CHAPTER 4 AIR CARGO FACILITY ANALYSIS 58 CHAPTER 4 AIR CARGO FACILITY ANALYSIS 1. INTRODUCTION ...............................................................................................................60 2. CAPACITY CONCEPTS ....................................................................................................63 2.1 Capacity Impact ..........................................................................................................64 2.2 Infrastructure Strategy ................................................................................................65 3. FACILITY REQUIREMENTS ..............................................................................................69 3.1 Total Land Area Requirements ...................................................................................69 3.2 Functional Area Space Requirements .........................................................................70 3.3 Cargo Operator Type ..................................................................................................71 3.4 Air Cargo Buildings .....................................................................................................73 3.5 Aircraft Parking Positions ............................................................................................74 3.6 Landside Effectiveness ...............................................................................................75 4. OPERATIONAL CONSIDERATIONS .................................................................................77 5. LAYOUT PLANNING ISSUES ...........................................................................................79 5.1 Land Use Issues .........................................................................................................81 5.2 Space Optimization Solutions .....................................................................................84 5.3 Design Consideration ..................................................................................................87 59 1. INTRODUCTION The purpose of the Air Cargo Facility Analysis section is to identify trends in the air cargo industry that have had an impact on facility development, identify what those impacts are, and recommend changes to the standards for developing facilities. Many of the changes may result in the demand for additional land, which is a scarce commodity at many airports. As such, this section also describes techniques for better utilizing existing airport land. Finally, this section addresses operational and capacity management issues relating to facility development. Like passenger terminals, parking garages, and runways, the development of air cargo facilities generally follows a process. Due to the somewhat unique nature of the air cargo market, this process can be more complicated than that for other airport facilities, however, the development process can be generally defined for an airport operator by answering six questions. What is the cargo market at my airport? The first phase of any cargo development program should include a market assessment to establish geographic market size and growth. If the results are favorable, subsequent phases would include selection of target markets and market surveys. The term cargo market does not just refer to the potential for the flow of goods (the operating market) but also pertains to the potential for cargo facilities at an airport (the leasing market). It is very important for an airport operator answering this first question to develop a strategy for determining air cargo facility capacity. How do I develop the market? Once the cargo market is identified, the next step is to determine a strategy to develop that market. The best way to develop the market is to survey the people who are involved in the movement of goods into and out of the community. This includes in addition to the carriers, air cargo associations, freight forwarder and customs broker associations, trucking, major manufacturers, Chambers of Commerce, and Economic Development organizations, which are all very good sources of information about what is entering and exiting the local marketplace. Due to competitive concerns, the information will be somewhat general but it will still provide the necessary input to determine the existing market and areas of potential growth. Developing the market brings into play the “chicken and egg” scenario. The forwarders say that they will generate the cargo if the service is available and the carriers say that when the cargo exists they will provide the service. To develop the market requires bringing the two elements together to overcome this barrier. How do I sell the Market? Selling the market requires convincing the airlines and other cargo operators that there is a profitable opportunity for them to commence service to your market. Preparation of presentations showing volumes of existing cargo along with growth potential, the benefits of using your airport, the availability of facilities and infrastructure, andthe support of the forwarder community is important. Some airports are offering incentives to new entrants but keep in mind thatthe FAA requires that incentive programs be offered in an equitable manner available to all carriers. What are the facility requirements? Once an airport operator has a general understanding of the cargo market and how to develop it, the next step is to identify the location, type and size of facilities needed to satisfy the market demand. This should include existing and projected future demand. 60 Do I have the right facilities? Having the right types of facilities means: • Having an adequate supply of cargo buildings, staging, storage areas, landside infrastructure, and apron in the optimal location. • Understanding the mix of carriers, and the support services required by the entity to which the facility could be leased, and the warehousing, office, and GSE space as well as the landside and aeronautical infrastructure they require for cost-effective operations. • Determining the appropriate throughput for the potential tenants and users of the facility. • This phase of the development process usually includes a site selection study for future air cargo facilities. Once a site has been selected, the best layout of facilities on the site is determined. Cost estimates are then developed for the final cargo facility layout. How do I develop the right facilities? This phase of the facility development process involves determining whether the airport operator undertakes the project itself or contracts the development to the private sector, including the financing of the proposed development and the design/construction of the facilities. The airport also must decide how the new cargo facilities will be managed and operated. Two figures are provided to show the general air cargo facility development process. Figure 1 is a summary of the six questions identified above, and also outlines the marketing aspects of air cargo facility development. The marketing process is covered in detail in other sections of this Guide. The facility development process is covered in this section. Figure 2 depicts the facility development process in more detail. The air cargo facility analysis provided in subsequent sections follows the development flow outlined in Figures 1 and 2. 61 Figure 1 62 Figure 2 2. CAPACITY CONCEPTS In the past, airports have been consistently late in anticipating and meeting air cargo facility demand. This delay created a very predictable infrastructure crisis. In case after case, a shortage of efficient, properly located, air cargo facilities is preceded by a carrier or carriers expressing a serious unmet need for greater and more efficient space. Efficiency is the key – a cargo facility should be the right size and configuration for the potential market. Today, there is a shortage of air cargo infrastructure and facilities at many airports: at the same time, as the markets shift, it also appears that an overcapacity situation exists at other airports around the country as well. The following discussion outlines various issues to consider depending on individual circumstances. In the past, airports have been consistently late in addressing cargo infrastructure demand while today overcapacity might be more the norm. Almost any airport has the ability to reduce the potential for a capacity crisis. This does not pertain to every airport because there are other factors that can lead to capacity problems. These factors will be discussed later. Cargo facility shortage historically has been more of an issue than excess capacity situations by a significant margin. However, beyond the sheer numbers, shortages create much more severe problems for an airport. Marketing to potential new cargo customers, retaining existing cargo customers and managing operating costs are impacted negatively by facility shortages. These problems will be addressed in more detail later in the analysis. Returning to the earlier comment about the predictability of a crisis resulting from the lack of airport infrastructure to meet growth, it is the "wake-up call" upon which the industry has relied that is the culprit. This call is originated by an anonymous cargo customer and the message is clear: "Our needs greatly exceed available infrastructure at the airport and we seriously require more building space, ramps, truck docks, vehicle parking, GSE and container storage and maintenance areas.” The alarm continues to ring with revelations the