Competition for air cargo business is heating up as a large terminal for freight aircraft is planned at Milwaukee Mitchell International Airport, in an attempt to poach some traffic from Chicago O’Hare International Airport, the dominant cargo hub in the region.
The strength of Milwaukee’s economy is promising, project developers say, but capturing shipments from an international gateway like O’Hare will require more than just a new terminal, according to an expert familiar with the matter.
Dallas-based Crow Holdings, a real estate investment and development firm, announced earlier this year that it will develop and operate a 288,000-square-foot logistics hub at Mitchell International.
The firm is hopeful its development can attract airlines and logistics companies interested in fast access to the Chicago market for a lower cost than at O’Hare – and without the chronic congestion – as well as those interested in tapping into southeast Wisconsin’s growing industrial base.
“Milwaukee is uniquely positioned with its long runways capable of accepting Class V widebody aircraft, strong employment base, much cheaper operating costs and extensive existing logistic infrastructure around the airport with a lot of excess capacity,” said Jack Rabenn, vice president of Crow Holdings’ industrial team. “This perfect blend of traits is not found at any other airport in the region and allows for carriers to service the same clients they serve out of O’Hare, while simultaneously broadening their service locally in southeast Wisconsin.”
New facility in the works
Plans for the logistics hub at Mitchell are still moving ahead but have been delayed due to the Federal Aviation Administration and other airside considerations, developers said. Crow Holdings is aiming for a mid-2024 construction start, followed by an 18-month construction timeline.
Called the South Cargo Logistics Hub, the facility will be built on a 41-acre site at 300 E. College Ave., on the southern end of the airport.
The land was used by the 440th Airlift Wing of the U.S. Air Force Reserve from the mid-1950s until 2010, when the base was closed and the property was deeded back to Milwaukee County, which has been marketing the property as the MKE Regional Business Park.
The on-tarmac air cargo facility will be available for lease by a single tenant, or multiple tenants. With high ceilings and a wide footprint to facilitate storage and sorting, according to developers, the building will have 74 docks and 99 trailer stalls.
FedEx, UPS, USPS and DHL currently have air cargo operations at Mitchell International, according to an airport spokesperson.
“The relative decrease in passenger travel at MKE, combined with comparatively limited existing cargo operations means that there is a lot of excess capacity at the airport to handle the large increase in air traffic that this project is poised to bring,” Rabenn said.
Sandi Siegel, president of M.E. Dey & Co., a Milwaukee-based freight forwarder and customs broker, said that almost all of its clients in southeast Wisconsin are sending their air cargo through O’Hare because of its larger capacity and more frequent international flights.
But she agreed that getting cargo through O’Hare can be quite challenging.
“At some of the terminals in Chicago, the lines are extremely long for the truckers to wait to pick up the cargo, it might not be available for pick up after the plane lands for a day or several days because some of these terminals get so backed up,” Siegel said. “It’s very frustrating for the customer who’s paid a premium on air freight to get it here.”
Growth forecasted
Siegel said she welcomes a new cargo facility at Mitchell International, but said there needs to be support and coordination to make it successful.
“We can build the terminal here, but we have to hope that we’ll be able to get some service here and get some of the carriers on board,” she said.
The airport master plan for Mitchell International says the growth in e-commerce volumes will drive increased use of dedicated cargo jets there. A study conducted for the airport forecasts 3.7% annual compound growth to reach 364 million pounds of cargo in 2040.
But air freight has been decreasing at Milwaukee Mitchell in recent years. In 2018, 168 million pounds of cargo came through the airport. In 2022, that number had dropped to 155 million pounds.
The airport master plan says that the addition of a new cargo facility will support the forecasted growth.
The airport and Crow Holdings’ aligned interest in growing cargo operations in Milwaukee has helped to forge a strong partnership between the two, said Rabenn.
“I was born and raised in Milwaukee and am very familiar with the airport and broader region,” he said. “The potential for an economic boom in this region is very real – it just needs a little push to kick things off. We believe this air cargo expansion is that catalyst.”
