E-commerce has been good to Hawaii’s air cargo industry over the last 15 years, but inbound and outbound air freight volumes are still lagging decade-old peaks, a new state report shows.

The state Department of Business, Economic Development and Tourism released a study Monday on Hawaii air cargo shipments from 1990 to 2016, in an effort to show how the industry has changed and where it is headed.

“Air cargo plays an important role in Hawaii’s economy by transporting merchandise to and from Hawaii quickly and in its original quality,” Eugene Tian, the state’s chief economist, said in a statement announcing the report.

Generally, it is 10 to 20 times less expensive to transport goods to or from the state on ships than by plane, DBEDT said, but air cargo is sought out for items that are time-sensitive, perishable or high-value.

The report showed that outbound air cargo volumes were close to but higher than inbound volumes from 1990 to 2001, after which inbound air cargo soared and has remained far higher. DBEDT said the inbound air cargo gain, which occurred despite mail volume plunging since 1999, was largely driven by e-commerce.

Last year cargo flown into Hawaii totaled 378,000 tons compared with 246,000 tons leaving the state by air. In 2001 inbound and outbound volumes were 180,000 tons and 195,000 tons, respectively, and below levels close to 225,000 tons for each in 1990.

Meanwhile, interisland air cargo was pretty flat at about 50,000 tons from 1990 to 2002 and then after a spike was flat again at about 100,000 tons from 2003 to 2016.

DBEDT links the rise in inbound air cargo to the rise of Amazon, which began to offer free shipping with certain orders in 2002.

Hawaii air cargo volumes peaked in 2005 (inbound) and 2006 (outbound) and have yet to surpass the high marks. Inbound air cargo volume has grown steadily for about six years, and last year was close to the peak, but outbound volumes have been flat for the last five years and remain well off their peak.

Global supply chain

Leonid Bak, the report’s lead author, said it’s hard to discern the reason for Hawaii air cargo declines in the late 2000s but that generally connections to the world economy are an influence because a lot of what’s being flown is part of a global supply chain.

Many goods leaving Hawaii by air don’t originate in the state. For instance, the top export via air in 2015 as measured by value was aircraft parts, at $397 million. Pharmaceuticals were another big export by air, valued at $254 million.

Most of the goods sent by air to Hawaii in 2015 came from the mainland, topped by $730 million worth of electronics and $570 million in “precision instruments.” Also among the 10 biggest imports by air were textiles/leather valued at $175 million, pharmaceuticals worth $163 million and meat/seafood worth $102 million.

Total value and volume of air cargo shipments to Hawaii in 2015 was $10.4 billion and 372,300 tons. As a percentage of all cargo coming to Hawaii, most of which is transported on ships, air cargo represented 8 percent by volume and 21 percent by value, the DBEDT report said.

The value and volume of outbound cargo by air was $6.4 billion and 250,535 tons in 2015.

Even though much of the exports from Hawaii by air are only passing through the state, they contribute to the economy through handling and in some cases processing or assembly. And that has an impact on local jobs.

The report said Hawaii’s air cargo industry jobs have grown tenfold, from 79 in 2001 to 852 last year. The recent count included 149 pilots, 194 flight assistants, 115 ticket agents or travel clerks and 71 mechanics or technicians.

Bak said much of the industry’s job growth is attributed to cargo airlines expanding where passenger airlines once dominated. In 1990 nearly all cargo flown into or out of Hawaii was carried by passenger planes, the DBEDT report said. In 2002 cargo planes began carrying more cargo than passenger airlines, and last year the split was about 60 to 40 percent, according to the report.

The top five carriers last year for outbound cargo were FedEx, UPS, Kalitta Air, Atlas Air and Hawaiian Airlines. For inbound cargo the order was the same except Hawaiian was third.

DBEDT’s report said Hawaii is well positioned for future air cargo growth as a link between North America and the Asia-Pacific region. More e-commerce is expected to fuel growth, though risk factors include global economic contraction, fuel prices, inventory management techniques, environmental regulations, national development programs, market liberalization, new air-eligible commodities and advances in ocean cargo transportation.