Miami International Airport near cargo ceiling, expansion plans take off

As Miami International Airport became the leading airport in the US for international cargo in 2021, at least five of the 42 cargo airlines have ambitious plans for expansion that would increase cargo capacity in the next five years.

The airport currently has 2.8 million square feet of cargo warehouse and storage. Staff is working with major international cargo carriers to continue to attract service to the airport, Emir Pineda, trade & logistics manager for the Marketing Division of the airport, confirmed.

“We have a lot of them here already; there’s still a few out there that could potentially start serving here and we’re having some further discussions with them, in addition to talking to carriers that are already serving here and growing or expanding their service,” he added.

In 2021 the airport (MIA) processed 2.74 million tons of cargo, a double-digit annual increase of over 17%, according to a memorandum released by the Aviation Department in late May.

January to March statistics show an added 8% growth in air cargo at MIA this year compared to the same period last year, the document says.

The airport now has about 2.6 million square feet of dedicated warehouse area for its cargo airlines, with a capacity estimated at 2.6 million to 3.0 million annual tons of cargo. A forecast by a consultant to the department projected that by 2031 MIA will reach 3.7 million tons of airfreight, and 4.9 million tons in 2041.

“We think over the next two years, maybe sooner, we’ll reach the capacity level; we are projecting this year to probably surpass the 2.7 million tons,” Mr. Pineda said.

But even though the airport has a $5 billion capital improvement program for 2025 that would, among many things, expand aircraft parking positions and warehouses for cargo operations, the forecasts estimate that those enhancements won’t be enough. The airport is already taking steps in the short term to adapt to an increased demand and not lose its leading cargo ranking.

For instance, in March county commissioners authorized the department to negotiate with CR USA Airport Management Inc. and AIRIS USA LLC for a lease agreement for construction of the “Vertically Integrated Cargo Community” (VICC) that is to nearly double MIA’s cargo capacity within five years.

The project is a five-story, 1.7-million-square-foot, state-of-the-art cargo handling hub that would have an annual capacity of 4.5 million metric tons.

It’s expected to be completed by 2027, create 3,000 permanent cargo operation jobs, and have a $2 billion private investment – with no public money required, a presentation from the aviation department details.

A document with the proposal submitted to the county, to which Miami Today had access, shows that the structure is to be built on 29.4 acres of MIA land within the Western Cargo Area, and the facility would reduce truck trips by 50%.

Peter Reaveley, MIA’s former director of international planning and a 30-year career airport official, said he would expect the vertical facility to use the latest technology in cargo handling, with every item having a radio frequency identification chip fastened to it, which is a technology similar to what Amazon and the Hong Kong airport use to track packages more efficiently.

“This [project] will serve to future-proof our position as one of the premier cargo airports and airports in the world when it comes to an overall tonnage,” said Ralph Cutié, MIA’s director, at the 2022 SMART Trends Transportation Summit hosted by the Transportation Planning Organization (TPO) this month.

“Right now, we’re number one [nationally] and number nine [in the world for international freight], and the ultimate goal is to solidify that number one [national] ranking and to take that number of nine world ranking and move it into the top five. That’s our ultimate goal,” Mr. Cutié added.

DHL Express announced last November that it was investing $78 million to renovate and expand its existing hub at the airport to strengthen the company’s connections and service capabilities, with added flights to and from Europe, Asia Pacific and South America, a press note from the company details.

The investment resulted in state-of-the-art equipment for a fully automated package sorting system and doubled its warehouse capacity to 206,000 square feet.

Only one month later, FedEx completed a $72.2 million expansion in its MIA hub that added more than 138,000 square feet to the main sorting facility, bringing it to more than 282,000 square feet.

The enhancements included a new customs clearance area and a new 70,000-square-foot cold chain facility with multiple rooms ranging from -13 degrees Fahrenheit to 77 degrees Fahrenheit to accommodate growing demand for transportation of perishables such as flowers, food, pharmaceuticals and therapeutics, the company detailed in a statement.

The memorandum from the Aviation Department details that it is in conversations with two major cargo partners, Atlas Airlines and the Florida East Coast Railway, which have presented conceptual cargo master plans to MIA for review.

Other factors are also expected to put pressure on the cargo growth at the airport. Many more passenger aircraft are now being converted to freighters, Mr. Reaveley said. In 2019, for instance, there were about 80 passenger freighter cargo aircraft conversions, while nowadays there are 120 to 130. He estimates that by 2025, there will be 180 conversions. Commercial Jet, a Miami-based company, is working in the region contributing to those conversions.

In addition, Mr. Reaveley said, Boeing is producing more than 70 new Boeing 767 and 777 freighters every year. By 2025-2026 there would be 750 additional freighter aircraft in service in the world. “If you assume that a third of them operate by the Transatlantic, Transpacific into MIA or [from] MIA down to the Caribbean and Latin America, that’s still 250 aircraft a year more coming into MIA five years from now,” he said.

An increase in e-commerce has also fueled the expanded cargo demand at the airport, and it’s a trend that will remain. “E-commerce continues to grow, which means that our cargo operations will continue to grow and our tonnage are going to continue to grow,” said Director Cutié.

Back in 2018, the airport gained final approval from the US Department of Commerce to designate Miami International Airport’s entire 3,230-acre land parcel as a Foreign Trade Zone (FTZ) magnet site.

Airport tenants can operate their cargo facilities, warehouses and distribution centers on the airport property and have the federal tariffs deferred, reduced or eliminated. “This has been one of the most important factors in the growth of MIA connecting international cargo,” Mr. Reaveley said.

The airport currently doesn’t have a Free Zone Operator within the Foreign Trade Zone, but it is working on getting one within the next month, Mr. Pineda confirmed. “Within a month or two somebody will actually be operating the first Foreign Trade Zone inside Miami airport.”

International regulations set by the International Civil Aviation Organization only allow passenger airlines of each country to operate between their country and another country, whereas cargo airlines can operate between multiple countries. “This helps the international trade internationally and cargo freighters at MIA tremendously,” said Mr. Reaveley.

As passenger airlines go back to pre-pandemic numbers, more wide-body aircraft are expected to carry again 20 tons or 30 tons of cargo in addition to passengers, Mr. Reaveley added.

“MIA isn’t just a cargo airport; it’s a cargo airport which forms the center hub of a complete international trade logistics system,” Mr. Reaveley said.

“That’s how it really needs to be thought of.”