. Building the third runway has increased the capacity of the airport, and MEMs extension of the center runway (the current 18C/36C runway) to 11,100 ft. better accommodates non-stop international flights. MEM operates the runways differently during the day and at night. During the day, when passenger carriers operate, there is no noise issue so planes preferably land on 36L, 36R and 27 and takeoff on runways 36L and 36C. This pattern is not optimal for FedEx whose facilities are north of the airport; aircrafts have to taxi all the way down to the beginning of runways 36 to take off. Actually, the facility has been positioned to optimize taxi time at night when operations have higher time value. At night, FedEx is the only carrier having operations and lands about 150 to 160 aircrafts. All of them land from 10:30 p.m. and all take off after packages are sorted and dispatched. For noiserelated problems (Memphis is located north of the airport), flow is kept south of this airport. Consequently, traffic controllers make FedEx planes land on runways 36 and take off on runways 18 as often as possible. This configuration, besides mitigating noise problems, reduces taxi time to its minimum. More specifically, arrivals are operated as follow: heavy aircrafts land on the longer runway 36C, flights coming from the west land on runway 36L and flights from the east land on 36R10. Departures are operated on the same pattern. Heavy aircrafts use runway 18C, flights heading to the east take off on 18L and flights heading to the west take off on 18R. The main interest of these procedures is it has least paths crossing in the air and on the ground, thus reducing aircraft collisions risks. Runway 27 is used only at the beginning or at the end of the night because its operation makes the airport capacity decrease. It decreases because the runway has lower capacity than the parallel runways, and because when operations are in place on this runway, taxi time is increased by 3 to 4 minutes on overage due to the time FedEx planes have to wait before crossing the runway. This configuration is only used when the airport operates at low capacity to save time and fuel for planes heading to the west or to the north. In addition, MEM has no airport curfew, no noise level limits and no noise surcharges. It should also be noted that Memphis receives approximately 5.7 inches of snowfall per year, which is important to ensure reliable operations.

10

Andrew March, MIT Masters candidate, personal communication with MEM airport manager

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Capacity
Table 9 Frequency of occurrence of weather and runway configuration based on FAA ASPM data for January 2000 to July 2002 (excluding 11-14 September 2001), 7 AM to 10 PM (Source: Memphis International Airport) Benchmark Rate Weather Occurrence Configuration Procedures (per hour) Optimum Rate Ceiling and visibility above minima for visual approaches (5000 ft ceiling and 5 mi visibility) Marginal Rate Below visual approach minima but better than instrument conditions IFR Rate Instrument conditions (ceiling < 1000 ft or visibility , 3.0 miles) 76% Arrivals on Runways 36L, 36R, 27 Departures on 36L, 36C Visual approaches, visual separation 148 181

17%

Arrivals on Runways 36L, 36R, 27 Departures on 36L, 36C

Instrument approaches, visual separation

140 167

7%

Arrivals on Runways 36L, 36R Departures on 36L, 36C

Instrument approaches, radar separation

120 132

Figure 12 Capacity envelope for MEM (Source: Memphis International Airport)

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December 14th, 2007 The MEM capacity envelope is shown above (Figure 12). The airport has no capacity constraints under any weather conditions. In addition, all four runways can operate under CAT I conditions and the three 18/36 runways are certified for CAT III operations. This characteristic is extremely important for FedEx because they can operate under virtually any weather condition. Additionally, MEM has invested $800 million in new facilities. A new control tower is being built, improvements are made to accommodate group VI aircraft (C-5 and A380-800F), but the biggest project under development is Cargo Central, new facilities on the southeast corner of the airport, offering a cargo area of 61,500 square feet, with 1.5 million square feet of ramp area to provide better service for cargo airlines. High security, cold storage, and hazardous materials storage will also be offered, as well as business-friendly lobbies, reception areas, front office administration and management space. This construction phase was triggered when the Tennessee Air National Guard (TnANG), which is currently located near FedEx facilities on the northwest corner of the airport, announced that it will be moving to the new Cargo Central area, freeing 103 acres for FedEx to expand its facilities. The reallocation will improve ground activities for both parties by ensuring TnANGs and FedExs aircraft have better access to the World Runway (18C/36C 11,120 ft runway).

Increasing capacity through landing pattern

MEM has a landing procedure slightly more complicated than that of SDF, largely due to the fourth runway that is mainly used by FedEx. Until April of this year, and under ideal circumstances, traffic controllers allowed landings on the perpendicular runways 27 and 18 at the same time. However, this controversial landing procedure has been recently stopped after two planes nearly collided. This procedure illustrates the efforts made by both MEM and FedEx to push further the capacity limit. Apparently, if the pilot landing on 27 aborts the landing and regains altitude, it flies directly into the path of another plane landing on one of the 18 runways. It was revealed that the procedure violated FAA rules and that MEM never received approval for such the procedure. In reality, MEM traffic controllers implemented this procedure to allow FedEx aircrafts landing on the perpendicular runway and thus minimizing taxi time particularly long for FedEx when arrivals are operated from the north without affecting traffic workload for traffic controllers and to increase capacity of the airport. Interestingly, the FAAs air-traffic officials initially refused to stop the procedure. To sum up, MEM has ample capacity in good weather, can operate under almost any weather condition and continues to invest in new facilities to provide better service for its airlines. It surely makes MEM one of the best airports to operate a cargo hub.

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IX. UPS at SDF and FedEx at MEM

UPS Worldport
Louisville International Airport (SDF) opened UPS main cargo hub and sorting facility in 2002, and has since seen constant expansion to meet the needs of its largest tenant. Worldport is situated on the southern side of the airport, in the area carved out by the airports three runways. Currently, Worldport is comprised of three cargo terminal buildings but is currently undergoing a $1B expansion to add an additional three terminals. Worldport is too large to be air conditioned so its exterior is painted white to reflect sunlight. The inside of the sort facility resembles an indoor roller coaster with miles of conveyor belts and package carts running along tracks. UPS avoids the need for crew members with flares to manually direct pilots in the taxi area. Pilots instead steer the plane to aprons with painted outlines of the airplane. Strategically-placed mirrors on the buildings help pilots navigate the terminal areas.

Figure 13 UPS Worldport at SDF with planned expansion (in orange)

Worldport comprises the largest employment center in Metro Louisville, generating yearly economic impacts of more than 43,000 total jobs and $1.8 billion in total payroll. UPS employs thousands of college students in the U.S. second largest work-study program (after the Reserve Officer Training Corps). UPS pays the full tuition of its student employees attending a local university who are willing to work part-time throughout the year. Students work 3-4 hours per night (scattered between the hours 10pm and 4am) and attend school during the day. It is a difficult schedule for the students but they receive excellent benefits (medical insurance, 401k plan, paid vacations and holidays, etc.) and earn a free undergraduate degree. In 1998, Your Money magazine recognized UPS as having one of the Best Part-Time Jobs in America.

Figure 14 UPS Worldport as seen from the west. Remote aprons are visible on the right.

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December 14th, 2007 Even before UPS $1B upcoming expansion, Worldports sorting complex spans 4 million square feet (92 acres), or 80 football fields. The terminals are equipped with advanced, customizable technology to automate the express package sorting process. According to the UPS website, the original expansion was the largest capital project in the company's 95-year history and increased the hub's sorting capacity to 304,000 packages per hour - or more than 84 packages every second. The UPS website boasts that the completion of the massive hub is just one aspect of UPS's recent expansion of its air network worldwide. In 2002 alone, UPS:11 Opened an intra-Asia air hub in the Philippines, where volume from countries linked to the hub grew by 20 percent during the second quarter of 2002. Completed its Latin America gateway expansion at Miami International Airport, where UPS is the largest air cargo carrier. Announced plans to double the sorting capacity of its Europe air hub in Cologne/Bonn, Germany.

FedEx Super Hub

Memphis is not only FedEx Super Hub, but is also the location of the headquarters for FedEx Corporation, FedEx Express, FedEx Freight and FedEx Trade Networks. The company is constantly searching new ways to improve its service, with faster sorting, better information on packages locations, and by increasing capacity with higher technology that allows reducing separations between aircraft. FedEx Express alone pumps more than $1 billion every year into research. As a result, FedEx utilizes a state of the art sorting facility and air traffic management system. It permits FedEx Express to serve 95% of the global economy on a 24- to 48-hour basis. In addition to its own service, FedEx and the United States Postal Service (USPS) signed an agreement in 2001 that contracts FedEx to carry approximately 3.5 million pounds of mail each day equivalent of about 30 widebody DC-10s in the U.S. alone! FedEx facility covers approximately 500 acres at MEM, and will reach 600 acres in 2009. It has a five-mile perimeter and parking slots for 175 aircrafts. It operates 24 hours a day, 7 days a week, 365 days a year, and employs more than 15,000 persons. There are four daily sorts, plus an important night sort between 10:30 p.m. and 2 a.m. that allows next day deliveries. Over 8,000 employees work during the day and 4,000 during the night. These sorts bring an average of 3.3 million packages through the facility every day.

United Parcel Service 2002 Press Releases, UPS Completes Seven-Year, US$1B Expansion of Air Hub. September 27, 2002.

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Figure 15 Views of FedEx Super Hub facilities in MEM, remote aprons are visible on the left

Operations
Operations for both carriers are extremely similar as both have leaned out their processes and have reached maximum levels of efficiency. Each carrier makes operational improvements based on industry best-practices, and so the following illustration applies to both carriers. Every night, starting at 10:30 p.m., 100 UPS aircraft and 150-160 FedEx aircraft arrive at their respective hubs from points all over the world. On average, one aircraft lands every 90s. Following touchdown, every minute is precious. As soon as the aircraft gets clearance from the air traffic control, UPS and FedEx ramp controllers lead pilots to the gate using color-coded screens that track arrival times for arriving planes. As soon as the engines are stopped, maintenance and service crews go to work on aircraft while unloading teams bring containers into the sort facility. In order to maintain the highest productivity levels, assignment of these crews is done through handheld computers. This computerized system makes possible rapid assignments and rapid communications between the center and the workers. At FedEx, 53 teams of 16 people unload the planes, each team unloading an average of 3 planes per night. After UPS $1B expansion, crews will be responsible for servicing aircraft at Worldports 70 terminal gates and 40 remote aprons.

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Figure 16 Freight unloading at FedExs SuperHub. Crews operate 24/7 to meet the time-sensitive demand.

Figure 17 Cargo Containers nicknamed igloos fit perfectly into the jets cabins (left). Worldports 170 miles of conveyors are three-tiered to maximize the height of the sorting buildings (right).

The typical window-times to unload an airplane range from 18 minutes for a 727 containing 9 to 12 containers, to 33 minutes for larger aircraft (B747-200F or A310-200) with 50 containers. Crews are held accountable for meeting the required unload/load times, and in case of a 1-minute delay over the schedule, the senior manager must explain the reason at a daily 5am meeting. Once the containers are off the plane, they are transferred to the input area by one or two workers. In this area, workers unload the containers and place the packages on the conveyor belt. The containers have been recently redesigned. They are clear so workers unload them more easily by knowing how many packages are left and load them more easily because they can better adjust positions of the packages to balance weight and center-of-gravity. Both carriers use similar containers. Once the packages are on the conveyor belt, they are measured, weighed, scanned and finally sorted depending on their final destination using the best technology to date. The conveyor belt system is an incredible technology that sorts packages with incredible speed. At Worldport, packages move through 122 miles of high-speed conveyors in as little as eight minutes. The maze of conveyors are synchronized by a sophisticated system of cameras and lasers that read the detailed information encoded in UPS "smart labels." The information scanned off each package triggers a network of computer-activated sorting and tracking devices that process 59 million database transactions every

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December 14th, 2007 hour. The entire operation is expandable to accommodate up to 500,000 packages each hour, or 140 each second, during peak periods. FedExs system can sort 325,000 letters and 160,000 packages (whose weight is less than 75 pounds) per hour.

Figure 18 Crew moving containers on floors lined with ball bearings, which are far enough apart to allow for workers to walk safely along the floor.

Figure 19: Scanning of the packages (left) at the start of 300 miles of conveyor belts (right) which move packages through FedEx hub in under 15 minutes

Shortly after 2am, the sorting is finished and the first aircraft depart for East Coast or European destinations. At 3:30am, all aircraft are en route to their destinations. At 5am, there is a debriefing meeting to discuss the problems encountered during the night sort, after which corrections are made for the next day.

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Figure 20 UPS Global Operations Center oversees aircraft, weather, news and contingency planning (left). UPS is in the process of replacing its older aircraft to benefit from fuel and operational efficiencies (right).

The Network
Memphis International Airport is the worlds busiest airport. FedEx hub connects MEM to more than 220 countries and territories on six continents. MEM serves every international market FedEx Express serves, with approximately 1,250 flights per week landing at MEM. By contrast, UPS's current air operations serve 200 countries and territories on six continents. Domestically, however, UPS leads with guaranteed Next Day Early A.M service, which promises delivery by 8 a.m., reaches 11,670 ZIP codes in the U.S., almost 60 percent more than any other express carrier.12 FedEx network has evolved in recent few years. Years ago, all was centralized in MEM, so that a package traveling from New York City to Schenectady went through the Super Hub. Nowadays, smaller hubs are in place throughout the world that permit bypassing MEM. As a result, a package going from the East Coast to the East Coast will never leave the East Coast. This new network makes fuel savings and reduces congestion and workload at the Memphis facility. This trend towards small hubs is increasing at UPS as well. UPS opened its intra-Asia hub in the Philippines, Latin American hub at Miami and its European hub in Cologne to realize the same savings as FedEx.

UPS and FedEx Fleets

UPS flies 2.3 million packages and documents per day across the globe and holds that at least one of UPS 277 jet aircraft (8th largest airline in the world)13 is in the sky at any given time. UPS also charters 326 aircraft (including smaller non-jet aircraft) to meet its service needs. In total, UPS flies over 1,000 flight segments each day. We note that FedEx includes small aircraft in its fleet count, whereas UPS smallest aircraft (of the 277) is the B757-200 freighter variant. UPS maintains thirteen aircraft and crews on standby around the world as hot spares to replace any aircraft that are suddenly out of service.

United Parcel Service 2002 Press Releases, UPS Completes Seven-Year, US$1B Expansion of Air Hub. September 27, 2002. 13 Louisville Regional Airport Authority, Louisville International Ranked 3rd Busiest Cargo Airport in North America; th 9 in the World. August 6, 2007.

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December 14th, 2007 By contrast, FedEx flies 3.5 million packages per day across the globe and holds the biggest fleet of aircraft in the world. It owns 370 jet aircraft, plus 297 small regional aircraft (Cessna + Fokker). As of December 2007, the two airlines jet fleets are broken down as follows:
Table 10 UPS and FedEx Fleets, current as of Dec. 2007 (Source: fedex.com and ups.com)

UPS FedEx* 16 92 B727-100/200 46 DC-8 75 4 B757-200 32 (27 on order) B767-300ER 53 63 A300-600 66 A310-200 B747-100/200/400 13 (11 on order) 87 MD-10 38 (3 on order) 58 MD-11 TOTAL 273 370
*In addition, FedEx has ordered 15 new Boeing 777 Freighters.

X. Technology
UPS and FedEx have been two of the leaders in the development of ground and cockpit systems, such as Automatic Dependent Surveillance Broadcast (ADS-B), GPS Local Area Augmentation System (LAAS), cockpit Moving Map and other cutting edge technologies. Many pilot programs have been sponsored by the FAA since UPS and FedEx, as virtually solitary operators during the night, are perfect real-world testbed for technology development. ADS-B and the UPS Fleet UPS has been at the forefront of cargo carriers making use of a GPS-based surveillance and navigation aid known as Automatic Dependent Surveillance-Broadcast (ADS-B). ADS-B is a device which plots on an electronic dashboard map all aircraft (and even ground vehicles) in the surrounding region which are also equipped with ADS-B. ADS-B enables increased capacity and efficiency by supporting reduced aircraft spacing, enhanced visual approaches and free flight while also increasing safety with improved visual acquisition in the air and on the ground, as well as the provision of graphical weather data to the cockpit. ADS-B units [automatically] broadcast the position and intent information of an equipped aircraft with a signal that is received by all other ADS-B equipped aircraft. Unfortunately, without a supplemental technology known as Traffic Information Services Broadcast (TIS-B), only aircraft equipped with ADS-B show up on others maps. Therefore the benefit is only achieved at near 100% equipage so that a pilot has confidence in what is around the aircraft.

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December 14th, 2007 UPS entire fleet is equipped with ADS-B, which provides each arriving or departing aircraft with a complete picture of the terminal airspace (since the airline is effectively the lone night-time operator). Similarly, FedEx has participated in the development of ADS-B technology in partnership with the FAA.

Figure 21 Arrival Departure Curve Estimates for SDF showing Increased Capacity potentially available with the Increased Surveillance Accuracy and Situational Awareness provided by ADS-B (Source: Dr. George Donohue, et al, George Mason University. October 24, 2001)

UPS has used ADS-B to merge and space arriving and departing aircraft to a more manageable flow. Since UPS brings in 100 aircraft in less than two hours, the required spacing is at an FAAallowed minimum. ADS-B trained pilots are able to self-space to ensure no time is lost between arriving aircraft. UPS has realized a host of cost savings in time and fuel summarized in a study conducted by George Mason University. The GMU research team calculated the above arrival departure curve using the following fleet mix:

Figure 22 Fleet Mix assumptions used in ADS-B simulations (Source: Dr. George Donohue, et al, George Mason University. October 24, 2001)

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Figure 23 Cash Flow and NPV Benefit resulting from the addition of ADS-B to UPS entire fleet (Source: Dr. George Donohue, et al, George Mason University. October 24, 2001)

The analysis conducted at GMU was aimed at determining how improved surveillance and situational awareness can benefit air cargo airport capacity and operational performance.14 The analysis indicated that the primary benefit (measured in NPV and cash flow) is in the increased time flexibility in schedule planning. Depending upon the set of assumptions captured in the various cases, an airline would benefit from a net-positive NPV in the second year of ADS-B usage.14 One additional benefit of employing surveillance aid devices such as ADS-B is the ability for equipped aircraft to execute Continuous Descent Approaches (CDAs), a procedure designed to reduce fuel burn and noise. Pilots execute this procedure descend during final approach at a constant angle of three degrees until the aircraft has entered the Instrument Landing System. CDAs avoid pilots needing to thrust up when they reach each altitude step during descent. Instead, they are able to idle to landing, reducing noise and fuel burn. The following is a depiction of a CDA at Louisville International:

14

Donohue, George et al. Potential Net Present Value for a Cargo Airline Investment in ADS-B Avionics Equipment: A Preliminary Analysis. George Mason University, October 24, 2001.

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Figure 24 Continuous Descent Approach at Louisville International Airport 10/2002 (Source: Professor John Paul Clarke research group at MIT, Joint University Program Meeting 10/23/2003)

The savings in noise, fuel and flight time resulting from the execution of CDAs were analyzed in a study by UPS Airlines Captain Bob Hilb, results summarized here:

Figure 25 Noise Impact, Fuel and Time Savings of Continuous Descent Approaches at SDF (Source: Captain Bob Hilb, UPS Airlines. July 22, 2005)

Because the benefits of ADS-B and its associated applications are only realized with near-full equipage, both FedEx and UPS, as virtually solitary operators during the night, are perfect leaders in the development of this technology.

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XI. Conclusions
The worlds two largest integrated carriers, UPS and FedEx, operate their central air hubs very similar to one another. UPS Worldport in Louisville (SDF) and FedExs Super Hub in Memphis (MEM) have evolved rapidly over the past decade as technology has improved and operations have become lean. While the case study has exposed a few land-side operations which differ between the two carriers, the biggest takeaway is the vast differentiation between cargo and passenger hubs. The main differences between UPS and FedEx relate to their use of technology and their relationships with their hub airports. Whereas both companies have been developing ADS-B in partnership with the FAA, currently only UPS has this system installed on all of its aircraft and can thus reduce separation times for landings. In addition, UPS appears to have a stronger relationship with SDF due to its dominant role at the airport. UPS is the largest airline at SDF with 47% of operations with the next largest operating only 10%. In Memphis, Norwest operates twice the number of flights relative to FedEx. We must make clear, however, that this is a relative advantage and that both UPS and FedEx provide significant economic advantage to SDF and MEM and therefore work closely with the airports. The biggest takeaway from this case study is the differences between passenger and cargo airline operation of hubs. These differences are a result of dissimilar networks and time operations. For example, passenger carriers prefer locations with strong O-D demand whereas cargo carriers prefer smaller population densities (which tend to be more amenable to night-time operations). In addition, cargo carriers do not require the architecturally pleasing terminals that travelers prefer. And cargo carriers can route packages through whichever itinerary is the most cost effective for the network, since packages care very little about multiple connections. Over the past ten years, the growth in demand for cargo has exceeded that of passenger carriers. The cargo business is in growth mode, and it is forecasted to continue over the next ten years, as was discussed in Section II. As Boeing forecasts, however, much of this growth is occurring outside the U.S., so UPS and FedEx are rapidly adjusting their network to capture the new revenue opportunities.

Figure 26 Air Freight Growth by Major Market (Source: Boeing World Air Cargo Forecast, 2006/2007)

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Figure 27 2006 Global Top 20 Cargo Airlines Revenue Growth (Data Source: Airline Business Cargo Rankings 2006, November 2007)

FedEx and UPS are currently amongst the largest players globally, but both are well below the average growth rate in the industry, as seen in Figure 28.

Figure 28 2006 Global Top 20 Cargo Airlines Revenue Growth (Data Source: Airline Business Cargo Rankings 2006, November 2007)

Since UPS and FedEx are the leaders in freight delivery efficiency and logistics management, they have developed a domain expertise that can be leveraged in other parts of the world. To capture the growth in Asia, both carriers are increasing their hub presence in the region. However, both carriers need to ensure that they acquire the resources and air service rights necessary to capture it. UPS and FedEx also need to adapt their services to fit the market demands price-elasticity over time-sensitivity. The two carriers must position themselves to compete against the countless number of low-cost charter carriers emerging in the region. It seems that in the coming decade, UPS and FedEx will face more serious competition overseas than from the next state over.

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Appendix A: 2006 Cargo Airport Rankings

Source: Airports Council International

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Appendix B: UPS Air Cargo Airports

U.S. AIRPORTS
CODE ABQ ABY ALB ANC ATL AUS BDL BFI BFM BHM BIL BNA BOI BOS BUF BWI CAE CID CLE CLT CVG DAY DEC DEN DFW DSM DTW ELP EWR FAT FLL FSD FWA CITY ALBUQUERQUE ALBANY(GA) ALBANY(NY) ANCHORAGE ATLANTA AUSTIN HARTFORD SEATTLE MOBILE BIRMINGHAM BILLINGS NASHVILLE BOISE BOSTON BUFFALO BALTIMORE COLUMBIA CEDAR RAPIDS CLEVELAND CHARLOTTE CINCINNATI DAYTON DECATUR DENVER DALLAS / FT. WORTH DES MOINES DETROIT EL PASO NEWARK FRESNO FT. LAUDERDALE SIOUX FALLS FORT WAYNE CODE GEG GSO GSP HNL HRL HSV IAD IAH ICT IND JAN JAX JFK KOA LAN LAS LAX LCK LGB LIT LRD MCI MCO MDT MEM MHR MHT MIA MKE MSP MSY OAK OGG CITY SPOKANE GREENSBORO GREENVILLE HONOLULU HARLINGEN HUNTSVILLE WASHINGTON-DULLES HOUSTON WICHITA INDIANAPOLIS JACKSON JACKSONVILLE NEW YORK KONA LANSING LAS VEGAS LOS ANGELES COLUMBUS LONG BEACH LITTLE ROCK LAREDO KANSAS CITY ORLANDO HARRISBURG MEMPHIS SACRAMENTO MANCHESTER MIAMI MILWAUKEE MINNEAPOLIS NEW ORLEANS OAKLAND MAUI CODE OKC OMA ONT ORD ORF PDX PHL PHX PIA PIE PIT PVD RDU RFD RIC RNO ROA RSW SAN SAT SBN SDF SGF SHV SJC SJU SLC STL SWF SYR TUL TUS TYS CITY OKLAHOMA CITY OMAHA ONTARIO CHICAGO NORFOLK PORTLAND PHILADELPHIA PHOENIX PEORIA ST. PETERSBURG PITTSBURGH PROVIDENCE RALEIGH ROCKFORD RICHMOND RENO ROANOKE FORT MYERS SAN DIEGO SAN ANTONIO SOUTH BEND LOUISVILLE SPRINGFIELD SHREVEPORT SAN JOSE SAN JUAN SALT LAKE CITY ST. LOUIS NEWBURGH SYRACUSE TULSA TUCSON KNOXVILLE

INTERNATIONAL AIRPORTS
CODE CITY, COUNTRY CODE CITY, COUNTRY CODE CITY, COUNTRY

ABZ AMS ARN ATH AUH

ABERDEEN, UNITED KINGDOM AMSTERDAM, NETHERLANDS STOCKHOLM, SWEDEN ATHENS, GREECE ABU DHABI,

GDL GLA GUA GYE HAJ

GUADALAJARA, MEXICO GLASGOW, UNITED KINGDOM GUATEMALA CITY, GUATEMALA GUAYAQUIL, ECUADOR HANNOVER,

PEK PEN PIK PLH PTY

BEIJING, CHINA PENANG, MALAYSIA PRESTWICK, UNITED KINGDOM PLYMOUTH, UNITED KINGDOM PANAMA CITY,

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UNITED ARAB EMIRATES BARCELONA, SPAIN BERGAMO, ITALY BIRMINGHAM, UNITED KINGDOM BANGKOK, THAILAND BOLOGNA, ITALY BOGOTA, COLOMBIA BOURNEMOUTH, UNITED KINGDOM BOMBAY, INDIA BREMEN, GERMANY BRISTOL, UNITED KINGDOM BRUSSELS, BELGIUM BUDAPEST, HUNGARY GUANGZHOU, CHINA PARIS, FRANCE CEBU, PHILIPPINES COLOGNE, GERMANY ROME, ITALY COPENHAGEN, DENMARK PAMPANGA, PHILIPPINES CHIHUAHUA, MEXICO CARDIFF, UNITED KINGDOM DRESDEN, GERMANY DORTMUND, GERMANY DUBLIN, IRELAND DUESSELDORF, GERMANY DUBAI, UNITED ARAB EMIRATES EDINBURGH, UNITED KINGDOM EAST MIDLANDS, UNITED KINGDOM EXETER, UNITED KINGDOM BUENOS AIRES, ARGENTINA MUENSTER, GERMANY FRANKFURT, GERMANY GERMANY HAMBURG, GERMANY HELSINKI, FINLAND HAHN, GERMANY HONG KONG, CHINA INCHON, SOUTH KOREA ISTANBUL, TURKEY KEFLAVIK (REYKJAVIK), ICELAND OSAKA, JAPAN KUALA LUMPUR, MALAYSIA LEEDS/BRADFORD, UNITED KINGDOM LEIPZIG, GERMANY LONDON (GATWICK), UNITED KINGDOM LONDON (HEATHROW), UNITED KINGDOM LISBON, PORTUGAL LIVERPOOL, UNITED KINGDOM LONDON (LUTON), UNITED KINGDOM LUXEMBOURG, LUXEMBOURG LYON, FRANCE MADRID, SPAIN MANCHESTER, UNITED KINGDOM MELBOURNE, AUSTRALIA MEXICO CITY, MEXICO MANAGUA, NICARAGUA MALMO, SWEDEN MANILA, PHILIPPINES MONTERREY, MEXICO MUNICH, GERMANY NEWCASTLE, UNITED KINGDOM NAGOYA, JAPAN NARITA, JAPAN NUREMBERG, GERMANY PORTO, PORTUGAL OSLO, NORWAY

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PANAMA SHANGHAI, CHINA SAN SALVADOR, EL SALVADOR SAN PEDRO SULA, HONDURAS SANTO DOMINGO, DOMINICAN REPUBLIC SHARJAH, UNITED ARAB EMIRATES SINGAPORE, SINGAPORE SAN JOSE, COSTA RICA SHANNON, IRELAND STANSTED, GREAT BRITAIN STUTTGART, GERMANY SYDNEY, AUSTRALIA SHENZHEN, CHINA QINGDAO, CHINA TEGUCIGALPA, HONDURAS TOULOUSE, FRANCE TEL AVIV, ISRAEL TAIPEI, TAIWAN TREVISO, ITALY BERLIN (TEGEL), GERMANY QUITO, ECUADOR VIRACOPOS, BRAZIL VIENNA, AUSTRIA VALENCIA, SPAIN WARSAW, POLAND EDMONTON (ALBERTA), CANADA HAMILTON (ONTARIO), CANADA MONTREAL (QUEBEC), CANADA OTTAWA (ONTARIO), CANADA MONTREAL (DORVALQUEBEC), CANADA VANCOUVER (BRITISH COLUMBIA), CANADA WINNIPEG (MANITOBA), CANADA CALGARY (ONTARIO), CANADA TORONTO (ONTARIO), CANADA

BCN BGY BHX BKK BLQ BOG BOH BOM BRE BRS BRU BUD CAN CDG CEB CGN CIA CPH CRK CUU CWL DRS DTM DUB DUS DXB EDI EMA EXT EZE FMO FRA

HAM HEL HHN HKG ICN IST KEF KIX KUL LBA LEJ LGW LHR LIS LPL LTN LUX LYS MAD MAN MEL MEX MGA MMX MNL MTY MUC NCL NGO NRT NUE OPO OSL

PVG SAL SAP SDQ SHJ SIN SJO SNN STN STR SYD SZX TAO TGU TLS TLV TPE TSF TXL UIO VCP VIE VLC WAW YEG YHM YMX YOW YUL YVR YWG YYC YYZ

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Appendix C: Examples of UPS Aircraft Configurations and Containers

(Source: www.ups.com/aircargo)

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Appendix D: SDF Airport Improvements, 2007-2008

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Airport Improvements (Source: Louisville Regional Airport Authority)

Louisville International Airport serves as the region's economic engine. Some of the key current and future projects are:

Terminal and Facility Improvements

In-Line Baggage Screening
Projects in the second phase of terminal improvements include two in-line baggage screening buildings that will permit the large scanning equipment in front of the ticket counters to be removed. Baggage screening will then occur within the buildings immediately behind the terminal. When complete, travelers will check their bags curbside or at the counter as they did prior to 9/11.

Rental Car Lot Improvements

To improve its rental-car facilities, the Authority will construct improvements for the 'quick-turn' facility next to the terminal. The former catering kitchen will be demolished and rental-car parking spaces will be added. In addition, lighting in the area will be improved. The project will begin in June and should be complete in fall 2007.

Airfield Improvements
Taxiway Alpha ("A")
Construction of Phase I (south end) of Taxiway "A" began in the spring of 2007. This taxiway, which will parallel the West Runway (17R/35L), will allow Louisville International to accommodate larger, Group VI aircraft. This multi-year project will allow Louisville International to accommodate current airport growth needs and help secure the community's economic future by constructing infrastructure to retain and attract aviation-related companies and jobs.

Airfield Lighting (Phase II)

The Authority has completed the second phase of its project to replace existing taxiway-edge lights with brighter, Light Emitting Diode (LED) light fixtures. Phase II installed the LED lights on Taxiways "C","D" and "G." In the future, the Authority plans to install LED light fixtures along all taxiways at Louisville International. LED light fixtures are brighter-and more energy efficient.

Airfield Pavement Repairs and Markings

Each year, the Authority identifies pavement -repair projects that maintain the Authority's infrastructure investment. This year, the airfield-pavement project includes replacing select concrete slabs on the East Runway (17L-35R), milling and replacing asphalt on the shoulders along the West Runway (17R-35L) and upgrading the 'hold lines' and intersecting taxiway lines to meet the new FAA standard, effect January 2008. Construction will continue through the summer of 2007.

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Appendix E: MEM Airport Improvements, 2007-2013

Source: Memphis International Airport
Weather Scenario Configuration
Arrivals on Runways 36L, 36R, 27 Departures on 36L, 36C Frequency of Use: 55% in Optimum conditions

Procedures

Benchmark Rate (per hour)

Optimum Rate

Today

148-181

Ceiling and visibility above minima for visual New Runway approaches (5000 ft ceiling and 5 mi visibility) Occurrence: 76% Planned improvements (2013)

N/A

Visual approaches, visual separation

N/A

Same

191

Marginal Rate

Today

Arrivals on Runways 36L, 36R, 27 Departures on 36L, 36C Frequency of Use: 50% in Marginal conditions

140-167
Instrument approaches, visual separation

Below visual approach minima but better than instrument conditions

New Runway

N/A

N/A

Occurrence: 17%

Planned improvements (2013)

Same

Visual approaches, visual separation

190

IFR Rate

Today

Arrivals on Runways 36L, 36R Departures on 36L, 36C Frequency of Use: 59% in IFR conditions

120-132
Instrument approaches, radar separation

Instrument conditions (ceiling < 1000 ft or visibility < 3.0 miles)

New Runway

N/A

N/A

Occurrence: 7%

Planned improvements (2013)

Same

125

NOTE: Data on frequency of occurrence of weather and runway configuration usage is based on FAA ASPM data for January 2000 to July 2002 (excluding 11-14 September 2001), 7 AM to 10 PM local time.

Planned Improvements at MEM include: CEFR, for reduced in-trail separations between arrivals in Marginal conditions. Advanced TMA/RNAV, to improve delivery accuracy and help MEM consistently utilize available capacity.

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Appendix F: MEM Airport Diagram

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Appendix G: Presence of Northwest Airlines at MEM

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