01/29/2021

The Lane Report / Greg Paeth / January 8, 2021

It’s a pretty good bet that 2021 will prove to be an extraordinary year for the tightly intertwined logistics and transportation industries in Northern Kentucky. That’s saying quite a bit in the wake of 2020, which will be cemented in our memories as the year that COVID-19 wreaked havoc on just about every aspect of our lives. Consider three vitally important stories that are expected to unfold this year:

• Amazon, the million-ton gorilla of online retailing, is expected to open the first phase of its $1.5 billion air hub and distribution center in Northern Kentucky sometime before the 2021 holiday season. The company said it will create some 2,000 jobs once the entire facility is up and running on property owned by the Cincinnati/Northern Kentucky International Airport (CVG), where Amazon is expected to handle 64 flights every day.

• Repairs have been made to the Brent Spence Bridge, which was damaged in November by a fiery tractor-trailer collision. The bridge carries 160,000 cars per day – and it was designed to carry just 80,000. It is also one of the busiest trucking routes in the United States, with freight equaling 3% of the nation’s gross domestic product crossing the bridge each year. Northern Kentucky officials have long been advocating for funding to upgrade the bridge, which originally opened in 1963. Officials hope the crash and shutdown, which lasted nearly six weeks, will shine the light once again on the need to upgrade the critically important north-south truck route – one of the reasons why Kentucky has established itself as a logistics mecca for the country.

• For the first time in 20 years, the Transit Authority of Northern Kentucky – the TANK bus system – will introduce what it calls a substantial “redesign” of its services as it eliminates six routes and begins to concentrate its efforts in high-population areas along existing routes. The move is designed to counter a decline in ridership in the region and elsewhere in the country that has been caused, in part, by low gas prices.

As the potential impact of these topics indicates, 2021 may present an unsettling blend of good news and bad for everyone who’s immersed in logistics and transportation in the Cincinnati/Northern Kentucky metropolitan region, where it’s estimated that more than 106,000 people work in those broadly defined categories. Of those, some 30,000 workers make their homes in Boone, Campbell and Kenton counties, according to Northern Kentucky Tri-County Economic Development Corp. (Tri-ED), which focuses on economic development in three counties that have a combined population of about 385,000.

In her job as the CEO of CVG, Candace McGraw had a free front-row seat for the complete spectrum of pandemic-related news.

At one level, the airport and most of its employees managed to avoid skyrocketing infection rates that crippled some businesses, said McGraw, who oversees an institution that is said to have an annual economic impact of $6.8 billion and 14,500 “badged employees” who work for the airport or other companies located on airport property.

Despite becoming only the third airport in the country to receive a COVID-related “Airport Health Accreditation” from an international trade association in mid-September, passengers stayed away and numbers declined dramatically throughout 2020.

“With the pandemic, our passenger levels are down, of course, but compared with all airports throughout the country, we’re tracking – thankfully – slightly above the national level for airports our size. So we will likely finish this year with about 35% of the passengers we had in 2019, and that’s faring better than some of my airport colleagues,” McGraw said.
For 2019, the airport reported 9.1 million passengers.

As the COVID-19 crisis worsened late in the year, McGraw made it clear that CVG and the airline industry don’t expect an immediate bounce back. For 2021, passenger levels are projected at 50% of the 2019 total, McGraw said.

“For 2021, our budget is projecting that we’ll be at about 50% of the 2019 passenger levels,” said McGraw, who noted that airfares now rank 92nd in the country with an average of $215, according to the U.S. Department of Transportation.

She also said that because of COVID-19, “cargo is booming.”

“Throughout the pandemic, cargo is operating at (Christmas) holiday volumes and continues to do so,” said McGraw. In mid-November, she said, shipments were up 13.5% over last year, which had been a record year for the seventh-largest cargo airport in the country. “Cargo continues to be the bright spot. E-commerce has been accelerated by this pandemic.”