A Conversation with Fred Smith and Richard Anderson

Hundreds of transportation officials and airport executives who traveled to Memphis to see one of the world's only major cargo and passenger airport hubs were aptly greeted Tuesday by the two men who continue to make it possible.

Both Delta Air Lines CEO Richard Anderson and FedEx CEO Fred Smith spoke to a packed house of more than 640 Airport City Conference attendees on how each respective company integrates their Memphis hub around the world.

"If you think about what we do with airports, the winners are cities like Memphis," Anderson said. "Memphis is one of the few airports in the world to have a passenger hub and one of the world's cargo hubs and you have businesses that grow up around it."

Memphis, the host of the international conference, is one of the first cities to develop its airport around the aerotropolis concept, a philosophy whose goal is to make the airport the center of all commerce and economic development.

According to both Smith and Anderson, that model will continue to pay dividends in the future as business will require airports and cargo companies like FedEx to get their goods to market.

"If you look at Memphis, 40,000 jobs originate from the bioscience sector," Smith said. "That is directly related to the ability (of bioscience companies) to move people in and out of an area and to move their types of high-tech goods very rapidly.

"These hub locations — Memphis and Atlanta, Chicago and so forth— are the Liverpools of the 21st century. That's where business will be located to have access to this type of travel and transportation."

Along with international markets, another game changer for FedEx continues to be the increase in light-weight but high-value goods shipped around the world.

Memphis-based Medtronic was used as an example by both executives of how companies will need access to an airport hub to be able to reach the international market.

"The reason why (Medtronic's) business works so well is because they are at a hub airport," said Anderson, who also sits on the Medtronic board. "Their sales people can get on a Delta flight and visit hospitals around the world and FedEx is in their building...(allowing them) to ship around the world."

Though access to any market is possible thanks to hubs like Memphis, challenges such as increases in fuel prices and underfunded aviation infrastructure projects threaten both the cargo and passenger industries, Smith and Anderson said.

Despite these issues, airlines, cargo distributors and the businesses that surround them will continue to thrive in cities like Memphis that embrace the aerotropolis concept.

"The three largest economies in the world now are North America, Europe and China/Asia," Smith said. "If you want to supply the businesses and consumers in those economies with high-tech and value-added goods, the best place to locate is next to one of the locations where you can have access, on an eight or 24-hour basis, to virtually every person on the planet."

-- Trey Heath