Analyzing San Francisco International Airport’s Air Cargo Data

Photo by Patrick Campanale on Unsplash

Note: This assignment is a part of submissions for the Udacity Data Scientist NanoDegree Program.

Overview

Over the last couple of decades, the air cargo industry has contributed significantly in transforming the supply chain networks across the world. It has played a pivotal role in facilitating access to new markets and the subsequent development of economies. Due to an increase in demand for faster delivery, technological advancements in cargo-tracking status, and hassle-free cross-border e-commerce processes, the air cargo industry is projected to grow at a CAGR of 4.0% during 2021–2027.

The key stakeholders that are involved in air cargo operations are shippers (senders), forwarders (who arrange for transportation), truckers, airports, airlines, and consignees (receivers). Of all the stakeholders, airports play a crucial role in providing the infrastructure for cross-border transportation. The focus of airports concerning air cargo often depends on multiple factors like their geographic location, distance from manufacturing base, airlines operating at the airport, traffic management, route management, etc.

The objective of this article, therefore, is to analyze the air cargo operations data collected for San Francisco International Airport (SFO), California, USA, and answer some questions to better understand the trends of air cargo movement through this international airport. San Francisco International Airport is the largest airport in San Francisco Bay Area, the 7th busiest airport in the US (by passenger count), and features in the top 30 cargo airports in US.

Trivia: The busiest airport in the world by cargo handled is Hong Kong International Airport, Hong Kong (5,025 MT), followed by Memphis International Airport, Tennessee, US (4,480 MT), and Shanghai Pudong International Airport, China (3,982 MT).

Data Source

The dataset used for this project is sourced from Kaggle: San Francisco Air Cargo Statistics

The data dictionary can be accessed here: DataSF Data Dictionary for Air Traffic Cargo Statistics

The code base can be viewed in this Github link.

Note: This dataset does not contain the details about the revenue generated through any of the shipments taking off or landing at SFO, but only about the weights of the shipments in pounds and Metric Tons. Therefore, the analysis of exports and imports is done considering weights, with an assumption that higher weights of shipments would entail higher revenue, compared to lower weights. Hereafter, the term ‘imports’ and ‘exports’ would mean in terms of quantity of goods (metric tonnes or kilo tonnes) and not dollar values.

Key Questions

1. What percentages of cargo (by weight) is exported and imported via SFO every year?

Exports vs Imports (Absolute values and % difference). Source: Kaggle.

Observation:

• The total imported goods received have always been higher than the total exports sent and the deficit (imports-exports) in terms of quantity has been steadily falling from 2005 till 2010. However, from 2011, the negative deficit continued to grow at a steady rate. (Fig 1.2)
• With every passing year rate of imports is increasing faster than that of exported goods. (Fig 1.1)
• A dip in imports and exports occurred in 2020 and can be attributed to the impact of the global pandemic of novel Coronavirus (Covid-19).

Analysis:

• In the air cargo industry, the shipping process involves the cargo being transported from the shippers’ origin-destination to the airport (via trucks). Once the cargo is delivered at the airport terminal, it is sent for sub-processes like inspection, verification, packaging, route identification, etc., from where it is sent for loading on the aircraft. The unloading of the cargo at the destination also takes place through a set of routine processes. These operations are generally optimized for higher efficiency, revenue management and to ensure the least amount of delay in completing the transit. The airport requires a significant amount of resources in terms of time, manpower, finance, and technology to facilitate these. Sometimes factors like weather, airline emergencies, etc. also play a role in obstructing these operations.
• It is important to note here that SFO is largely a gateway airport (owing to the huge incoming and outgoing passengers) and not a dedicated cargo airport. Also, the data shows SFO as the initial origin and the final destination of the cargo, not as a hub transit. Therefore, if any cargo has to be exported from the USA, the shippers/integrated freight providers would naturally prefer a cargo airport where the shipping process will take lesser time. This might explain the constant or a lower rate of exports from SFO.

Trivia : According to the Observatory of Economic Complexity, in January 2022, the top exports of San Francisco were Cars ($236M), Electric Batteries, ($2.79M), Sunflower Seeds, ($886k), and Scrap Iron ($433k). In January 2022 the top imports of San Francisco, CA were Electric Batteries, ($52.1M), Cars, ($34.1M), Coffee, ($14.4M), Video Displays, ($11M), and Electrical Transformers, ($6.69M).

2. Discuss the import and export trends of every region over the years via the San Francisco International Airport.

Source: Kaggle

% Difference between Exports and Imports for every region wrt SFO. (Source: Kaggle)

Observation and Analysis of top 3 regions

From Fig,2–1, it can be inferred that the top 3 regions that showed the most volatility are : Asia (Orange line), Europe (Green line) and Australia (Maroon line).

1. Asia:

• Fig.2–3: Overall imports from Asia have declined linearly from 78% to 66%, and exports also fluctuate between 70% and 72%. Asia, thus, remains a major economical geography for trade, as a big chunk of exports and imports taking place from SFO is for the Asia region.
• Fig.2–1: From -10% in 2005, the deficit between exports and imports (by quantity) has been steadily declining, and post 2019 it has turned positive.

2. Europe:

• Europe has been the second biggest destination for exports and imports from SFO. (Fig. 2–4)
• SFO has been a net exporter to Europe since 2005, but the trade deficit (in terms of qt.) has been steadily falling. (Fig.2–1)
• By 2016,qt. of imports started exceeding exports and by 2021, the trade difference stands at almost -5%.
• Though a sharp decline in exports in 2020 (18%) from 22% in 2019, a steep increase in imports are received at SFO from the European region since 2010.
• From 2010 through 2016, the imports have increased by 10%.

3. Australia /Oceania:

• Australia has been the third-largest destination for exports and imports from SFO. Both imports and exports showed a spike of 10% in 2020 and the trade deficit (Fig 2–1) has been steady between -1% to 0.5%. (Fig. 2–5)

3. Which airlines plied the largest amount of cargo through the SFO in last five years?

Table -1: Top 5 airlines (by cargo weight) to and from SFO

Table -1: Top 5 airlines (by cargo weight) to and from SFO (Source: Kaggle)

The following images show the cargo transported by each airline over the period of 2017–2021.

Yearly Qt. of Cargo Shipped (Source: Kaggle)

Observation & Analysis:

• United Airlines (HQ: USA), by far, has been the most frequent airline to operate to and from SFO, followed by Korean Airlines (HQ: South Korea), Taiwan-based China Airlines and EVA Airways, and Asiana Airlines from South Korea.
• United Airlines cargo shipment fell from 109K Metric Tons in 2019 to 59K Metric Tons in 2021, which is around 45% of its pre-pandemic level.
• China Airlines is the only one among the top 5 airline companies that showed a spike in operations to SFO during the pandemic in 2020 and 2021 as well.
• The dominance of Asia-based airlines can also be corroborated by the above-discussed section on Asia being a major destination for cargo transport from SFO. According to OEC, Taiwan and South Korea are the fastest growing exports destination in Jan 2021–2022 period. South Korea is also a rapidly declining import destination from SFO. This finding sheds more detail on explaining the change in trade operations with Asia, as discussed above.

Conclusion and future scope of study

• International trade analysis cannot be complete without knowing the underlying costs and revenue generated from the cargo operations. Therefore, cost and revenue data should be combined with this dateset to further understand the impact of increasing Asian and European exports and imports on San Francisco Airport’s daily operations.
• International trade is heavily dependent on geo-political issues, macroeconomics of partner countries and the global environment. Factors like fuel prices, import duties and domestic production policies influence the cargo operations heavily and are in turn impacted by the above mentioned parameters. Hence, future scope of study can be to collate a data set that includes above information to provide with much detailed insights on cargo operations.