AUSTIN - the New Commercial Center in the USA?

CargoForwarder Global reported in its May 7th news line on IAG Cargo’s new route from London Heathrow to Austin Texas using a British Airways Boeing 787 “Dreamliner” aircraft.
On this trip, CFG had the opportunity for a closer look at what’s going on in Austin and the surrounding area, as well as the Texan States’ plans for expanding business in the area.

BA deploys a 787 Dreamliner on the Austin route  /  Source: BA
BA deploys a 787 Dreamliner on the Austin route / Source: BA

The Austin Chamber of Commerce aim is to gear up the city even further as one of the main production and export areas within the United States of America.


Ben Ramirez, International Economic Development Manager for the city of Austin and Ray Brimble, CEO of the Lynxs Group took us on an interesting presentation of their city’s plans.
Austin, the state capital, is not a large city by normal Texan standards. Certainly not when compared to the bigger sister cities of Dallas and Houston. However, the inhabitants and city fathers are proud of what they call “a vibrant economy.”
They place it as the most strategic in the “Texan Triangle,” the eleventh largest in the U.S. and made up of five different counties with a total of 4,200 square miles.
On top of this they claim to be proud of the fact that they are listed by Forbes’ as being the fastest growing city in the U.S., the best for job seekers and the number one performing city in the U.S.
The population of the Austin Metropolitan Area has grown fast from just over a half a million inhabitants in the 1980s to today’s 1.9 million. No small wonder that they were also ranked in the listing of the most highly dynamic cities as number seven worldwide on the City Momentum Index.

So what do they do with all this success, these people and the space?
A large part of the success is attributed to the so called “High-Tech” business.
Not unrealistic when one considers that the city tops the list of U.S. Metros with its large number of high-tech immigrant entrepreneurs. Over 24% of these are highly educated immigrants from all over the world seeking their fortunes in this vibrant economy.
Over 41% of the population over 25 years of age holds a bachelor degree and the average age is a very low 33 years.
Successful technical companies such as Testlio and iTexico were founded by such immigrants who moved into the city for the Techstars program.
The list of companies who are seen as major employers is very long and includes such names as Dell, IBM, 3M, freescale, AMD, Samsung and so on.

The local Chamber of Commerce refers to this as a “Tech Cluster Development,” which in essence means a simple start-up in the 1960s with IBM and Texas Instruments, leading to the present location of almost 40 companies involved in the research, planning and development of high-tech computer related products which are exported worldwide.
Added to this list are a varied collection of other industries from Life Sciences, Medical Devices, Clean Technologies, Creative & Digital Media and Data Management.

Where does all this production end up then?
Up until now, most foreign air cargo export shipments had to be trucked either to Dallas or Houston airports for uplift as well as to airports further north such as New York or Chicago.
A long way for highly delicate and time sensitive products.
Austin (as reported in CFG May 7th) got its first international air link with the BA daily service to and from London. The city managers hope it will not stop there as they intend to promote the airfreight uplift as much as possible in the future.
The airport is certainly geographically ideally placed, has enough space for the expansion and building of cargo facilities and a never ending runway which is capable of taking any of today’s large freighter aircraft.
U.S. integrators, Fedex, UPS and Deutsche Post’s DHL Express are regular visitors.

Semiconductors, telecommunication devices, computers and many other items to the value of more than US$45 bn were shipped from Texas in 2012, with the Austin area alone bringing in US$ 9 bn and whereby 2013 figures and the 2014 prognosis show even higher numbers.
Texans claims to have surpassed California in technical exports and are not willing to give up this number one position.

 

British Airways decision to add Austin to its network is heralded there as “coming in at the right time.” There are over 40 UK companies having operations in the Austin Metro area. This ensures a steady flow of business passengers on these flights as well as starting to cater for exports from Austin to the UK.

The investment in facilities and technology is enormous.
A visit to “freescale,” which was formerly a Motorola daughter company and who produce semiconductors for almost any industry from automotive to cell phones showed us just how cost intensive this business is.
Erecting a plant to develop and produce conductors and other parts costs between US$7-9 billion.
Yes “billion.”


Why then such cost? - Simply because the working areas are 100% sterile, need constant maintenance update and the equipment necessary for the production of these “chips”, which we today all take for granted, is very expensive.
The finished product has its final “check-up” in the Far East. Mainly Korea or Japan. This almost all moves by airfreight from various U.S. gateways.

It is then easy to see why the Austin Chamber of Commerce would dearly like to see their airport online for other carriers as well and particularly freight operators.
They are doing their homework and we’ll see how this develops in the next couple of years.

John Mc Donagh



Write a comment

Comments: 3
  • #1

    Ray Brimble (Tuesday, 20 May 2014 11:34)

    John, it was great to reconnect with you again after all of these years, and also fun to read your article. You are quite the stylish writer! I hope Austin is on the map for you now, and perhaps we will see you again in these parts someday in the not-to-distant future. Please also give my regards to Stan and Jack next time you see them.
    All the Best!
    Ray
    Ray Brimble, CEO Lynxs

  • #2

    Ben Ramirez (Tuesday, 20 May 2014 11:36)


    Dear John,

    Thank you for sending this along. I enjoyed the articles!

    Cheers,

    Ben Ramirez
    ‎International Economic Development Manager for the City of Austin

  • #3

    Shona Inglis (Thursday, 22 May 2014 12:39)

    Hi John,

    Hope all is well.
    This is a great piece and many thanks for sharing it with us – most appreciated!

    Best,
    Shona
    SInglis@GolinHarris.com