Alaska: Inspiring Awe and Innovation

Alaska: Inspiring Awe and Innovation

In this 10th edition of our Alaska supplement, we explore the state’s beauty, resources, and the challenges presented by its location, geography, and climate. The logistics providers that excel in this state rely on grit, dedication, and expertise to move products to, from, and within the state safely and efficiently.

The state of Alaska offers so much. “Alaska is beautiful, and that’s driven tourism,” says Chris Rye, vice president of operations with TOTE Maritime Alaska. “In the summer, you get daylight for 20 hours a day. The winter has fewer hours of daylight, but also has the Northern Lights.” With more people working remotely, it’s possible some, and particularly those who enjoy the outdoors, will take advantage of the opportunity to relocate to Alaska. “My colleagues there love it,” he adds.

At more than 663,000 square miles, Alaska is about one-fifth the size of the 48 lower states combined. East to west, it measures about 2,500 miles, or roughly the distance from Savannah, Georgia, to Santa Barbara, California.

Substance accompanies Alaska’s size and beauty. “The state also has enormous energy, mineral, and seafood resources,” says Alex McKallor, executive vice president and chief operating officer with Lynden, a provider of logistics and transportation solutions.

“Alaska is strategically important to the United States,” says Jason Totah, president of logistics provider Odyssey International and Odyssey Alaska. Along with its reserves of oil and other natural resources, Alaska is home to multiple military bases.

Logistical Challenges

The Frontier State presents multiple logistical challenges. “Outside of war zones, Alaska is the world’s most challenging logistical laboratory,” says Darren Prokop, Ph.D., professor of logistics with the University of Alaska Anchorage.

In this, Inbound Logistics’ 10th edition of its supplement on the state of Alaska, we explore the beauty and resources in the state and the challenges presented by its location, geography, and climate. We highlight the logistics providers committed to serving their Alaskan clients, often relying on grit, dedication, and expertise to move products to, from, and within the state safely and efficiently.

For many logistical purposes, Alaska is basically an island. It’s connected to Canada and the continental United States by a single road and lacks a robust manufacturing industry in-state that could supply goods. More than 90% of Alaskans rely on ocean shipping services for everyday necessities.

“Almost everything is brought to Alaska from the lower 48 states, typically by ship several times each week,” Totah says, adding that Odyssey provides reliable ocean service between Seattle and Anchorage.

Odyssey, which annually moves cargo valued at $60 billion, operates terminals in Anchorage, Fairbanks, and Kenai-Soldotna and provides a range of ocean freight consolidating and freight forwarding, trucking, logistics, and warehousing and distribution services.

The extreme Alaskan weather—average January temperatures in Fairbanks range from -17° to 1° Fahrenheit—along with heavy snowfall and seasonal flooding adds to the challenges.

Most equipment purchased to operate in Alaska has to incorporate heaters that can warm the engine blocks and ensure they turn on when needed, no matter the temperature, Totah notes.

The salt spread across the roads to melt snow wears away at equipment. Some parts of the state, like the North Slope and Prudhoe Bay, are accessible by road only in winter, when the ground is frozen, Prokop says.

Alaska’s population is not only small—about 740,000 people—but half live in the three cities of Anchorage, Fairbanks, and Juneau. The remaining residents are scattered in villages across the state.

Another challenge “is the lack of transportation infrastructure,” McKallor says. Most of the state isn’t connected to the road system, so many shipments must combine multiple transportation modes. “Lynden applies new approaches to connecting these remote communities,” he says.

Indeed, since completing its first scheduled truck delivery to Alaska in the early 1950s, transporting a load of fresh meat from Seattle to Fairbanks, Lynden has deployed trucks, ships, barges, ferries, aircraft, and even hovercraft to help customers move shipments beyond Alaska’s roads and to their customers. “By leveraging our large service center network and multimodal capabilities, we can connect Alaska’s people and businesses seamlessly to each other and to the world,” McKallor says.

Air Transport Soars

“The limited road structure makes air transport more essential,” says Adam Drouhard, managing director of cargo with Alaska Airlines.

What’s more, the primary airport in Alaska, Ted Stevens Anchorage International Airport, is within about 9.5 hours flying time to 90% of the industrialized world. Perhaps not surprisingly, it routinely ranks among the busiest cargo airports in the world.

About 80% of air cargo freight from Asia that’s destined for the mainland United States will move on air cargo freighters that lay over in Anchorage as part of “gas-and-go” operations, Prokop says. When the freighters are fully loaded, they need to refuel in Anchorage. “The extra one or two hours of in-transit time is more than compensated for by the extra revenue earned by carrying more cargo,” he adds.

“Alaska Airlines supports many markets and communities in Alaska and creates new supply chain channels where it needs to,” Drouhard says. The fifth-largest U.S. airline based on passenger traffic, Alaska Airlines is the only passenger airline in the United States with dedicated cargo planes. From its headquarters in Seattle, Alaska Air Cargo’s fleet of 737-700 freighters delivers transportation flexibility and capability to, from, and throughout the state of Alaska.

Even as many logistics operations were tested over the past few years, “air cargo didn’t miss a beat,” Drouhard says. Indeed, Alaska Airlines airplane bellies were 80 to 90% fuller, he says. As in the rest of the world, e-commerce orders in Alaska “have been on fire,” Drouhard adds, noting this boosted the air cargo market.

In addition to e-commerce orders, Alaska Airlines has long moved items essential for daily living, like food and pharmaceuticals. That included transporting COVID-19 vaccines through Project WarpSpeed and other partners. “We move groceries and life-saving medicines every day. It’s humbling to be part of these efforts,” Drouhard says.

Similarly, Alaska Airlines handles the movement of transplant organs throughout the state, Drouhard says. “It requires much coordination, as well as understanding what’s at stake at the end of the day: life and death. We strive to make sure these go off perfectly.”

The airline also has led in its environmental efforts. Alaska Airlines was one of the first to compost and remove single-use plastic straws and citrus picks from its planes and lounges. It’s the leading U.S. airline on the Dow Jones Sustainability Index, and ranked first in fuel efficiency for seven consecutive years by the International Council on Clean Transportation, an independent, nonprofit research organization.

In 2023, Alaska Airlines will add two 737-800 aircraft to its Alaska Air Cargo fleet, for a total of five scheduled freighters connecting Alaska to the mainland United States. The planes will be converted from existing passenger aircraft and will offer more main deck and belly-load space, as well as higher fuel efficiency than the three 737-700 planes currently in use.

Streamlining Operations

That’s not the only change. Alaska Air Cargo is partnering with IBS Software to upgrade its cargo management system to iCargo, also during early 2023. Among other changes, this will enhance terminal operations and the mobile application. Shippers also will be able to manage their accounts through a new online portal.

Other logistics providers also offer air transport in Alaska. Lynden’s Hercules cargo planes fly scheduled service to the Alaskan towns of Bethel, Nome, Kotzebue, St. Mary’s, Emmonak, and McGrath from the company’s hub in Anchorage.From Bethel, Lynden’s hovercraft service supplies villages on the lower Kuskokwim River.

In addition to moving shipments from mainland U.S. to southcentral Alaska, Span Alaska, a division of Matson Logistics, offers overnight or two-day air service from Anchorage to Fairbanks and the Kenai Peninsula. Some of the westernmost villages are only accessible by air or ocean, so Span Alaska offers air cargo service to those points to ensure total state coverage.

The proposed Anchorage Pacific Air-to-Sea Service (ANC PASS) will likely enhance air cargo’s viability and coverage. Under the proposal, shipments would fly via air charter from Asia to Anchorage, transload in Anchorage to ocean vessel (or truck for ANC PASS+), head to Seattle/Tacoma, where they’d be transloaded to truck for final delivery. A study found cargo from Asia could travel to West Coast distribution facilities in as little as six to seven days, with the worst-case maximum of 15 to 19 days.”ANC PASS can offer shippers a medium-speed, medium-cost, transpacific option,” said Jim Szczesniak, Ted Stevens airport director.

Ocean Transport Provides Reliability

About 90% of goods (outside of petroleum) heading into Alaska travel by ocean. The Port of Alaska in Anchorage handles about half of all inbound freight into Alaska and is one of 17 commercial strategic seaports in the United States, supporting military operations in Alaska, the Arctic, and across the Pacific Rim.

Reliable service in Alaskan shipping operations is critical, Totah of Odyssey says. If a part breaks or fails to work, trying to expedite a replacement can be a nonstarter, given limited supplies, he adds. For instance, Odyssey often has just a four-hour window to restock a cruise ship. “You can’t have problems,” he says.

Along with cruise ships, Odyssey frequently works with oil and gas producers. Again, reliability is critical, given that the potential cost of downtime due to a delay can hit six figures per day, Totah notes.

TOTE Maritime Alaska, which has been serving customers in Alaska since 1975, operates two cargo ships that transport goods to and from Tacoma, Washington, to Anchorage, Alaska, twice-weekly. Rye also recognizes how critical reliability is. “It’s such a tight supply chain and Alaskans rely on consistent service” Rye says. “We operate safely, but reliably.”TOTE Maritime’s Orca Class ships were built for the challenging conditions of the Gulf of Alaska. As important, its telematicstechnology provides end-to-end visibility of shipments.

The unique roll-on, roll-off (RORO) ships of TOTE enables shippers to drive their cargo directly onto the ship, Rye says.Another benefit: the ships can accommodate blended cargo and keep all goods within their trailers. What’s more, cargo can be safely loaded without using forklifts and cranes.

During the pandemic, when access to Canada was limited, many Americans from mainland United States who wanted to get to Alaska could ship their vehicles and RVs on TOTE, and fly-in to meet them in Anchorage, Rye says. “It’s like an extension of the highway to Alaska.”

TOTE offers a range of equipment, including 53-foot, refrigerated, and insulated trailers. “When it gets to minus temperatures, insulated trailers maintain the temperature without freezing,” Rye says. TOTE also moves construction and military equipment, using vessels that accommodate over-the-road trailers and over-sized freight equipment. As important, its telematicstechnology provides end-to-end visibility of shipments.

Preventing Stockouts

Alaska’s size, geography, and weather can make distribution centers and centralized warehouses expensive and impractical. As a result, shippers from the lower 48 states need to coordinate and consolidate shipments to arrive on time to prevent stockouts at stores. The weekly replenishment of clothes and food from ocean shipments is critical, says Michael Johnson, president, Span Alaska, a division of Matson Logistics. “We can serve as a company’s distribution center in Alaska, providing a statewide service network and last-mile delivery to virtually any part of the state,” he adds.

Span Alaska Transportation provides over-the-water shipping twice weekly via containership, or weekly via barge, from the Port of Tacoma, Washington, to the Port of Anchorage as well as Kodiak Island. Its team of expert logisticians then uses rail, road, and air to deliver shipments to their ultimate destinations. Span Alaska is a leader in moving less-than truckload (LTL) and less-than-container (LCL) freight across Alaska. At its base in Auburn, Washington, Span Alaska Transportation operates a 93-door terminal on 15 acres.

From Anchorage, Span Alaska also offers southbound shipping to Kodiak, Dutch Harbor, and the Port of Tacoma once weekly. For shipments destined beyond Tacoma, Span Alaska leverages a network of premium truck and rail carriers to deliver Alaska-origin shipments to any location throughout the United States and Canada.

To ensure adequate inventories, especially given current supply chain shortages, Odyssey and some other companies have been back ordering supplies, Totah says. Odyssey also has helped get some clients to change packaging materials to those that are more readily available. “We pride ourselves on being agile,” Totah says. “If we need to, we’ll fly someone to accompany a shipmentor hand-carry a critical item to ensure it arrives at its final destination.”

Ensuring Reliability

Matson Navigation Company has been a leader in shipping through the Pacific Ocean since 1882 and its team has been serving customers in Alaska since 1964, says Bal Dreyfus, senior vice president, Alaska, with Matson. In 2015, through the acquisition of the Alaska operations of Horizon Lines, Inc., Matson added the ports of Anchorage, Kodiak, and Dutch Harbor to its shipping network. Matson also invested millions in new equipment, including a 65-ton Gantry crane for its Kodiak terminal. It’s both the largest in Alaska and powered by renewable energy.

Matson operates three ships in the Alaska trade lane. The ships call in Anchorage and Kodiak twice each week and Unalaska once per week. Matson owns its own equipment and operates its own terminals in Tacoma, Anchorage, Kodiak, and Unalaska.Control of these assets allows Matson to operate reliably as close to its service schedule as weather and tides allow.

Matson, which is the only Jones Act containership operator serving Kodiak and Dutch Harbor, serves more Alaska ports than any other containership operator. Matson’s Alaska service offers a large inventory of refrigerated containers and expertise in cold-chain operations to ensure consistent product quality. Cold chain logistics solutions help keep Alaska seafood exports frozen.

Through its Alaska-Asia Express service, Matson offers direct service from Dutch Harbor, Alaska to Ningbo and Shanghai, China. Once at the Shanghai hub, shipments can transfer to 37 other cities in Asia through Matson’s partner network, including in South Korea, Japan, and Taiwan.

Sustainable Shipping

Carriers increasingly are taking steps to reduce the environmental impact of their voyages to Alaska. TOTE is in the process of converting its fleet to dual-fuel liquid natural gas (LNG) technology, which will cut greenhouse gas and sulfur emissions.

In 1993, Matson became the first container vessel operator to adopt a zero solid-waste policy. Its “Greentainer” program collects all non-food solid waste for transfer to recycling, waste to energy, or other environmentally regulated disposal facilities on shore. Other than food waste, no solid waste aboard its vessels is thrown overboard. Matson has also been an industry leader in installing ballast water treatment systems to prevent the spread of invasive species.

Matson recycled the last of its steamships in 2021. It’s committed to a 40% reduction in Scope 1 greenhouse gas emissions from its fleet by 2030. It’s also set a goal of net zero total Scope 1 greenhouse gas emissions by 2050.

Although it was in operation for only part of 2021, Odyssey’s Cloverleaf Sustainability Program reduced carbon emissions for clients by about 490,000 tons. To achieve this, Odyssey invested in a range of technologies, including alternative fuel vehicles, devices enabled by the Internet of Things (IoT), and telematics. The company also created tools that help it work with customers to determine sustainable transportation modes, and partnered with its clients to identify intermodal options.

Alaska’s Road Network

Of the goods arriving at the Port of Alaska via containership, approximately 25 to 30% is distributed throughout the state via rail and truck service. Alaska has one mile of paved road for every 640 square miles of land. In comparison, Minnesota has 22 square miles of land for every mile of road, while North Carolina has 14 square miles of land. About 20% of Alaska’s roads are paved; in the other 49 states, the average is 91%.

Moreover, the road network is mostly in south central Alaska, Prokop says. Anyone traveling any distance in Alaska, including truck drivers, knows they’re vulnerable to extreme weather and topography, which can occur amidst long stretches without cellphone service or GPS service. As a result, “each trucker will stop to help another over lonely stretches of road,” no matter which company they’re from, he says.

That’s especially true when traveling Alaska’s unique ice roads, which are built each winter to traverse land that’s otherwise too soft to drive on, Prokop says. By traveling the ice roads, trucks can proceed from Fairbanks up the Prudhoe Bay oil fields near the Arctic Ocean. Otherwise, deliveries have to be made via expensive air freighters. At the same time, “the drive can be treacherous,” he adds.

Between about late September and through April, Span Alaska, one of the largest freight forwarders in Alaska, offers a “keep from freezing” or KFF service. Insulated containers for KFF goods maintain temperatures above the freeze point. “A significant portion of freight moves within these insulated containers,” Johnson says. At times, Span Alaska heats its containers to keep them from freezing, he adds. Examples of products shipped this way include water-based paints and adhesives, and certain pharmaceuticals.

Span Alaska, also recently initiated a chill/freeze offering and is growing this business to supply stores across Alaska, Johnson says. The chill/freeze service is primarily for perishable products, such as refrigerated groceries, produce, and meat.

Over-the-Road Technology

Span Alaska also is “intensifying its focus on technology,” Johnson says. Among other initiatives, it’s implementing faster connections to carrier partners to automate the transmission of bills of lading and other documents. It’s also releasing a new customer portal and redesigning its website to improve the user experience. “Over the next year, we’ll be redeveloping our entire operating system so it’s easier and faster to connect to online,” he adds.

The 54,000-square-foot Anchorage Service Center, which Span Alaska opened several years ago, is a “signature facility,” Johnson says. It boasts 88 dock doors and incorporates technology that allows Span to enhance customer service, streamline freight handling, and accelerate delivery timelines. The center handles about 60% of the freight Span moves through Alaska. “Our Anchorage Service Center is a major hub in our Alaska multimodal network,” he says. “Owning our own assets, including trucks, containers, and facilities, makes our network seamless, responsive, and transparent.”

Coordinating Modes

Alaska’s logistics infrastructure must be built and maintained to withstand the state’s challenging weather and topography. For example, the Port of Alaska requires frequent dredging because it’s surrounded by waters that take in cold, silty glacial run-off, Prokop says.

Moreover, in a state as vast as Alaska, shippers need to rely on several modes of transportation and seamless handoffs between them, Johnson says. That’s why Span Alaska is advancing its shipment visibility technology—so customers can monitor their shipment every step of the way and be assured that the delivery will be on time.

In developing its business in Alaska, Lynden has been driven by its customers’ need to “get beyond the road to reach their customers,” McKallor says. Lynden’s service center network is one of the largest in the state. By leveraging its operating hubs and multi-modal capabilities, Lynden is “able to connect Alaska’s people and businesses seamlessly to each other and to the world.” Because Lynden offers a range of transportation options, customers can optimize their time and money when shipping to, from, or within Alaska, he adds.

Across its fleets, Lynden invests in new equipment and modifications to ensure their trucks, planes, and vessels are as aerodynamic and energy efficient as possible. Lynden companies consistently score among the most efficient fleets in the nation despite operating in some of the most steep terrain and extreme weather. These efforts have led to Lynden being the first Alaska-based transportation company recognized by the Environmental Protection Agency (EPA) SmartWay Transport Partnership and the first trucking company to earn the Green Star Award for Alaskan businesses.

Matson coordinates truck, rail, and barge service connections throughout south central Alaska, Kodiak, and the Aleutian Chain, as well as the lower 48 states. Its equipment includes dry and refrigerated containers, open-top containers, insulated containers and flat racks. Technology offers end-to-end transit cargo visibility.

Rail Transport

The mainline track of the Alaska Railroad is about 470 miles long, anchored on the south by Seward and on the north by Fairbanks. It’s one of a few railroads that handles both passenger and freight traffic, with more than a half million passengers riding Alaska Railroad trains each year.

Yet, freight generates more than half of its operating revenues. The Alaska Railroad moves major commodities, including petroleum products, chemicals, oilfield supplies, gravel, coal, and dry goods.

Supply Chain Education

Considering the challenges of moving shipments to, from, and within Alaska, it’s not surprising that the University of Alaska Anchorage has offered a BBA in global logistics and supply chain management and an MS in global supply chain management for more than 20 years. Prokop says faculty have published widely, showing how Alaska meets its logistics challenges and uses logistics and supply chain management to enhance its economy and the quality of life of its residents, and to maintain a key role in U.S.-Asia trade.

Since 2011, the Alaska Performance Scholarship (APS) program has awarded Alaskan high school students who excel more than $98 million in scholarships they can apply toward in-state secondary education. In 2020 and 2021, more than one-third of students were eligible for the scholarships.

A primary goal of the program is to keep high-achieving graduates in Alaska. One to six years after graduation, APS recipients were 8% more likely to remain in the state than their non-APS counterparts. More than two-thirds (71%) said the scholarship influenced their decision to attend school in-state.

The Workforce and Military

Education doesn’t stop at graduation. “Alaska-based companies devote many resources to train personnel for the unique challenges involved in doing business in Alaska,” Prokop says. Examples include teaching employees about the requirements of Arctic engineering and mining.

The oil and gas industries account for the largest component of Alaska’s economy; nearly 85% of the state’s budget comes from oil revenue. Next is tourism; the state attracts 1.1 million visitors each year.

Nearly 6 billion pounds of seafood are harvested each year off Alaska’s coastlines. The state is one of the world’s top producers of wild salmon. Forestry is another thriving industry, given Alaska’s 28 million acres of commercial forest.

Somewhat surprisingly, about 15 million acres of Alaskan land can be farmed. With sunlight stretching long into the night in the summer, produce can reach mammoth sizes. Cabbage grown in Alaska’s Matanuska Valley, for instance, can top 90 pounds.

Alaska also is home to multiple military bases, and TOTE is among the logistics providers that specializes in military moves across the Gulf of Alaska. This includes cold-weather training cargo, and brigade-sized and division-level moves. “When the military is moving equipment from Alaska to the lower 48 states, our vessels and experienced team give them ideal operations to work with. We’ve moved tanks and helicopters, among other equipment,” Rye says. TOTE provides shipping updates via EDI and manually, as needed. Its employees understand military moves and provide knowledgeable support.

Tackling Challenges

Alaska poses unique challenges, yet the logistics providers doing business in the state, as well as their clients, pride themselves on tackling these obstacles to deliver the products their customers need. That includes during the pandemic. Matson, for instance, maintained reliable supply chain service throughout the pandemic. “To date, Matson has not ‘blanked’ (canceled) a single Alaska sailing and has continued to deliver critical supplies, including PPE, throughout the pandemic,” Dreyfus says.

A few years ago, Lynden’s barge service expanded into multiple Arctic villages, like Barrow and Wainwright. “We mean it when we say we cover the entire state of Alaska,” McKallor says. “We have earned a reputation for being able to get it there, no matter where ‘there’ is.”

Shipping to Alaska Ten Factors to Consider

  1. Alaska is a logical refueling point between Asia and mainland United States.
  2. Alaska is about 9.5 hours flying time to 90% of the industrialized world.
  3. The sheer beauty of the state draws more than one million visitors each year.
  4. Alaska is strategically located as a key trans-shipment hub for businesses targeting Asian, European, and North American markets, says McKallor of Lynden.
  5. It’s likely one of a few places in which you can travel on ice roads.
  6. The size of the state and lack of infrastructure mean many shipments must travel by a combination of transportation modes. Logistics providers need to be experts in connecting these together to offer a seamless experience.
  7. In addition to harsh weather, Alaska is home to 70 potentially active volcanoes. Every year, more than 5,000 earthquakes rock the state. Carriers have to plan for contingencies in case the weather or topography—or both—decide not to cooperate, Prokop says.
  8. Alaska is, for most logistical purposes, an island.
  9. One challenge with most ocean shipments to and from Alaska is the inability to fill backhaul trips, Prokop says. Boats carrying food, apparel, and other items to Alaska typically return empty, as do the tankers hauling commodities from Alaska. Fronthaul shippers bear the entire cost of the roundtrip, boosting prices on many retail items, he says.
  10. Parts of the state are so remote, GPS and cell service is questionable. Truckers and other drivers need to be prepared to handle any event on their own.

Leave a Reply

Your email address will not be published.