Facility developers are having their hands full with cargo development projects at a growing number of North American airports. For some, it’s a matter of replacing outdated facilities in order to create sorely needed capacity, while others are pursuing strategic roles in supply chains.

In September, Los Angeles World Airports invited proposals for a sweeping overhaul of the cargo infrastructure at Los Angeles International Airport (LAX). An assessment carried out last year found that many of the facilities at the largest U.S. gateway for trans-Pacific cargo “are not compatible with current industry operating standards.”

Moreover, the airport is approaching capacity. Last year it handled over 2.974 million tons, and the authority’s projections envisage growth of 2.6% CAGR to reach 7.7 million tons in 2045.

The redevelopment project, described in the request for proposals as “a globally unprecedented, campus-wide redevelopment to transform LAX into a state-of-the-art cargo centre,” aims to reduce the footprint of cargo as well as modernize facilities and boost capacity. In part, this is supposed to be achieved through the use of advanced technology.

On the U.S. East Coast, Philadelphia International airport (PHL) is gunning for a bigger slice of international air cargo flows. It has embarked on a project to more than double its cargo facility footprint from currently 600,000 sq ft to 1.4 million sq ft. A study commissioned five years ago found that the airport captures only 9% of a potential US$53 billion air cargo opportunity flowing through its catchment area.

Another airport in the eastern United States looking to boost its air cargo capacity is Pittsburgh International airport, following a 30% rise in volume last year. In March, facility developer Aeroterm signed an agreement for a 30-year ground lease to develop a multi-tenant cargo building with a footprint of 140,000-170,000 sq ft at the airport, which is scheduled to open in the second quarter of next year. Last year handling firm Alliance Ground International (AGI) expanded its ramp and warehouse operations in Pittsburgh.

Miami International Airport also needs to ramp up its capacity. Last year its throughput climbed 17% to 2.7 million tons. Emir Pineda, manager of aviation trade and logistics in the marketing division of the Miami-Dade Aviation Department, said that the airport’s current facility could not handle significantly more than 3 million tons. Miami’s growth projections are for a doubling of volume over the next 20-25 years.

The airport is looking at a proposal for a five-storey building geared to handle between 4 million and 5 million tons, which would nearly double the existing capacity, with a ramp area to accommodate 12 parking positions for Boeing 747 freighters.

The City of Philadelphia Division of Aviation secured almost US$31 million in funding from Washington for the current fiscal year, part of which will go toward PHL’s US$1.2 billion cargo project.

Money keeps flowing from public coffers. The Federal Aviation Administration (FAA) has invested more than US$31 million into nine infrastructure projects at airports this year to improve the efficiency of cargo operations.

Projects funded through grants under the Airport Improvement Program include the construction of a taxiway to increase cargo apron access at Chicago Rockford International airport and the rehabilitation of 37,400 square yards of cargo apron pavement at Bishop International airport in Flint, Michigan.

“The projects at these airports will help expedite the movement of goods throughout the country,” the FAA declared in a news release on the funding program.

In Canada, Edmonton International airport (YEG) garnered C$100 million (US$72.9 million) from Ottawa’s National Trade Corridors Fund this summer. This will go towards the development of 2,000 acres of land for about 60 million sq ft of logistics infrastructure to be built over time.

YEG’s throughput grew around 20% in the first half of this year. One major driver has been Hainan Airlines, which has been serving the airport three times a week with scheduled charter flights. These carry traffic for the Canadian market as well as cargo bound for the U.S. and Latin America that moves out of Edmonton by plane or road across the U.S. border.

Vancouver International Airport is planning to develop a 300,000 sq ft area into an Airport Commerce Centre. Adjacent to the airport’s cargo village, the space was originally designated for utilities, but the airport management now wants to develop its multimodal potential to facilitate air cargo connections with future developments in the area.

A lot of action around air cargo facilities is happening outside airport perimeter fences. This spring, air freight handling firm Aeroterm acquired two warehouses that are located within ten minutes of Montreal’s Trudeau Airport, citing a lack of available space at the airport.

One month later the handler took over two warehouses adjacent to John Wayne Airport in southern California.

Typically, off-airport sites are used to handle imports. Slotting exports through them would be more onerous, given security requirements when cargo is brought to an airport.

Capacity constraints are the chief reason why companies are looking increasingly at off-airport locations, particularly around congested hubs, but the cost is another factor. According to industrial real estate firm CBRE, industrial rent premiums in top airport markets averaged 13% last year, reaching as high as 47% at Chicago O’Hare.

By Ian Putzger

Air Freight Correspondent | Toronto