Framed by a historic UPS delivery van and a modern UPS delivery truck, UPS officials, Cedar Rapids leaders and Eastern Iowa Airport officials held a groundbreaking ceremony for a new 40,000-square-foot air cargo handling facility on Sept. 25. PHOTO ED KEMPF-IMPACT PHOTO/JOE PHOTO 

 

By Dave DeWitte
dave@corridorbusiness.com

An expanded UPS presence at the Eastern Iowa Airport will enhance Cedar Rapids’ growing profile as a logistics hub as it brings more jobs, investments and revenues to the airport, officials said at a Sept. 25 groundbreaking.

The Eastern Iowa Airport (CID) is investing $10.2 million to construct a new 40,000-square-foot cargo facility that will be leased to UPS on a newly completed cargo apron. The airport’s combined investment in the apron, the facility and associated infrastructure totals about $27 million. Funding for the projects came from CID and the Federal Aviation Administration.

“This is about positioning the airport for future growth in air cargo, and also for growth at the terminal,” Airport Director Marty Lenss said. The additional UPS capacity, the nearby industrial parks and the airport’s Foreign Trade Zone designation all together provide a stronger draw for logistics companies looking at Cedar Rapids, he added.

The airport built the cargo apron, as long as three football fields, partly because of expanding air cargo volumes moving through the airport due to e-commerce and demand for next-day delivery. CID handles nearly half of the air cargo moving through Iowa, and cargo volume is growing at a strong clip.

Cargo volume isn’t the only reason for the new apron, however. The airport commission is also trying to move its air cargo carriers to reduce congestion around the passenger terminal, caused by growing traffic and larger jets. Moving the air cargo operations to the west will make room for more passenger flights.

The airport has long-term plans to develop a new facility near the apron for DHL, which has been increasing its air freight volumes at CID, at a later date. FedEx, the airport’s other main air cargo carrier, has a facility close to the apron. Stephanie Dexter, UPS Northern Plains District president, said the project is part of a multiyear plan to transform and grow the company’s network. She said UPS’ use of air freight is increasing, driven by online retail and next-day delivery.

“As e-commerce continues to radically shape and reshape how companies serve their customers, we see greater opportunities with the smaller and medium-sized businesses and cross-border shipping,” Ms. Dexter said.

UPS plans to add 44 new air cargo jets to its fleet by 2022, Ms. Dexter said, which will make room for about 10 million pounds of additional cargo capacity to its system. Eleven cargo jets were added in 2019, adding 2.5 million pounds of extra capacity.

The carrier employs about 60 at what it calls its CID Gateway, unloading, sorting and reloading parcels for transfer to trucks for ground transit. It brings in about three “brown tail” air cargo jets into CID daily, both unloading and loading parcels. Smaller “feeder” craft also land at the airport to speed time-sensitive UPS parcels from CID to other regional airports.

“When you see UPS turning a jet, it’s a piece of art coming together,” Ms. Dexter said, referring to the precise coordination of the parcel flow.

The airport and UPS collaborated closely on the design of the new building. UPS has signed a 10-year lease, with options to renew for another 20 years. In addition to lease payments for the facility, the airport generates revenue from the company through landing fees based on landed weight of the aircraft.

UPS will be making a significant investment in automated sorting equipment at the new facility, but did not have an estimate of its value. It’s unclear at this point how many new jobs will be created by the facility expansion, Ms. Dexter said, although higher volumes will require more staffing. Currently, UPS is hiring locally for about 300 part-time jobs handling higher package volumes for the holiday season. CBJ