Two things have been making headlines about Chicago O’Hare International Airport (ORD) lately: cargo operations and sustainability efforts.
Ranked No. 1 in cargo value and No. 6 in cargo tonnage in the United States, ORD is a critical hub in the global supply chain. But the airport is also earning recognition for its forward-thinking approach to environmental responsibility
Within the industry, the Chicago Department of Aviation is seen as a leader in sustainably airport development, thanks to its $6 billion O’Hare Modernization Program and pioneering Sustainable Airport Manual. Initiatives like the Airports Going Green conference, launched in 2007, further highlight its dedication to environmental efforts.
When it came time to expand cargo operations, ORD faced space constraints. Cargo activity on the airport’s south side was rapidly reaching its limit. But the solution wasn’t solely about expanding capacity; it also needed to be consistent with ORD’s sustainability policies.
Airport officials developed a plan to use 65 acres on the northeast side to achieve both objectives. The phased development would eventually add 900,000 square feet of cargo capacity, 13 new parking spaces for jumbo 747-8 freighters, and a fuel farm—all designed with sustainability in mind.
Adam Rod, assistant commissioner of Cargo Operations and Development at the Chicago Department of Aviation, emphasizes that the initiative is about more than just physical space.
“The project brought us to 2 million square feet total on the airside and 2 million square feet on the landside, of which the northeast operation comprises about 900,000 square feet,” he details. “It also was an opportunity for us to use the most innovative sustainability techniques and tactics available.”
Commissioner Jamie L. Rhee notes that the state-of-the-art cargo facility not only reinforces ORD’s position as a global leader in air transportation but also highlights the Chicago Department of Aviation’s steadfast commitment to sustainability and inclusive economic growth.
“By expanding cargo capabilities and integrating innovative, environmentally responsible practices, we are enhancing international trade while creating significant opportunities for local businesses and workers,” says Rhee. “Notably, this project serves as a remarkable example of the CDA’s work to empower small, diverse businesses of all sizes, building both capacity and equity in our community. This achievement demonstrates the transformative power of thoughtful investment and collaboration.”
Leasing Arrangements
To get the project rolling, the Chicago Department of Aviation issued a request for proposals (RFP) to find a developer for a public-private partnership involving a long-term ground lease.
Realterm, formerly known as Aeroterm, promptly seized the opportunity to join the ambitious project. The company operates at 37 airports across North America and has had a presence at ORD since the 2000s.
“We are known in the cargo business as the largest air cargo owner, operator and developer; so when the RFP came out, we felt like the right partner for the airport,” says David Rose, managing director – senior fund manager of Realterm’s Airport Infrastructure Division. “We knew there was pent-up demand at O’Hare that wasn’t being met.”
| facts&figures
Project: New Air Cargo Development Location: O’Hare Int’l Airport, in Chicago Approx. Cost: $43 million Funding: Airport revenue Facility Size: 132,000 sq. ft. Key Components: 122,000 sq. ft. of warehouse space, including cold chain storage; 10,000 sq. ft. of office space Tenant: Realterm Subtenant: Worldwide Flight Services (air cargo logistics provider) Ramp: 200,000 sq. ft. (room for 2 Group VI aircraft) Capacity: Ramp can accommodate up to 12 jumbo freighters/day & process 100,000+ metric tons of cargo/year Key Benefits: Added infrastructure to meet demand for more cargo operations; new cold chain warehouse capabilities |
Realterm ultimately won the RFP to develop all three phases of the northeast cargo expansion project. Amber Ritter, chief commercial officer at the Chicago Department of Aviation, played a crucial role negotiating and securing approval for the Phase III lease from the Chicago City Council. “It’s been an ongoing living project from the legal perspective to get the leases aligned with our goals,” she says.
Unlike ORD’s south side cargo facilities, which were designed for multiple owners and multiple users, the new northeast side development is overseen by one manager (Realterm) but designed for multiple users.
“All the users in these facilities are subtenants of Realterm,” Ritter explains. “That’s a little bit different profile, as it has shifted from airlines being the tenant with the airport to large-scale developers.”
In this case, the lease is between Realterm and the city of Chicago. Realterm develops and maintains the buildings, and subleases them to airlines or ground handling companies.
According to Rod, this model will likely become the new standard practice at ORD. “Our next round of cargo development will work the same way,” he reports. “It works pretty efficiently because the developer can rely on handler contracts to help them.”
Three Phases
“Cargo isn’t a ‘build it and they will come’ type of business,” Rose explains. “It requires collaboration between airlines, cargo handlers, freight forwarders and integrators to grow a successful cargo network. Phasing a cargo project is essential. You don’t want to flood the space too quickly.”
Ritter agrees, noting that the three phases of ORD’s project were completed as demand/need arose.
The first two phases were launched in 2008, after Realterm was selected as the developer. Projects included:
- 785,000 square feet of cargo warehouse and office space
- 110,000+ square yards of apron pavement
- 11 parking spots for 747-8s
- ramp services like power and fuel
- 2,200 feet of taxiway
- new cargo access road
- relocating an existing roadway
- utility extensions
- 180 truck dock positions
- truck circulation area
- nearly 700 employee parking spaces
The first two phases opened in 2016 and 2017, respectively. By 2019, the airport was already showing signs it was time for Phase III.
Growth in cargo tonnage has been impressive, up 20% from 2019 and 10% more in 2023. “In 2019, we handled just under 1.9 million tons,” Ritter says. “By 2023, we reached 2 million tons, and we estimate this year’s total will hit 2.2 million. The growth is ongoing. Strengthening our cargo capabilities was crucial. This is a significant economic driver, not just for the airport but for the entire region.”
Cargo value was also up, reaching No. 1 in the nation, adds Ritter. “During the pandemic, our cargo value even surpassed the Port of Los Angeles. Today, our cargo value is around $300 billion annually,” she reports.
The third and final phase of the northeast cargo campus opened for operations in 2023, and Realterm finished the final punch list in 2024. ORD officially celebrated the final completion in August 2024.
Realterm turned over the 132,000-square-foot facility to Worldwide Flight Services, one of the largest air cargo logistics providers in the world and a leading provider of ground handling services.
The new facility equips the company with 122,000 square feet of warehouse space and 10,000 square feet of office space. Airside, there is more than 200,000 square feet of ramp space—enough to simultaneously fit two Group VI aircraft, such as Boeing 747s. Overall, the new ramp can accommodate up to a dozen jumbo freighters per day and process more than 100,000 metric tons of cargo per year.
The building subleased by Worldwide Flight Services features a sophisticated cold chain storage facility that can be used for temperature-sensitive pharmaceuticals and food.
The long-term vision for cargo expansion on the northeast side spans 65 acres and includes 900,000 square feet of additional cargo capacity.
Navigating Challenges
All phases of the northeast cargo development reside on land that once housed an old military base after World War II. After the military abandoned the base in the 1990s, the area was used for other purposes.
That meant Realterm had to empty and demolish all structures on the property before developing the site for a new facility. Then, it had to convince companies already operating on the south
side of the airfield that cargo operations on the northeast side made sense.
“In the cargo business, where every minute matters, users were hesitant to move into a whole new area,” Rose says. “That’s where phasing the project really helped. We had already proven that it would work, so by the time we moved forward with Phase III, we had several groups interested in the facility.”
Though operations on the northeast side have expanded, Rod stresses the south side is still used for cargo, too. “There is a large cargo ramp on the south side of the airfield with many airline tenants, including Federal Express and United,” he says.
With groundbreaking for Phase III occurring in 2021, the project encountered challenges associated with the COVID-19 pandemic. Realterm had to navigate supply chain disruptions, fluctuations in material prices, and logistical and shipping challenges.
“Because of our history with O’Hare, we were able to deliver a project where the airport and WFS (Worldwide Flight Services) were very happy,” Rose says. “There were construction issues due to COVID, so every project at that time had complications. But because we have delivered projects at many airports, we were comfortable finding solutions that worked for all parties.”
A Focus on Sustainability
The project team targeted LEED Silver certification for the Phase III cargo facility, and expects to receive it soon. The facility is equipped with solar panels, recycling areas, an on-site trash compactor, LED lighting and charging stations for electric forklifts.
Earlier phases of the cargo expansion added stormwater management innovations, water conservation measures and an efficient hydrant fueling system.
This fall, Realterm installed 2,500 solar panels on the roof of its new facility. Once operational, the panels will produce 1.25 kilowatt hours of electricity per year to help offset the facility’s energy use.
Rose says similar efforts will continue, as the airport and local government have lofty sustainability goals for the future.
“We want to be a resource and a leader to help support those goals,” he adds. “We are at stage one for most of the modernizations we’re working on now, and we will continue to manage those upgrades and efficiencies for the future. We call it future proofing. In other words, how do we set up these facilities to handle the power needs of this facility and the airport for the future?”
Win-Win-Win-Win
Rose notes that Realterm works to develop “win-win-win-wins” that work for four key stakeholders. He explains that each project needs to generate revenue and grow air cargo for the airport, create an efficient facility for end-users, allow Realterm to amortize its costs, and benefit the local community.
The final northeast cargo project meets all of these goals, he continues. ORD and Worldwide Flight Services have a modern, efficient building. Realterm has a satisfied tenant, whose rent offsets construction costs. And the local community has seen job growth.
More than $23 million of the project’s $43 million cost—55%—was spent with minority- and women-owned businesses. In all, the project created 340 full-time construction jobs and another 180 full-time permanent jobs at the completed facility. More than 2,200 cargo-related jobs were created in total over the course of all the projects.
“This cutting-edge cargo facility cements ORD’s position as a leading global shipping hub while stimulating job creation and economic growth in the region,” Rose concludes. “We are proud to be part of the team inaugurating new avenues for international trade connectivity and inclusive contracting that will benefit the local economy for years to come.”
And when expansion is needed, Rod says the airport will be ready.
“We are always in the planning stages for the next expansions,” he remarks. “We never want to be stagnant. We want to continue to grow to meet peak demand.”
