Philadelphia Airport, in effort to bolster shipping, buys more land

A massive, mostly vacant land parcel beside Philadelphia International Airport could become a bustling shipping hub for everything from medicine to car parts under a plan to develop the site into a new air-freight complex serving a swath of the northeastern United States.

The airport last month acquired control of the so-called Henderson Tract, which sprawls 135 acres  — an area similar in size to  the entire King of Prussia Mall and its parking lots — to the immediate west of its passenger terminals.

The move caps a years-long battle over the fate of the property in Tinicum Township, Delaware County, and is a first step by Philadelphia toward cashing in on its location among some of the nation's biggest population centers in hopes of becoming a major air-freight power.

Up for grabs could be an estimated $50 billion in air-cargo business generated in the Philadelphia region, all but 9 percent of which is now lost to airports to the south, in Baltimore and Washington, and to the north, in New York and Newark, N.J., because Philadelphia doesn't have the capacity to take it on, said James Tyrrell, the airport's chief revenue officer.

Despite its name, the area to the northeast of the Henderson land known as Cargo City is mostly used for purposes other than shipping, such as American Airlines Inc.'s catering facility, Tyrrell said.

"We have not been involved, for all intents and purposes, in the cargo business," he said. "And we want to get involved."

The city took possession of the Henderson property on Jan. 19 for $54.5 million in compensation after settling litigation over past efforts to condemn the land for airport use, an airport spokeswoman said.

The city could wind up paying more to the property's former owners, the Henderson Group development company and related entities, if a panel to be convened by the Delaware County Court of Common Pleas determines that its fair market value is higher.

Henderson representatives have in the past accused the city of trying to acquire the land, undeveloped but for two now-vacant industrial buildings, for less than its actual value. Henderson Group spokesman Kevin Feeley declined last week to comment on the deal with the city.

The land's acquisition — like all airport activities — is being financed through fees paid by airlines to use the facility, as will its redevelopment at a cost that is yet to be established, Tyrell said.

Tyrrell said that it was not yet clear what form the air-cargo facility would take but that there appears to be demand among shippers for facilities with space to park planes near warehouses for easy loading and unloading.

A mid-January workshop held to present the site to potential future users was attended by representatives of FedEx Corp. and of Amazon Air, the growing air-shipping subsidiary of the e-commerce giant with a hub in Hebron, Ky., near Cincinnati, among others, Tyrrell said.

"We're looking for the leaders in the industry to tell us how we can take advantage of this opportunity," he said.

A message left with FedEx was not returned. An Amazon spokesman said he had no details to provide about the company's interest in Philadelphia's air-shipping expansion.

The air-freight company with the most significant current Philadelphia foothold is United Parcel Service Inc., which employs 3,100 at a hub on 212 acres along Hog Island Road. It includes a 681,000-square-foot sorting building and a 50-acre aircraft ramp.

Brandon Stallard, chief executive of Troy, Mich.-based supply chain management company TPS Logistics, said he can imagine the facility being used by pharmaceutical companies to rush drugs to market or by car manufacturers speeding auto equipment from cargo ships to their final U.S. destinations during recalls.

"There's just a heck of a lot of volume that happens on the East Coast," said Stallard, who is not involved with the proposal.

Airport officials are beginning preliminary work on the project, such as determining whether any environmental remediation or wetland habitat restoration work will be needed, Tyrell said. The project also will require working with Delaware County and Tinicum Township to relocate Tinicum Island Road, which separates the Henderson land from the airport itself.

Harold Epps, director of the city's Commerce Department, which operates the airport, said he sees the air-freight expansion plan, along with the deepening of the Delaware River navigation channel and updates to the Port of Philadelphia's terminals, as part of a larger effort to take advantage of the city's central location along the mid-Atlantic Seaboard.

With flight paths and shipping lanes much less crowded than those in the New York and Washington areas, Philadelphia should be an attractive gateway to the densely populated region, Epps said.

"We have just under-leveraged our location and our assets at both ports, and now we're beginning to recognize the value they can add to the supply chain," Epps said. "Our location gives us a significant capability to be a feeder for the region and the rest of the state."