By Melissa Campbell
Alaska Journal of Commerce

Rod Hester has more time to do his real job now, something he attributes in large part to Alaska Central Express, an air cargo service that began operations to Dutch Harbor in December.

Hester is the operations manager for the Aleutians Freight Service Co. and works as sort of a middleman between fish processors and buyers. In the past, Hester was charged to haul spoiled fish product from the Dutch Harbor airport to the landfill or to fish mills to be processed into fertilizer and similar products. And he has hauled off hundreds of thousands of pounds of fish, at $400 to $500 a load.

But since December, Hester hasn't been asked to haul any fish, and that's OK with him. He's been able to do his real job and get this product to market, where it belongs. An added bonus: he didn't miss out on the Krispy Kremes.

Alaska Central shipped to Dutch Harbor 25 dozen of these sinfully tasty treats to introduce a new service to get cargo to and from Seattle and to thank them for helping the company to survive.

"That was a big bonus," said Hester, operations manager for the Aleutians Freight Service Co. "We don't even have a McDonalds out here."

Alaska Central began its Dutch Harbor air cargo service as part of a reorganization after losing its bypass mail contract, a large and profitable portion of its business. Shippers use bypass mail to get 1,000 pounds or more of materials to rural Alaska communities at less expensive parcel post rates. This government-subsidized program is dubbed "bypass" because the packages bypass post offices and go directly to eligible air carriers.

For nearly a decade, Alaska Central's operations centered around bypass mail in addition to shipping regular mail and cargo. But late last year, new bypass mail regulations took effect that forced small air carriers like Alaska Central to either change tactics or close shop.

Alaska Central chose to rewrite its business plan to focus on regular mail, small packages (sometimes for Federal Express and United Parcel Service) and cargo, said sales director Todd Wallace. Managers reduced the number of employees from 100 in the days of bypass mail to about 60. They also reduced the company's fleet to four Raytheon Beech aircraft, down from six Beech planes and three Cessnas.

The company currently has 18 scheduled flights a day and serves more than 50 communities. Planes are also available for charter or flag-stop service. On Dec. 16, Alaska Central began serving Dutch Harbor with daily flight schedules. Dutch Harbor is a community of about 4,400 and is located along the Aleutian Chain, about 800 air miles from Anchorage.

"We offer dependable, reliable and affordable service," Wallace said.

Alaska Central plans to remodel its facilities around the state to present a more consistent look, and recently added a freezer and cooler in Dutch Harbor. An advertising campaign is set to start soon.

"Flying mail requires us to leave early in the morning, around 2 or 3 o'clock in the morning," Wallace said. "People don't see our planes so they don't know us."

Dutch Harbor is among the busiest commercial fishing ports in the world, but it has historically seen sporadic and unreliable air service - passenger and cargo. In January, Alaska Airlines became the latest company to pull out of passenger and cargo service. Alaska Air formed an agreement with Peninsula Airways to fill that void.

But Dutch is also notorious for bad weather. "What you (a reporter in Anchorage) think of as bad weather is a normal day for us," said Greg Hawthorne, a managing agent for Alaska Central and a 14-year resident of Dutch Harbor. "About 325 days here are really very nice, but the other 45 days you hear about are so bad you can't even fathom it. And those 85-mile-an-hour winds you got in Anchorage a year ago? I can relate, but we get that all the time."

Airlines bump cargo to make room for passengers, their baggage and mail. Small packages and other cargo - generally in that order - are then loaded on the plane, space permitting. If the plane is full before the fresh-caught fish is on board, it sits until there is room on later flights.

"Everything in Dutch Harbor depends on the weather," Hester said. "In the past, we've had to rely on Alaska Airlines and Pen Air, and their main business is passengers. There were a lot of times we'd have to give up cargo space to passengers."

Expediters also had the option of chartering a plane from Northern Air Cargo or similar freight companies. When chartered, Northern Air generally would fly an empty DC-6 to Dutch. Problem was, Hester said, it wasn't always convenient to come up with 28,000 pounds of fish product in one sitting. And it's not economical to charter a plane to have it go back less than chock full.

The result: fish product would sit sometimes for days. After about three days, however, fish buyers don't want the "fresh" fish that they've already bought. Instead, they'd call Hester to haul it either to the landfill or to a local fish mill plant to turn into fertilizer.

"We didn't have to do that at all this year this year," Hester said. "With just a phone call to Greg (Hawthorne at Alaska Central), I can get as many as five planes a day out here."

Alaska Central's planes hold about 5,500 pounds. They're smaller and can sometimes get onto the island when others can't because of the weather or because they just don't have the flexibility Alaska Central has allowed. And they can do it "dirt cheap" compared to their competitors, Hester said, at about 55 cents a pound versus anywhere between 70 cents and $1 a pound.

Since it began service to Dutch Harbor in, Alaska Central has taken more than half the air cargo business on island, Hawthorne said.