Allentown-Lehigh Valley Airport’s Cargo Operations and Contributions to Regional Economic Development

Case Study – Hub size: non-hub | Characteristic: cargo / freight

ABE Case Study

The Allentown-Bethlehem-Easton Metropolitan Statistical Area (MSA) is in Eastern Pennsylvania approximately 60 miles north of Philadelphia and 100 miles west of New York City. This area is also known as the Lehigh Valley. In part because of its location close to major population centers on the East Coast, the Lehigh Valley International Airport (ABE or the Airport) has become a major facility for handling air cargo. In 2015, Amazon selected ABE as one of the few airports to be served by the company’s new air freight division, Amazon Air. The region was selected as a case study because of its air cargo and freight operations.

The Allentown-Bethlehem-Easton MSA

Regional Economic Strengths

The region is vibrant economically, with population and employment increasing much faster than in Pennsylvania as a whole. The region’s largest sector (based on total employment in 2019) was health care and social assistance, with more than 72,000 employed. Other major sectors (with more than 40,000 employed) are manufacturing and retail. However, the sector where employment changed most significantly was transportation and warehousing. Employment more than doubled to nearly 40,000 and has recorded year-over-year employment growth of 9.4 percent for the past 5 years. The U.S. Cluster Mapping Project reports that the region is in the top 5 percent nationally in distribution and electronic commerce.

ABE employment by sector
ABE Employment by Sector

A map of the area that identifies establishments in the transportation and warehousing sector within a 60-minute drive of ABE highlights the pivotal role of the airport’s cargo and freight operations. Manufacturing establishments within that 60-minute drive employ over 100,000.

ABE and Transportation and Warehouse Establishments in the Region
Source: ESRI Business Analyst

Overview of the Airport and Its Services

Air cargo has been a particular point of emphasis at ABE since September 2015, when Amazon began charter freighter operations at the airport. The operation is now known as Amazon Air, and ABE was one of the first three airports in the developing network. Prior to that, FedEx carried almost 100 percent of the cargo at the airport. By the end of 2017, ABE air cargo exceeded 100,000 metric tons—more than five times the pre-Amazon Air levels.

The growth in e-commerce and higher consumer demand has led to increased tonnage levels. Amazon Air has allocated more aircraft operations to ABE.

Meanwhile, in 2018, FedEx Ground opened an 850,000 square-foot distribution hub in the Lehigh Valley just 2 miles from ABE. FedEx has signaled a higher degree of integration between its ground and air operations, so the potential exists for a linkage to connect to ABE’s FedEx air cargo services.

ABE air cargo
Air Cargo – Metric Tons

Air Cargo Linkages to Regional Economic Development

The operations of Amazon Air at ABE have been transformative for the airport and the region. Three Amazon fulfillment centers, totaling over 2 million square feet, and the Amazon Air operation support the employment of approximately 3,000 Amazon employees in the Lehigh Valley. As e-commerce sustains growth, there is potential for further economic development related to ABE’s air cargo services. ABE recently signed an agreement with an airport real estate development firm to assist with on-airport cargo development and the recruitment of companies and tenants to use those capabilities.

The Airport works closely with the Lehigh Valley Economic Development Corporation (LVEDC), one of the principal regional organizations concerned with driving economic growth and activity for the region. LVEDC recognizes that the airport plays a pivotal role in and has an impact on regional economic development, and transportation resources are important for site selectors and businesses considering where to locate a building or expand an existing one. LVEDC notes that airports like ABE are important for foreign direct investment because international companies looking for places to invest in the United States need quick access to their facilities via airports. Although LVEDC is more involved in passenger air service development, there is recognition of the economic development potential related to air cargo services.

The Greater Lehigh Valley Chamber of Commerce also recognizes the contribution that the airport makes to the region and supports its development as part of a larger effort to improve the transportation infrastructure necessary for continued economic success.

ABE Case Study – Full Report