Podcast: Charlotte Douglas International Airport sees cargo opportunity in international growth

Charlotte Douglas International Airport expects its express operations to remain steady while new international passenger services create opportunities to increase belly cargo traffic. The presence of other major express hubs nearby limits the potential for freighter growth at Charlotte Douglas International Airport (CLT), Chief Business and Innovation Officer Ted Kaplan says in this week’s episode of “Cargo Facts Connect,” recorded during a recent site visit. “We’re kind of surrounded by existing national and regional cargo hubs,” Kaplan says. “There likely will not be an opportunity for significant growth with Amazon, FedEx and UPS, given that their networks already have a number of large hubs within relative proximity to our airport.” CLT could support incremental growth by replacing or renovating cargo facilities that were designed for operators twenty to thirty years ago, Kaplan says. “What really came out of [a 2018 cargo study] was where we could significantly improve and possibly expand incrementally,” he says. “The opportunity would be to figure out how to deliver newer facilities that UPS, Amazon and FedEx could transition into and then demolish their old facilities.” CLT has sites that could accommodate new cargo warehouses with airside access if demand materializes. However, the airport would need a long-term commitment from an operator before making a significant investment, Kaplan says. The airport sees more immediate potential in attracting international passenger service that can generate additional belly cargo traffic. For example, Etihad Airways’ new A350-1000 service from Abu Dhabi (AUH), launched in March, has already increased CLT’s cargo throughput, Kaplan says. Tune in to this week’s episode of “Cargo Facts Connect” to hear Kaplan discuss CLT’s express operations, cargo infrastructure and opportunities to expand its cargo business. A transcript is available below. This transcript has been generated by software and some transcription errors may remain. Robert Luke Hello and welcome to another episode of Cargo Facts Connect, the podcast of cargo facts, the publication of record for the air cargo and freighter aircraft industries for over 40 years. I’m Senior Associate Editor Robert Luke, and it's Friday, August 21st. Cargo Facts recently made a site visit to Charlotte Douglas International Airport and spoke with Chief Business and Innovation Officer Ted Kaplan, who discussed the air cargo operations and the airport’s strategy for moving air freight. Take a listen. Ted Kaplan We did a cargo study in 2018, and the big takeaway from that study was is that Charlotte has the the cargo business that Charlotte has kind of fits Charlotte and the market that we are in. It did not recommend that there was significant opportunity for growth, but it saw us sustaining the level of cargo that we had at that time. We're we're we haven't begun, but we are going to refresh that study, given that we're coming, you know, a couple years shy of it being 10 years old, but I would be surprised if the conclusion of any of any update to that study wouldn't more or less validate kind of what we learned in 2018 or warrant an increase of growth. Yeah, I mean, you know, I remember him, you know, the the author of the study telling me at that time that you know, look, kind of, you've got if if you just look at sort of FedEx, UPS, Amazon, the large, you know, cargo operators here. You know, FedEx has a big facility in Greensboro just down the street. They obviously have their their their headquarters in Memphis. UPS is in Louisville. So we're kind of surrounded by existing national and regional cargo hubs. So what they concluded is is that Charlotte, there there won't be an opportunity, or likely will not be an opportunity for significant growth. You know, with Amazon, FedEx, UPS, just given that they their network already has a number of large hubs surrounding us with within you know relative proximity to our airport. You know, so what they recommended at that time is that while they didn't see significant opportunity to add new, what they did see is that the facilities that all of those operators are in today are aged, and that's being generous. And so, what really came out of that was what where we could significantly improve, and possibly such that it would allow us to to kind of expand incrementally, would be to take facilities that were built for cargo operators 20 years ago, 30 years ago, they're just not modern. They're not designed to accommodate a modern cargo business. So the suggestion at that time, and and and we agreed with this wholeheartedly, was the opportunity would be to figure out how to deliver newer facilities that the UPSs and the Amazon and FedEx could transition into and then demo down their old facilities just because they're they're they're they're not past their useful life because all three of those companies are operating out of those facilities today. So we we took that under advisement. I mean that that requires CLT making a pretty significant bet, or it requires one of those companies to come to us and say, "Hey, we we want to partner with you to develop a brand new facility, and you know we're we're going to invest in it and we're going to build it. And they haven't made that move beyond. Like we had some conversations where it's like, "Hey, would you be willing to invest in a either a new facility or a pretty significant renovation, and we'll you know we'll lease it for five years, you know. So the deals would always kind of fall short of, you know, they would want to commit to a certain amount of time, and if we're going to make that kind of investment, we need you know we we need protection for a longer window of time. So you know we we had we've had those conversations over the years, but generally they you know they they operate out of these older facilities and they continue to be successful. They continue to meet their needs. We've taken opportunities to improve the airside elements of their facilities so they are able to use the aircraft they want. In 2018, one of the things we learned, particularly in connection with UPS, is that we we weren't giving them sufficient aircraft parking, so they were having to use suboptimal planes to conduct their business. So we've we've tried to correct things like that over the years, and I think we've we've been successful. We've moved FedEx from smaller, older facilities into a larger, though still old, facility, and I think that's helped FedEx grow and expand into what it's want, and Amazon's just kind of plugged away, you know, in the facility that they've been in since they started here. Robert Luke So, does the I would say comfort level of the express carriers you mentioned utilizing the existing facilities indicate that the growth level for air cargo is kind of where it's going to be at going forward into the future when we look at Charlotte Airport's role in the throughput of movement air the throughput or movement of air freight in this region particularly. Ted Kaplan I I think at this point that that is I think that pretty much sums it up. I think we, like I've said just before you came in, I mean we've had a sort of a steady and really positive relationship with with those operators, and I and I think they are operating at the level that they want. And to kind of take it to the next level is sort of how do we make you know do we make that investment? I think there's an element of kind of speculation to that. You know, it would be us making a bet that if we were to make that kind of investment, that you know it could possibly open up new opportunity. I think the better opportunity would be if we were successful in attracting you know new international service and kind of would add to the belly cargo numbers that we're seeing from American and Lufthansa and Etihad. You know, we're always open with any of our tenants to talk about how to help them grow and expand should they desire to do so. You know, I will say there is there is like back in 2018, one of the problems we had is that there were you know we had limited real estate available. Should they come to us, if FedEx or UPS or Amazon had come to us and said we want to build a purpose-built you know modern warehouse, we've completed a couple of airfield projects since that one component. Those projects was to create, if you know, if the demand was there, some build sites that could potentially accommodate new cargo warehouses with airside access. So I think that opportunity is there, but again, it's like kind of how the investment gets made is a FedEx going to come in or UPS or another. You know, DHL was here at one time. They're no longer, you know, if they were to come in and say, you know, we want to make, you know, we want to make this investment in Charlotte. I mean, that's kind of one scenario, and they would have to determine whether that was in their financial best interest. You know, for Charlotte, it's you know, do we want to take our own resources and and put it into cargo? You know, with the opportunity cost of you know, we wouldn't have that money available for other opportunities, and I think Charlotte is has had a growing and pretty significant commercial air service passenger commercial air service operation. So our you know our our kind of cost benefit, and I use that phrase loosely because we haven't necessarily run a like a formal cost benefit of this, but it's just you know we we we aren't super risky, you know. So and and where we have a large enough passenger commercial air service business that just we haven't seen it as being worthwhile to really kind of dive into that area and take that kind of bet on cargo, and every indication we have is that we sort of have a steady, and that we're kind of where we where we should be, and there's not an obvious kind of right right in front of our face opportunity to to grow that part of our business. Jay Aelick So it sounds like it would be the the existing or potential addition of new passenger operators that might determine Charlotte's cargo strategy going forward in terms of what regions it wanted to target. Ted Kaplan Yeah, I think it would start with you know kind of passengers, and then you know the ancillary benefit would be you know if we if we were to be successful attracting additional international service. I mean, I mentioned Eddie Had that's that's been our most recent. They fly a pretty large airplane, you know, to and from you know between Charlotte and Abu Dhabi, you know. So they've got you know they they're able to take advantage of that belly capacity for that purpose. If another airline were to were to identify Charlotte as as a market they'd like to add to their network, that it would bring along that opportunity, but I think it would be a secondary opportunity to kind of the passenger dimension. Robert Luke So speaking of that, how attractive and or how attractive, from what you know, what you've seen, is Charlotte becoming to some of the other combination carriers in South America, like Latam and Avianca, or even from other carriers in Europe that may be looking at the Atlantas and the Miamis and maybe even the IADs as kind of over congested space and seeing Charlotte as an as a ideal fit for their operations in the Southeast corridor. Ted Kaplan Well, I think I think Charlotte always is able to distinguish itself because of our financial efficiency. I mean that that's always been our calling card. We operate, you know, on a CPE basis, you know, at a significantly more cost-effective standpoint than than any of our peer airports by a wide margin. If I don't have kind of our standard PowerPoint available, but we always have a slide that shows a bar chart with the different CPEs of us and our peer airports. And if the highest CPE is over here, we're always on the opposite end, significantly less than any of our competitors, we're well located, you know, kind of right on the in the middle of of the East Coast corridor. Our airspace is certainly congested. I mean, we're you know a 50 to 55 million passenger airport, but I don't think our air our our airspace is quite as congested as like the Northeast, for example, so I think you know we have a little bit of capacity there, and our airfield is growing. We're adding a fourth parallel runway in 2027, so you know we feel pretty good about our airfield capacity. Robert Luke So just kind of touching base on the Etihad once that flight comes in now, and some of the challenges you guys have successfully over overcame to get that operational. Could that also create a pathway for them to say, okay, because they are a combination passenger and freighter operator, that we want to not only bring in more flights, but we need you guys to be able to handle more of our belly space cargo that's coming in. And it sounds like to me, since you're kind of more or less an express hub for the express carriers right now, would that be something that would require you to either modernize the existing infrastructure that you have to accommodate it, or perhaps even look at the opportunity cost of doing an investment to handle those larger payloads that may come in that belly space? Ted Kaplan I think if that kind of business opportunity came our way, I think you know we would definitely have to weigh the availability of existing facilities to accommodate. I will say one thing that we have done a good job with since we did the the study that I referenced in 2018 is we were a little fast and loose with who we leased our property to in years past. You know, it was it was let we were less strategic, so we in some of those facilities, we went out of leasing to tenants that weren't as kind of aeronautically inclined as they should have been. So that was one of the points that they made in that study, which was a good one, which was that you know some of your facilities are occupied and perhaps not by the best tenants. So since between now and then, we have kind of used expiring leases and just quite frankly better business decision making to eliminate that. So we have weeded out any tenants that don't absolutely need to be in those buildings and whose businesses aren't suited for these particular facilities. So we're we're doing a much better job optimizing the facilities that we do have, but if a major opportunity came our way, I think it would. The conversation would be how do we how do we take advantage of this? Is is it financially worth our while? Is it financially worth the while of you know whichever company you know we were speaking with, kind of how that how that deal would work? What kind of ROI would we need to see in order for us, you know, to make a decision to to invest our money in that kind of deal? We would be careful because that's not that's not the sweet spot of of our business. Our the the focus on of our business is definitely our hub and growing the hub and I think the projects that that serve that that interest first and foremost are what we are what we are most focused on. Rob Luke Okay, and speaking on the addition of the fourth runway, when do you expect that project to be completed? And is the railway system that I saw under being connected is that being connected to the airport, and is that more or less just a passenger rail system, or is it a combination of both freight and passenger? Ted Kaplan It is a pass. It's called the Silver Line. That will actually run along Wilkinson Boulevard, right up, right over here on the other side of this parking deck. That will be passenger light rail and that will come to our front door. Our official entrance is kind of right up here. So the station will be right across the street. It will connect to a people mover that we will be building in advance of that facility, becoming in advance of the light rail becoming available, the more of the the the freight is being handled. Like you know, interestingly, we have a large intermodal rail yard between our westernmost runway and our current center runway that is operated by Norfolk Southern. We moved them there in partnership with the broader city. That facility was in downtown Charlotte, and you don't want a large trucking depot rail depot in downtown Charlotte so. Rob Luke They've got enough congestion down there already. Ted Kaplan So so they move that here. So from a trucking standpoint, like we thought at the time, we were going to have all these synergies between kind of air and rail and truck, because we also are pretty well located when it comes to highway access. I mean, you've got, you know, 85 is, you know, you could throw a baseball and you're hit at I-85 right up there. You've got Billy Graham and 77. You've got 485. I mean, all of these are, you know, within they're easily accessed. So the trucking operations work well in this area. So when we located the intermodal there, it uh you know it's been highly successful for Norfolk Southern. There just hasn't been a lot of synergy between the intermodal yard and the and the and the types of cargo that the airplanes carry. Okay, they carry big stuff. They seem to really carry big stuff, not the not the cargo that is held in the bellies of these airplanes. Rob Luke Okay, that's fair. Thank you. Jay Aelick Is it alright if we circle back to Amazon for just a second? So I was wondering if e-commerce is still growing at Charlotte, and if it's growing at the same, roughly the same rate as it as it was, you know, for the last couple of years. We also saw that just more broadly, total throughput was increasing about 10% year over year for the last couple of years. If those things are staying, Ted Kaplan I could not tell you kind of what Amazon's business broadly is doing. I can only tell you that they remain. I mean, and I know I'm kind of I'm kind of on a loop, but they they just have been consistent. Their operation has not shrunk; it has not grown. You know, there might be some incremental growth, but not not largely. The the the needle mover recently has been adding in Etihad and the belly cargo they carry. But so I you know from what from our lens, you know, we continue to work with Amazon more or less at the at the level, you know, that they've always operated here. We talk, you know, we talk to them all of them regularly, but in terms of you know the the feedback we get from them is usually like we feel pretty good about kind of where we are and and the level that we're operating in Charlotte, and we'll let you know if something changes. I appreciate that. You know, for us, we we acknowledge we want to provide them with the facilities that help them run their businesses as best as they can. You know, but kind of how we go from where we are today to whatever's next. You know that's that's the the going to be the question for us and for them. Robert Luke That was Ted Kaplan, Chief Business and Innovation Officer at Charlotte Douglas International Airport, speaking with Cargo Facts during our recent site visit. And that’s all the time we have for today. For more coverage of the freighter aircraft market, visit cargofacts.com. Thank you very much for tuning in, and join us again next time. Subscribe to Cargo Facts Connect on iTunes or Spotify , or download the episode on Transistor . Cargo Facts Symposium 2026, the premier event for the freighter aircraft and air cargo industries, will take place in Nashville, Tenn., on Oct. 21-23. Find out more and register by Sept. 4 to take advantage of early-bird pricing.

Podcast: Charlotte Douglas International Airport sees cargo opportunity in international growth

‘Cargo Facts Connect’ talks with Chief Business and Innovation Officer Ted Kaplan about CLT’s cargo market, infrastructure

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