September 8, 2009

O'Hare to get competition?

A site just 40 miles from O'Hare International might not sound like the best place to build a cargo airport. But that's not stopping officials in Will County, Ill.

By Mitch Mac Donald and Mark B. Solomon

"Build it and they will come" has long been the mantra of developers and politicians looking to transform unused (or underused) space into showplaces of trade and commerce—not to mention hotbeds for jobs. But the optimistic burghers of Will County, Ill., 40 miles southwest of Chicago, don't seem to think they'll have much of a wait. To hear them tell it, the people and the commerce don't have to come. They're already there.

The state and county plan to develop a cargo airport as part of an ambitious multimodal transport complex that will include up to four intermodal rail yards, access to three interstate highways, and up to 135 million square feet of industrial warehousing and distribution space, 20 percent of which currently sits vacant due to the economic downturn.

There is one major obstacle, however: One of the world's most established cargo airports, O'Hare International, sits only 40 miles away.

State and county officials seem unfazed. As they see it, the "South Suburban Airport" will offer a compelling alternative to O'Hare, with its lower airline landing fees, less-congested airside and landside operations, and convenient connections to Interstates 55, 57, and 65 as well as to intermodal rail services. "Our point of distribution is more friendly than O'Hare's," says John Grueling, president and CEO of the Will County Center for Economic Development.

The new airport's backers believe the two airports can thrive despite their close proximity to each other. "We are not going after the folks at O'Hare," says Dr. Susan Shea, director of the Illinois Department of Transportation's aeronautics division.

Olympic dreams
Not everyone shares their optimism. Dan Muscatello, managing director, cargo and logistics for Cincinnati-based airport planner and developer Landrum & Brown, says a new airport so close to O'Hare would have a tough time attracting new business or diverting traffic from the older facility. O'Hare has a well-established base of airlines, truckers, and freight forwarders that would be loath to pull up stakes and move down the road, Muscatello says. Nor would international airlines with all-cargo operations, like Korean Air, be inclined to split their passenger and cargo flights between two airports, he says. And any advantage South Suburban may have in terms of landing costs and ease of access would be more than offset by the significant volume-based discounts that shippers and forwarders get by tendering large quantities of freight at a "gateway" airport like O'Hare, he adds.

What's more, O'Hare is about to shed its reputation for being short on cargo space. It is currently adding 750,000 square feet of airside cargo space, including 18 additional parking spaces for freighter aircraft. When the project is completed, O'Hare will have 45 freighter parking spaces, the same as at Los Angeles International Airport, according to Muscatello.

Gary Schultheis, senior vice president airfreight, North America for Deutsche Post DHL, the world's largest air forwarder, was succinct in his opinion on the necessity of a second cargo airport in the region. Asked if one is needed, Schultheis replied in an e-mail: "Not really."

State and county officials are banking on continuing growth in commerce and population—Will County is Illinois' fastest-growing county—as well as the multimodal nature of the project to carry the day. They also point to the success of Rockford, Ill., about 70 miles from Chicago, where UPS operates a thriving regional air-cargo facility. Rockford demonstrates that the greater Chicago market is big enough for more than one cargo airport, officials say.

The South Suburban project is still in the early stages. According to Shea of IDOT, the state has purchased roughly half the land needed to construct the first runway and terminal. It has also begun condemnation proceedings to acquire raw land for further expansion. The state has started filing the necessary paperwork with the Federal Aviation Administration and has solicited the support of Transportation Secretary Ray LaHood, a former Illinois congressman.

Shea declined to specify a target date for completion but said the state would like to have the airport up and running no later than the 2016 Summer Olympics. Chicago is bidding for the 2016 Games.

About the Authors

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has over 30 years of experience in both the newspaper and magazine businesses. He has covered logistics issues for 25 years. Named one of the Top 10 Business Journalists in the U.S. in both 1995 and 1996, he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC Velocity and CSCMP's Supply Chain Quarterly.

More articles by Mitch Mac Donald
Mark B. Solomon
Senior Editor
Mark Solomon has spent 25 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. Mr. Solomon graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

More articles by Mark B. Solomon

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