Technologies
Success Stories
Articles
Newsletter
Testimonials
Industry Initiatives
The U.S. air cargo industry has largely transformed in the last twenty-five years in ways that had direct implications for airport operators’ cargo facilities’ demand. After significant growth in the 1990s, the industry contracted from 2000 through 2015. In 2000, most large and medium-sized U.S. airports at least hosted cargo facilities for Airborne Express, BAX Global, DHL, Emery Worldwide, FedEx and UPS. In short order, several of these either folded or were acquired, leaving empty buildings and vacancies in multi-tenant facilities. All-cargo carriers like Kitty Hawk also ceased operations.
During the same period, passenger airlines’ fleet decisions favoured more frequencies but with smaller regional jets, which resulted in less domestic belly capacity—all of the preceding surpluses of outdated cargo facilities at many U.S. airports. Market share growth by FedEx and UPS more often resulted in the integrators needing to expand or replace their on-airport facilities rather than backfill vacancies. Between 2000 and 2015, most U.S. airports suffered double-digit decreases in cargo rather than growth.
Beginning in 2015, the establishment and expansion of Amazon’s on-airport network and e-commerce generally stimulated growth at dozens of U.S. airports. Amazon often outsourced its handling operations and was willing to occupy legacy facilities at least to test markets, but eventually, its growth would require new dedicated facilities.
At major U.S. international gateways, cargo grew quickly during the same period, with the additional stimulus of belly cargo expansions of transcontinental widebody passenger aircraft flights and expanded freighter networks. After roughly fifteen years of limited cargo facility development, major gateways like ATL, DFW, JFK, LAX, and MIA have initiated ambitious cargo modernisation and expansion efforts. While land-rich ATL and DFW have been able to accommodate such growth on greenfield sites, land constraints necessitate redevelopment on occupied sites at legacy gateways like JFK and LAX.
Redevelopment is more complicated at land-constrained airports but even more due to the more complex air cargo ecosystems operating at international gateways. Unlike most U.S. airports where integrators and Amazon account for 95% or more of total cargo, international gateways often accommodate dozens of airlines operating passenger and all-cargo flights – many with small market shares necessitating the services of third-party handlers and multi-tenant facilities. In addition to the diversity of airlines and multiple handlers, these cargo facilities must interface with hundreds of freight forwarders and trucking companies.
The extent to which U.S. airport operators proactively collaborate with commercial cargo operators and regulators contrasts greatly. Considering the top 100 cargo airports (by 2023 tonnage), the vast majority are so dominated by just Amazon, FedEx and UPS that airport operators can be somewhat forgiven for focusing their attention on just the needs of those three cargo tenants. However, with so few cargo tenants, there is no excuse for some airport operators’ failure to ensure that planning efforts are well-informed by the properties and facilities teams at the integrators. I know those corporate folks from FedEx and UPS well enough to confirm that they can discuss their needs with their airport landlords.
As we’ve already acknowledged, the major gateways with dozens of airlines operating international passenger and freighter flights, multiple cargo handlers, hundreds of freight forwarders and trucking companies interfacing with those on-airport cargo operations and with multiple federal regulatory agencies should portend more engagement from airport operators.
While this entails a minority of U.S. airports, it is still a significant number. Bear in mind that in 2023, there were (according to Airports Council International’s data) 28 airports in the world with more than one million annual metric tonnes of cargo, and nine of those were in the U.S. That’s only one less than in all of Asia! The population and geographic distribution of the U.S. and China are such that each country requires multiple regional hubs for the integrators and far more international gateways than would be sustainable in smaller countries.
Discounting for a moment the integrator hubs MEM and SDF (for FedEx and UPS, respectively), the “big four” legacy international gateways in the U.S. comprise LAX, MIA, ORD and JFK. No disrespect to ANC, but much of its reported tonnage is attributable to transpacific tech stops rather than any on-site cargo handling, so many analysts place it in a different context. The next tier of U.S. international cargo gateways includes a couple of the busiest (in passenger and flight operations) airports in the world in the form of DFW and ATL. When the second tier comprises gateways of that magnitude, it should illuminate what has always been so unique about the U.S. market – and somewhat foretell China’s ongoing and future development.
Even among the bigger U.S. international cargo gateways, there is a lot of diversity. Most have well-established air cargo associations comprising both public and private sector members. Some families have been members of LAX and JFK for three or more generations. These trade associations are particularly helpful for promoting structure for communications between on and off-airport cargo constituents. As landlords, the airports often have at least monthly forums for signatory tenant airlines (including all-cargo carriers), but there isn’t a comparable relationship with critical supply chain partners located off-airport.
In the context of airports as landlords, whether an airport operator actively manages its cargo facilities or outsources this responsibility to private third-party developers can make a significant impact. As an airport planner, I’ve observed that, in some cases (though not universally), airport management may essentially “check out” when their landlord role for cargo operations is limited to a ground lease with a developer. I’m neutral on the topic of public-private partnerships for cargo facility development, but I believe situational context is crucial. Again, as an airport planner, there is a pattern of behaviour in which staff at some airports can provide detailed information about their cargo operations and facilities. In contrast, others simply put up a hand and say, “Just talk to the developer”.
This is an evolving story, of course, but more challenging in the U.S., where so much of our airport “inventory” is vintage. At many major gateways, we are trying to impose 21st-century objectives into environments beholden to decisions made when Elvis Presley dominated the record charts. I’m not making excuses, but let’s at least acknowledge that improvements in infrastructure – specifically utilities – are much more challenging in land-constrained airport environments where contiguous commercial development had already come up to the fences by the 1950s. Some U.S. airport operators already have to reevaluate environmental goals they recognise cannot be compulsory for tenants until the airport can reliably provide the requisite backbone. If ground handlers are compelled to go electric with their tugs, sufficient charging capacity must be adequate.
Aircraft have become more fuel-efficient, driven by both rising fuel costs and environmental concerns. When older freighters could fly at full capacity yet still lose money, fuel efficiency became increasingly important. In hindsight, this mirrors how the pandemic spurred the industry’s enthusiasm for contactless operations.
The “low-hanging fruit” of sustainability improvements for airports’ cargo activities is on the landside, which has the additional benefit of being highly visible. Long queues of idling trucks are detrimental in so many ways and somewhat inexcusable where mitigating solutions exist – both in terms of technology such as Kale’s and where land is available for marshalling yards. Interestingly enough, as an airport planner focused on air cargo when I entered the industry, the cargo discussion was entirely about what were perceived as noisy old, converted freighters operating nighttime schedules and relatively light attention to trucks. Now, the reverse is much more the case.
Fortunately, the cargo community systems that can help manage truck flows can also help airports document the environmental impacts of new improvements—a necessity for warehouse development/expansion in many areas. Many airports lack the existing truck data to create the baseline integral to the environmental review process.
The CCS also provides meaningful data to handlers and airlines to inform staffing levels. Those truck queues are particularly infuriating when handlers have idle doors due to insufficient staffing. However, many markets have labour issues that are more challenging than simple staffing decisions. In an increasingly car-less society, we need to ensure that public transit is amenable to the demands of the air cargo industry. Public transit is often passenger terminal-focused, while the cargo facilities may be miles away in a remote location. Moreover, the nighttime peaks of the air cargo industry are often outside the traditional windows of public transportation. So, sustainability must also include having enough workers to sustain the industry.
