(UPDATED June 27, 2023, 6:50 p.m. ET)
The third and final phase of a large air cargo development at Chicago O’Hare International Airport is completed, but freighter aircraft cannot yet reach the large transfer facility because the city’s Department of Aviation hasn’t completed a taxiway connection.
Ground handling company Worldwide Flight Services has moved in and is already processing cargo at the 132,000-square-foot facility but temporarily faces higher expenses because it must truck shipments from the opposite end of the airport where airline customers can bring cargo jets.
WFS announced in early June that it had signed a 15-year lease with developer Realterm to run the quick-turn warehouse at one of the nation’s largest passenger and cargo gateways. The new facility increases WFS’ cargo capacity at O’Hare airport by more than 10%. The provider of airport ground services controls three other transit centers with a combined footprint of nearly 600,000 square feet, not including space subleased from an airline tenant. The new building on the northeast quadrant of the airport is flanked by about 200,000 square feet of ramp space that can accommodate two large freighters the size of a Boeing 747-8.
Ben Dawson, WFS’ vice president of cargo operations, said city construction crews are expected to finish pouring concrete for the taxiway within a couple of weeks and that freighters will begin rolling to the warehouse by the second half of July.
“Right now we’re handling our aircraft on the south side and cargo is trucked directly to the building, which is accessed from the front. Once we get operational, it will be the rear side with [airside access],” said Dawson.
The overall project was delayed 18 months by pandemic-related supply chain challenges, including a concrete shortage in Chicago. Dawson said taxiway construction more recently has been hindered by weather conditions.
“The completion of the third and final phase of the Realterm development is a monumental moment in the history of O’Hare International Airport, as it marks the completion of the airport’s Northeast Cargo Campus, a decades-long project that has solidified O’Hare’s status as a global leader in air freight,” the Chicago Department of Aviation said in a statement to FreightWaves after initial publication. It said final taxiway work will be completed next month.
WFS provides cargo and ramp services (refueling, aircraft pushback and towing, etc.) at O’Hare for freighter operators such as Air France/KLM, Atlas Air, China Airlines, Eva Air, Kalitta Air, Flexport (a logistics company that contracts with Atlas Air for chartered service), UPS and the U.S. Postal Service. Last year it handled more than 684 million pounds of cargo.
The cargo campus delivered by Realterm, which leased the land for 35 years from the airport authority, encompasses 930,000 square feet of terminal space, 13 parking spaces for extra-large freighters and a fuel farm. Phases one and two were delivered in 2016 and 2017.
Realterm originally said it planned to invested $56 million in the new building and ramp, which includes solar panels and chargers for electric forklift vehicles and required major excavation and site preparation. The price is believed to have escalated significantly since 2021. Marketing Director Sophia Stuart declined to provide an updated figure of the development cost.
The site is fitted with a three-level container storage racking system to optimize productivity and an automated bypass system. It also has a 3,000-square-foot refrigeration room with vertical storage and capacity for more than 100 pallets and six containers for temperature-controlled products.
Chicago O’Hare is the third-largest airport in the U.S. by tonnage, excluding the FedEx and UPS super hubs and the trans-Pacific refueling stop in Anchorage, Alaska, according to Airports Council International. Last year it facilitated the movement of more than 2.5 million tons of cargo. That was off 12.9% from 2021, when air cargo was superheated by pandemic disruptions, but 20% higher than in 2019. The airport has seen significant increases in cargo volumes and freighter activity during the past 2.5 years, led by pharmaceutical, aerospace, chemical and e-commerce products.
Freight, express and mail traffic was down nearly 22% year over year for the January-April period, according to Chicago Department of Aviation statistics. Congestion at O’Hare is also down, but logistics companies still complain about pinch points from outdated building infrastructure, inadequate road and receiving areas for trucks, labor shortages and limited digital communications between stakeholders.
The Chicago area has a high concentration of freight forwarders, trucking companies, and importers and exporters moving freight in and out of the Midwest.
Air France/KLM cargo modernization
Meanwhile, Air France/KLM this month completed the renovation of its cargo terminal at O’Hare’s South Airfield, increasing capacity by 40%, according to a news release. Sister company Martinair Cargo shares the site. A grand opening ceremony is scheduled for Wednesday.
The project included an overhaul of the company’s flow management system. The combination of more space and efficient procedures will enable the airline to handle more cargo — including for other airlines — with faster turn times, officials said. The upgrade created more room for pharmaceutical storage and plugs for refrigerated containers.
AFKLM got rid of high-maintenance, polluting equipment and is converting to all-electric equipment, including ball deck systems for storing and moving pallets. LED lighting has also been installed in the warehouse, said spokesman Gerard Roelfzema via email.
AFKLM paid for the $5.5 million project but is getting rental credits from the city for upgrading the facility, he said.
The facility processes cargo for Air France and KLM wide-body passenger flights that operate six times a week for each airline, as well as six weekly Air France freighter flights and one weekly Martinair freighter flight.
Worldwide Flight Services provides labor for loading, unloading and sorting freight at the facility for Air France/KLM and subleases a section to handle cargo for its own customers.
Click here for more FreightWaves stories by Eric Kulisch.
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