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| Title: | Economic Feasibility of an Air Cargo Handling Facility at Fargo, North Dakota |
| Authors: | Golz, Theresa K.
Golz, Joel T.
Koo, Won W. |
| Authors (Email): | Koo, Won W. (won.koo@ndsu.edu) |
| Issue Date: | 1992-04 |
| Series/Report no.: | Agricultural Economics Miscellaneous Report
161 |
| Abstract: | Exports to Taiwan in 1990 via air freight were approximately
$2.9 billion, and imports via air freight to the united States
were $3.1 billion. Total U.S. exports/imports to/from Taiwan in
1990 were $11.5 billion and $22.7 billion, respectively. China
Airlines operates three air cargo hubs in the united States: New
York, Los Angeles, and Dallas.
The real per capita Gross National Product (GNP) in Taiwan
for 1989 was $7,512, up from $3,297 in 1985. This implies that
the Taiwanese economy is one of the fastest growing economies in
Asia. Trade volume between the united States and Taiwan has
increased substantially over the last 10 years and is predicted
to grow in the future.
The objective of this study is to evaluate the economic
feasibility of Fargo, North Dakota, as an air cargo handling
facility for products shipped to (from) Taiwan.
Two static transshipment models were used to determine the
economic feasibility of an air cargo hub being located at Fargo.
Both transshipment models minimized trucking costs of cargo from
(to) customs districts to (from) air cargo hubs and air cargo
costs from (to) hubs to (from) Taiwan for exports and imports.
Total savings and market shares for both export and import
models are presented by evaluating the feasibility of an air
cargo hub at Fargo. The model, excluding Fargo as a cargo hub,
results in $47 million in exports and $1.7 million in imports.
Including Fargo as a cargo hub at the New York rate saves $2.73
million; at the Dallas rate, $2.84 million; and at the Los
Angeles rate, $3.08 million. Fargo's market share is 11.8% for
exports and 14.8% for imports. Fargo gains its entire market
share for both exports and imports from New York for all models.
In conclusion, this study indicates Fargo has a logistical
advantage over New York and Dallas in shipping and receiving air
cargo between Taiwan and Northern Plains states (Minnesota,
Illinois, and Montana). This does not necessarily mean it would
be economically feasible to place an air cargo hub at Fargo. In
addition to logistics, economic feasibility depends on investment
and operating costs, and a volume large enough to minimize per
unit operating costs through economies of scale.
v |
| URI: | http://purl.umn.edu/51193 |
| Institution/Association: | North Dakota State University>Department of Agribusiness and Applied Economics>Agricultural Economics Miscellaneous Reports |
| Total Pages: | 23 |
| Collections: | Agricultural Economics Miscellaneous Reports
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| No.161.pdf | | 921Kb | PDF | View/Open |
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