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VOL.3 AIR FREIGHT FORWARDERS

AIR CARGO AREA DEVELOPMENT REPORT

3 5556 020 436 911

LANDRUM AND BROWN

309 Vine Street

Cincinnati 2, Ohio

February, 1961

The Honorable William E. Dowries, Jr.
Commissioner of Aviation
City of Chicago
City Hall
Chicago, Illinois

Dear Commissioner Dowries:

SEP 1994

uommTERHmmsm

In accordance with your letter of July 5, 1960, we are transmitting a report
concerning Air Freight Forwarder facility requirements at Chi cago-O1 Hare International
Airport. |t became necessary as part of the study to consider each function of the cargo
complex, as all functions in the cargo complex are interrelated and by varying degrees
dependent on one another. These interrelationships become quite complex in the long
range development plan.

You will note that this plan deals primarily with the long range area development
of the cargo complex and does not consider in detail the international and customs
clearance facilities for freight in the early years. The requirement for these facilities
at the present time and to approximately 1965 can be accommodated in the international
passenger terminal area. After 1965 the demonstrated volumes indicate that the
international facilities will be of the magnitude to require their location in the cargo
complex. At the time the international cargo facilities are moved to the cargo complex
it will be necessary that Federal Inspection facilities related to cargo be located in the
cargo complex to reduce communication distances.

If we can provide further data, please do not hesitate to let us know.

Respectfully submitted,

LANDRUM AN D BROWN

LETTER OF TRANSMITTAL

TABLE OF CONTENTS

Page

C
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T
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INTRODUCTION

CHAPTER

OPERATION

Introduction
Domestic Operation
International Operation

CHAPTER II FORECASTS

Introduction

Related Analyses of Demonstrated Forecasts
Related Analyses of Potential Forecasts

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C
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H
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T
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CHAPTER III SPACE AND LOCATION
Introduction
Space Forecast
Location and Layouts

CHAPTER IV FINANCE AND DEVELOPMENT
Introduction
Considerations

APPENDIX A INTERIM LETTER REPORT

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58

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INTRODUCTION

From 1946 to 1955 the Air Freight Forwarder was somewhat controversial in
the Air Cargo Industry. The 1955 Civil Aeronautics Board hearings established a firm
basis for forwarder operations. Since then manufacturers and the Air Cargo Industry
have become extremely cognizant of the Air Freight Forwarders.

The Air Freight Forwarder operation and facilities cannot be satisfactorily
resolved without considering the operation and facilities of the Domestic and
International air carriers. All of these functions are related to the airport and the
aircraft.

Dynamic long range future technological advances in the air transportation
field and in types of aircraft cannot be totally predicted. However, new developments
such as the all cargo aircraft CL-44 with the swing tail loading and jet transport will
effect wide changes in present concepts of air cargo facilities.

The proposed operating plan and facilities for individual air carriers are not
resolved at this time. Consequently^, all planning for the total cargo development must
be as flexible as possible. Before plans are finalized for the cargo complex the "users"
requirements should be established in further detail than that considered in this report.

Preliminary discussions have been held with the "users" . A visit to each of the
prospective Air Freight Forwarder tenants at Chicago-O'Hare International Airport was
made by Landrum and Brown. Further background information was gained from a visit
to the cargo complex at New York International Airport. Each of the individual airlines
serving Chicago was interviewed to determine their preliminary cargo requirements and
demonstrated cargo tonnage. This data is necessary to consider scope of airline operations

- 1 -

as the Air Freight Forwarders' operation cannot be completely divorced from the
operation of the air carriers.

The brief discussion of the role of the Air Freight Forwarders given above
is followed by a more detailed explanation of their operation in Chapter I . Chapter I
presents a general review of the Air Cargo Industry and particular data regarding how
the freight forwarders came into existence and how they function as a part of the
Air Cargo Industry.

Chapter II gives the forecasts of cargo for Chicago-O'Hare International
Airport and the past historical data.

Chapter III includes forecasts of the space requirements anticipated to take
care of the forecasted cargo. Different layouts that are possible for the necessary
facilities and their expansion are shown on the exhibits in this chapter.

Chapter IV outlines explanations of different methods of financing and
development that can be followed for a sound program.

Appendix A is the "Interim Letter Report" on the preliminary "Cargo Facility
Study" .

-2

CHAPTER I
OPERATION

INTRODUCTION

Who are the Freight Forwarders? What is their connection with the air
carriers? How did they get started? What about Air Cargo, Inc.?, Air Express,
Federal Inspection Service?, American Society for the Prevention of Cruelty to
Animals?

The understanding of these functions and the relationship of each must be
known in order to properly plan the location layout of each facility. Although each
function does not deal directly with all the other facilities, they are all inter-related.

In 1955 the Civil Aeronautics Board, following hearings under Docket No. 5947
et al, gave the Air Freight Forwarders an indefinite Letter of Registration permitting them
to continue to operate as they had prior to 1955. This hearing denied certain
applications including that of Air Cargo, Inc. for certain controls and interlocking
relationships. Air Cargo, Inc. was authorized to continue as an Air Freight Forwarder
and Air Express, a division of Railway Express, was authorized to continue operation.
The Civil Aeronautics Board report pointed out that the Air Freight Forwarders were
improving the air freight service through healthy competition. In turn this was helping
to improve the entire air transportation industry.

The Air Freight Forwarders appear to be an energetic group of individuals with

a keen eye for the air cargo business. They have solicited the manufacturers and

have successfully developed a substantial operation. In some cases, they have convinced

the manufacturers that shipping by air will save money even though the rates may be

higher than rail, road or water.

-3 -

The entire Air Freight Forwarding field is highly competitive and the
competition is helping to stimulate the use of air transportation for bulk cargo.
The "Big Break Through", a pamphlet by Dr. Stanley H. Brewer of the University
of Washington describes a tremendous advance anticipated in the near future for
the air cargo industry. The Air Freight Forwarders are undoubtedly going to have
a big part in this advance and they should not be overlooked in future planning.

In 1959 the Air Freight Forwarders handled approximately 20% of the Domestic
cargo and 70% of the International cargo in the United States. These percentages are
expected to increase in future years.

The Domestic and International Air Freight Forwarders are licensed to operate
under a Letter of Registration from the Civil Aeronautics Board as indirect air carriers.
The forwarders are authorized to publish rates and tariffs and to issue through air
waybills for a large number of United States and Overseas cities.

The Air Freight Forwarder came into existence through a demand for expediting
air freight. An explanation and understanding of the Air Freight Forwarders1 operation
is necessary in order to forecast a reasonable estimate of space.

Specific data regarding the function of the Air Freight Forwarders is as follows:

DOMESTIC OPERATION

The individual Air Freight Forwarders provide all or parts of the following
services in the domestic cargo operation:

1 . Pickup and delivery

2. Cargo scheduling

3. Routing

-4_

4. Documentation

5. Space reservation

6. Tracing claims

7. Rates

8. Air waybilling

Each of these services is described in detail as follows;

1 . Pickup and delivery

The pickup and delivery services for the customer has been a big
selling point of many of the Air Freight Forwarders. A manufacturer frequently
does not mind paying extra rates for prompt door-to-door service. In many instances,
the Air Freight Forwarders will pickup or deliver after the normal closing hours in
order to make a certain flight schedule. This type of operation is necessary to insure
a next morning delivery. The Forwarder will use his own trucks or contract a local
cartage agent for pickup and delivery.

2. Cargo scheduling

The flight schedules published by the individual commercial airlines
are known to the Air Freight Forwarder. These flight schedules from all the scheduled
airlines are quite complicated for the laymen. Many air carriers have all cargo
aircraft which do not operate on a set routine schedule. This means that the Air Freight
Forwarder must know or anticipate the time of departure of these cargo aircraft to best
expedite his shipments. The Forwarder can not make good a next morning or afternoon
delivery without using every possible means of cargo scheduling.

3. Routing

All of the various connecting flight schedules must be known by the
Air Freight Forwarder for the most expeditious routing of freight to a destination.
The routing of cargo to an out-of-the-way cosignee may require transferring the
cargo to another aircraft or another airline . This requires a special knowledge of
the flight schedules and routing of aircraft at stations all over the United States.
The Air Freight Forwarders who deal with the International cargo must know the
Domestic schedules as well as International schedules. In some cases, a special
knowledge of the train schedules in European countries is necessary for the most
expeditious routing.

All of these flight schedules and the best routing becomes quite complex
and only through experience and knowing of the individual airlines flight schedules and
rates can the Air Freight Forwarders serve the public well and still make a profit.

4. Documentation

The documentation that is performed by the Air Freight Forwarders has
saved considerable time in air cargo shipments. This satisfactory service, by the Air
Freight Forwarders to the public, was brought into focus in the 1955 Civil Aeronautics
Board Report. The efficient and proper documentation of the air cargo for fast delivery
to the consignee is the major element of operation that affects the Air Freight Forwarders
profit .

This proper documentation includes the following:

-6 -

1 . Commodity description

2. Insurance

3. Valuation charge

4. Routing of the shipment

5. Pickup and delivery information

6. Gross weight

7. Designation of prepaid or collect.

The routing and pickup and delivery services have been explained.
The other items are generally self-explanatory and are not explained in detail.

5. Space reservations

The varied destinations of the cargo from a manufacturer requires

that all means of scheduling and routing be exhausted to expedite the shipments. This

means that the proper connections must be made and space reserved for the cargo on

the proper aircraft. This is particularly important if the shipment requires transfer.

Due to the scheduling problem many of the forwarders find it necessary

to use certain schedules consistently. |t is highly possible that a container type of

space reservation will be a part of the big break through in cargo handling. Thus,

a forwarder could load a specific container which is assigned to a certain flight and

send it directly to that aircraft. This would mean that the airline would not need as

much cargo building space. However, the airline would still maintain the responsibility

for loading the aircraft and for its weight and balance. The containers could probably

be designed for passenger aircraft or all cargo aircraft. Containerization is not new

in freight handling, however, this system or a similar one will be necessary to reduce

cargo ground handling time.

-7-

6. Tracing claims

The tracing of claims has long been a "sore thumb" with those individuals
handling cargo. There will always be a certain amount of claims that will require
tracing. It is conceivable that the number of claims from damage and lost cargo can be
reduced. A number of factors which may influence the number of lost or damaged claims
are given below:

a. Next morning door-to-door service involving less time enroute.

b. Fewer individuals handling the cargo.

c. Cargo pick up and delivery by one organization™

A containerization loading system would greatly reduce the amount of
cargo handling. Less handling should reduce the loss and damage claims and possibly
reduce the rates.

7. Rates

The rates being charged by the air carriers and the Air Freight Forwarders
vary with distance and weight. The current rates are not out of reason considering
today's methods of handling. The next day delivery service for many stations is an
important selling point to shippers and apparently justifies the rate. This is especially
true of perishable items such as food and flowers.

The increased efficiency of handling cargo through the future use of
containerization by the air carriers and the Air Freight Forwarders will probably produce
a lowering of rates. In turn, the lower rates will attract more manufacturers to use air
transportation.

Due to various factors such as shipping procedure and consolidation of
shipmentsvthe rates given by the Air Freight Forwarders to the prospective customers

_8 -

are sometimes lower than the airline rates but under certain conditions they may be
higher. Although the lower rates attract the customers who are shipping in volume, the
manufacturer who needs the next day delivery service to a customer does not mind
paying the higher rates that are charged by some of the forwarders. AM rates and
tariffs charged by both the Air Freight Forwarders and the airlines must be approved
by the Civil Aeronautics Board.

After a close evaluation of the rates that are offered by the air carriers
and Air Freight Forwarders a manufacturer may find that air freight is cheaper than
other means of transportation for his purposes. A few of the items that are considered
by the manufacturer in addition to the specified rates are:

1 . Type of commodity

2. Routing

3. Insurance

4. Packaging/crating

5. Interest charges on idle capital
6o Inventory control

7. Market coverage

8. Distribution development

9. Time

These items are weighed differently according to the individual shipper.

Insurance for all air cargo is required by law. These insurance rates

must be borne by the Air Freight Forwarder or the air carrier who in turn includes these

costs into rates given to the customer. |t is conceivable that lower insurance rates will

be established when damage and loss claims are reduced through improved air cargo

handling.

„9 _

8. Air waybilling

The domestic air waybill covers the carriage of the shipments from the
airport of origin to the destination airport. The documentation of the air waybill can
be handled by the air carriers or the Air Freight Forwarders.

Proper preparation of the air waybill is necessary for expeditious handling
of the shipment. The Air Freight Forwarders who are familiar with all of the air carriers
and their flight schedules can in some cases fill out the waybill easier than the air
carriers.

INTERNATIONAL OPERATION

|t has been estimated that in 1959 the Air Freight Forwarders handled
approximately 70% of the international freight in the United States.

The processing and handling of shipments for an international operation is
parallel to the domestic operation except for the brokerage and custom clearances
required for the exports and imports. The formal import entries also require clearance by the
United States Customs Appraisers.

As the international operation parallels the domestic operation, only a
description of the variances of processing are explained. An understanding of the
export and import operation from the airline and shipper viewpoint presents a basis for
better understanding of how and why the Air Freight Forwarders are handling a
substantial volume of the international air freight in the United States.

Export

There is considerable documentation required for the export of air cargo. In
addition to the shipping documentation under the domestic type operation the export

- 10-

operation requires a licensed exporter and the preparation of a shippers export
declaration.

The licensed exporter must be closely acquainted with foreign government
requirements . These requirements include consulate paper work in the language of the
country, fees, et al. Accurate and complete documentation is absolutely essential
for clearance of the shipment.

After the airline receives a shipment of cargo for export its prime responsibility
is making sure the shipment is on the right aircraft with the proper waybill attached.
A Letter of Instruction is also required. In most cases this letter is completed by the
licensed exporter as a part of the authorization of the waybill. A commercial invoice
goes with all shipments for clarification and checking. The airlines handling the
international freight normally hold the export shipments an average of six hours before
aircraft loading.

Many of the international Air Freight Forwarders do not have trucks and do
not need warehouse space. In this case, they are only brokerage agents requiring office
space for handling the paper work and expediting the air freight. Seldom do these Air
Freight Forwarders need to store cargo. When storage is needed the packages are normally
small and can be placed in a large office.

Import

The import operation is more complicated than the export and requires much
more paper work from the air carriers and forwarders than for the domestic operation

The import operation for the Air Freight Forwarder includes the same basic
responsibilities as for the domestic operation plus certain activities described below.

- 11 -

As a shipment arrives from outside the United States the consignee is notified
by the airline. In most cases the consignee or broker already knows by teletype of the
arrival. The Air Freight Forwarders have their own brokerage agents who have previously
prepared the proper documents for United States Custom's clearance.

The informal entries ( valuation under $250 ) are cleared by the United States
Custom's Officers located at the Federal Inspection area or in the individual airline
cargo terminals. These entries are usually cleared as soon as the cargo has been; ( 1 )
checked by health officials if necessary, ( 2 ) unloaded from the aircraft, ( 3 ) checked
for proper shipment, and ( 4 ) the consignee notified that the entry is ready for
clearance.

The forma! entries ( valuation over $250 ) requires inspection by the United States
Custom's Appraiser. These entries are set aside in a separate appraiser's room which is
furnished by the airlines. The formal entries are inspected twice a day and then released
to the warehouse or the consignee.

The large amount of paper work that is required for Custom clearance, etc. is
handled primarily by the Air Freight Forwarders. The frequent changes in government
regulations must be considered in preparing the proper documentation. The consulate
paper work from foreign countries is handled in the language of that country. This
requires that the Air Freight Forwarders have access to individuals who are fluent in
the language of the countries to which they are forwarding air cargo or from which
they receive air cargo.

All of the documentation must be letter perfect before the clearing agencies
will accept the forms. The Air Freight Forwarders are professionals in this field and

- 12-

probably will continue in this capacity due, in part, to the complexity of the paper
work.

There are numerous ancillary factors in the processing of International cargo,
Such factors as government bonding, splitting shipments for entry advantages, et al
have little if any, effect on the basic operation or faci I Ity requirement.

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CHAPTER II H

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CHAPTER II
FORECASTS

INTRODUCTION

This chapter presents the estimated future volumes of international and
overseas air cargo and domestic air cargo for Chicago-O'Hare International Airport.

Certain limiting factors evolved from the investigation of Chicago's historic
international and overseas air cargo. Namely:

1 . The complete lack of and/or limited number of direct airline schedules
between Chicago and international and overseas communities which is,
in part, a result of the historic concept of the "coastal gateways".
2. The lack of comparative or comprehensive reporting practices of the air
carriers, the Civil Aeronautics Board and other governmental agencies.
So that the relative possible magnitudes of the volumes involved could be seen,
the following bases were used to describe the future international and overseas air
cargo volumes. They are;

1 . Demonstrated - a continuation on the basis of historic growth pattern and

levels.
2. Potential - a reasonable estimation of the traffic if greatly expanded
services were authorized and provided^ that is, service that would be
more commensurate with Chicago's domestic airline service.
The definition of international and overseas air cargo for the purpose of this
report is as follows:

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15-

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All air cargo ( Air Freight and Air Express ) which originated in or had
as its destination a foreign country or overseas territorial possession of
the United States.
The forecast of domestic air cargo as drawn from Volume II "Chicago-O1 Hare

International Airport Master Plan Report" is presented in Tables 2 through 14 of this

chapter.

The following Tables 2-1 and 2-2 are the forecasts on the bases of demonstrated

and potential. These forecasts provide for a "break through" in air cargo volumes

during 1960 - 1965; consequently, any individual year by itself may appear high, but

the trend is believed to be realistic.

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TABLE 2 - 1

The Forecast" of DEMONSTRATED International and Overseas Air Cargo
at Chicago-O'Hare International Airport for 1962, 1965 and 1980 are:

Forecast Period
(1)

Enplaned
( Tons )

(2)

Deplaned
( Tons )
(3)

Total
( Tons )
(4)

1959 (actual )

1,878

522

2,400

1962

3,800

1,300

5,100

1965

5,600

2,500

8,100

1980

9,400

8,500

17,900

Source: Column ( 1 ) - Forecast periods
( 2) - Table 2-4
(3) -Table 2-6
( 4 ) - Sums of Columns ( 2 ) and ( 3 )

TABLE 2-2

The Forecast of POTENTIAL International and Overseas Air Cargo at
Chicago-O'Hare International Airport for 1962, 1965 and 1980 are:

Forecast Period
(1)

Enplaned
( Tons )

(2)

Deplaned
( Tons )

' (3)

Total
( Tons )
(4)

1962

27,400

20,600

48,000

1965

33,500

25,100

58,600

1980

58,600

52,700

111,300

Source: Column ( 1 ) - Forecast periods
( 2) - Table 2-12
(3) - Table 2-13
( 4 ) - Sums of Columns ( 2 ) and ( 3 )

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Related Analyses and Pertinent Notes Regarding the Demonstrated Forecasts

A. "Enplaned" Air Cargo

This study investigated the total Chicago cargo market - as with
studies for other cities, it was found that there was a consistent relationship between
domestic and international and overseas air cargo. Since the domestic air cargo
market for Chicago was forecasted in previous studies ( reference: O'Hare Field -
Chicago International Airport, Volume !, Air and Surface Traffic Report, October 21,
1958 ) the demonstrated relationship ( Table 2-3 ) was utilized in forecasting the
international and overseas "enplaned" air cargo. ( Table 2-4 ).

B. "Deplaned" Air Cargo

The relationship of "deplaned" to "enplaned" international and overseas
air cargo has steadily increased from 9% in 1955 to 27% in 1959. ( Table 2-5 ). Studies
of international and overseas air cargo at other cities indicated that the ratio between
"deplaned" and "enplaned" is approximately 1 :1 . On the basis of that found at other
cities, and the demonstrated growth at Chicago the ratio of "deplaned" to "enplaned"
international and overseas air cargo at Chicago has been forecasted to become
approximately equal. ( Table 2-6 ).

TABLE 2-3

There has been a consistent relationship between Domestic and International

and Overseas

"Enplaned" Air

Cargo for the Years

1955- 1959 at Chi

cago.

Ratio of

International

Year

Domestic

and Overseas

Total

to Domestic

(2)

(3)

(4)

(5)

1955

53,555.6

1,549.9

55,105.5

.029%

1956

56,946.9

1,778.3

58,725.2

.031

1957

56,782.6

1,505.1

58,287.7

.027

1958

59,977.2

1,622.1

61,639.3

.028

1959

70,799.3

1,878.4

72,677.7

.027

Source: Column ( 1 ) - Years 1955 - 1959

( 2 ) - Air Commerce Traffic Pattern, 1956 - 1960

( 3 ) - Records of respective air carriers - Chicago, Illinois

( 4 ) - Sum of Columns ( 2 ) and ( 3 )

( 5 ) - Column ( 3 ) divided by Column ( 2 )

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TABLE 2-4

DEMONSTRATED "Enplaned" International and Overseas Air Cargo is expected
to continue its relationship to Domestic throughout the forecast periods
1962, 1965 and 1980.

Enplaned Air Cargo

Ratio of International

Domestic International and Overseas

Year ( Tons ) to Domestic ( Tons )

"TH " (2) (3) — JT)

1962 135,900 2.8% 3,800

1965 201,000 2.8 5,600

1980 335,600 2.8 9,400

Source: Column ( 1 ) -Years 1962, 1965 and 1980

( 2 ) - 1962 - Interpolated between 1959 and 1965

1965 and 1980- O'Hare Field, Chicago International
Airport, Volume I of Air and Surface Traffic Report,
October 21, 1958
( 3 ) - Median of historic years 1955 - 1959, Table 2-3
( 4 ) - Column ( 2 ) multiplied by Column ( 3 )

20-

TABLE 2-5

The relationship of "Deplaned" to "Enplaned" International and Overseas
Air Cargo at Chicago has steadily increased from 1955 - 1959.

Year

TTT

1955
1956
1957
1958
1959

Deplaned
( Tons )

(2)

Enplaned
( Tons )
(3)

Ratio-Deplaned
to Enplaned
(4)

138.4

1,549.9

.09%

209.1

1,778.3

.12

220.1

1,505.1

.15

294.4

1,662.1

.18

522.2

1,878.4

.27

Source: Column ( 1 ) - Years 1955 - 1959

( 2 ) and ( 3 ) - Records of respective carriers serving Chicago
( 4 ) - Column ( 2 ) divided by Column ( 3 )

21 -

TABLE 2-6

DEMONSTRATED International and Overseas "Deplaned" Air Cargo is expected
to increase at its historic rate of growth throughout the forecast years 1962,
1965 and 1980 .

Enplaned Deplaned

Forecast Ratio of Deplaned Forecast

Period ( Tons ) to Enplaned ( Tons )

TH (2) (3) (4)

1962 3,800 .35 1,300

1965 5,600 .45 2,500

1980 9,400 .90 8,500

Source: Column ( 1 ) - Years - Forecast period
(2) -Table 2-4
( 3 ) - Demonstrated Ratio, Years 1955 - 1959 at Chicago

and projected - straight-line method Table 2-5
( 4 ) - Column ( 2 ) multiplied by Column ( 3 )

- 22

Related Analyses and Pertinent Notes Regarding the Potential Forecasts

As stated previously, the definition of Potential international and overseas
air cargo is: a reasonable estimation of the air cargo traffic should greatly expanded
services be authorized and provided at Chicago. This could be characterized as air
services equal to the population, trade and commerce of the Chicago air service area,
relative to the air service received by New York with its population, trade and commerce

A. "Enplaned" Air Cargo

The Potential "enplaned" air cargo volumes for Chicago were determined

on the basis of three independent studies and estimates. Since the forecasts were very

similar in amount the median of the three bases were used. ( Table 2-12 ). The selected

bases are described below:

Basis "A"

The historic enplaned international and overseas air cargo per international

and overseas aircraft departure at Miami, Florida were investigated and found to

be approximately 1 .7 tons per departure. ( Table 2-7 ). The 1 .7 tons per

departure at Miami was then applied to the forecast of Chicago's Potential

international and overseas aircraft departures ( forecasted in previous studies

for the City of Chicago ) to determine an estimate of Chicago's Potential

"enplaned" international and overseas air cargo. ( Table 2-8 ). Miami was

selected for study because of its significant volumes historically of enplaned

international and overseas air cargo.

Basis "B"

Another forecast basis studied, was to determine what Chicago's

international and overseas Potential "enplaned" air cargo would be if it were

at least as large a percentage of total United States as Chicago's domestic

-23-

"enplaned" air cargo is of total United States.

Approximately 14% of the total United States domestic enplaned air
cargo is enplaned in Chicago „ This percentage was then applied to the forecast
by Landrum and Brown, of total United States international and overseas
"enplaned" air cargo expected to be carried by United States Flag carriers.
Volumes carried by Foreign Flag carriers at Chicago are estimated to equal
those carried by United States Flag carriers. The Foreign Flag carriers partici-
pation is based upon the fact that at New York and Miami the volumes carried
by both flag carrier groups tends to be equal. The estimates of air cargo on
this basis are found on Table 2-9.
Basis "C"

New York's enplaned international and overseas air cargo activity
was investigated as a third forecast basis.

The volume of "enplaned" air cargo per international and overseas
aircraft departures were determined ( Table 2-10 ) and found to be steadily
increasing at a rate of 14% per year over the historic period 1956 - 1959. The
volume of cargo per departure at New York was increased at the historic rate for
the forecast period to 1 .2 tons in 1962 and 1 „8 in 1965. There were then applied
to Chicago's forecast of Potential international and overseas aircraft departures
(Table 2-11 ).

An independent rough and general forecast of New York's international
and overseas air cargo for 1965 ( 229,300 tons ) and aircraft departures ( 52,000 )
approximated the 1965 estimate of 1 .8 tons of cargo per aircraft departure
previously determined,

-24-

Table 2-12 is a consolidation of the three bases used to estimate Chicago's
Potential "enplaned" international and overseas air cargo; the median of which is
the forecast.

B. "Deplaned" Air Cargo

New York's relationship of "deplaned" to "enplaned" international and
overseas air cargo was investigated and found to be at a ratio of .75:1 . This was sub-
stantiated and believed to be reasonable on the basis of Chicago's trend of "deplaned"
air cargo to increase its relationship to "enplaned" . ( Table 2-5 ).

New York's ratio ( .75:1 ) was then applied to the forecast of Potential
"enplaned" air cargo at Chicago for the years 1962 and 1965. The Potential ratio of
"deplaned" to "enplaned" for 1980 ( .90 ) can reasonably be expected to increase on
the basis of Chicago's Demonstrated trend of deplaned air cargo to increase at a more
rapid rate than that of enplaned.

The forecast of Potential "deplaned" international and overseas air
cargo for Chicago is shown on Table 2-13.

-25

TABLE 2-7

Miami's "enplaned" air cargo per International and Overseas aircraft
departure has remained relatively constant.

Year

1952
1953
1954
1955
1956

Enplaned
Air Cargo
( Tons )
(2)

Aircraft
Departures
( Number )

(3)

Cargo

Aircraft

Departure ( Tons )

(A)

20,470

13,532

1.5

25,100

14,577

1.7

29,597

16,601

1.7

30,299

18,444

1.6

34,447

19,074

1.8

Source: Column ( 1 ) - Years 1952 - 1956

( 2 ) and ( 3 ) - Landrurn and Brown Report, "Study of the Aviation
Potential and Facility Requirements of the Miami
Air Service Area" November, 1958
( 4 ) - Column ( 2 ) divided by Column ( 3 )

26-

TABLE 2-8

Chicago's POTENTIAL "Enplaned" International and Overseas Air Cargo
for 1962, 1965 and 1980 as determined by Basis "A" .

Year

Try

Chicago

Miami

Chicago

Potential

Cargo Per

International

Aircraft

Departure

and Overseas Air

Departure

( Tons )

(3)

Cargo ( Tons )

(4)

1962

17,600

1.7

29,900

965

1980

18,600
34,400

1.7

31,600
58,500

Source: Column ( 1 ) - Forecast periods

( 2) - "O'Hare Field, Chicago International Airport, International

and Overseas Facilities Study" Report by Landrum and Brown,

November, 1960
( 3 ) - Table 2-7
( 4 ) - Column ( 2 ) multiplied by Column ( 3 )

TABLE 2-9

Chicago's POTENTIAL "Enplaned" International and Overseas Air Cargo for
1962, 1965 and 1980 as Determined by Basis "B".

Line 1962 1965 1980

A. Forecast of United States 98,000 125,000 209,000*
International and Overseas

Air Cargo - U.S. Flag Carriers

B. Chicago's share of U.S. - 14% 14% 14%
Domestic Enplaned Air Cargo

C. Forecast - International and 13,700 17,500 29,300
Overseas Enplaned Air Cargo

by U.S. Flag Carriers - Chicago

D. Ratio of International and 1:1 1:1 1:1
Overseas Enplaned Air Caigo

carried by Foreign Flag Carriers

to U.S. Flag Carriers (at Chicago )

E. Forecast - International and 13,700 17,500 29,300
Overseas Enplaned Air Cargo

carried by Foreign Flag
Carriers - Chicago

F. Forecast of Total International 27,400 35,000 58,600
and Overseas Enplaned Air

Cargo - Chicago

* Interpolated between 1965 and 1980 on the basis of Chicago domestic forecast
between 1965 and 1980 as determined in Landrum and Brown Report "Traffic
Forecasts, O'Hare Field Chicago International Airport, Volume II Master Plan
Report, November, 1960

Source: Line A - Landrum and Brown Forecast of International and Overseas
Enplaned Air Cargo carried by U.S. Flag Carriers
B - Air Commerce Traffic Pattern for Calendar year 1959
C - Line A multiplied by Line B
D - Indicated trend of historic data and estimated to level off at

a 1:1 ratio U.S. Flag to Foreign Flag
E - Line C multiplied by Line D
F - Sum of Line C and Line E

-28-

TABLE 2-10

New York's "Enplaned" Air Cargo per International and Overseas Aircraft

Departure has been steadily increasing.

Year

1956

1957

1958

1959

Cargo
( Tons )

(2)

Aircraft
Departures

(3)

Cargo Per
Departure ( Tons )

(4)

15,730

27,849

.56

19,340

30,440

.64

23,585

35,432

.67

29,256

36,423

.80

Percentage Increase
Per Year over Period

14%

Source: Column ( 1 ) - Years 1956 - 1959

( 2 ) and ( 3 ) - Port of New York Authority Records and

International Civil Aviation Organization -
Digest of Statistics - Respective Years

( 4 ) - Column ( 2 ) divided by Column ( 3 )

TABLE 2-11

Chicago's POTENTIAL "Enplaned" International and Overseas Air Cargo
for 1962, 1965 and 1980 as Determined by Basis "C" .

Year

1962

New York

Chicago

Potential

Cargo Per

International

Departures

Departure

Air Cargo
(4)

17,600

1.2

21,100

1965

18,600

33,500

1980

34,400

1.8

61,900

Source; Column ( 1 ) - Forecast periods

( 2 ) - Report "Chicago-O'Hare International Airport,
International and Overseas Facilities Study",
Landrum and Brown, November, 1960

( 3 ) - Table 2-10, projected on the basis of 14% per year
as shown historically

( 4 ) - Column ( 2 ) multiplied by Column ( 3 )

-30

TABLE 2-12

The Median of Bases "A", "B" and "C" was used as the forecast of Chicago's
International and Overseas "Enplaned" Air Cargo for 1962, 1965 and 1980.

Line 1962 1965 1980

Source: Line A - Table 2-8
B - Table 2-9
C - Table 2-11
D - Median of Bases "A", "B" and "C

Enplaned

A. Basis "A" ( Tons ) 29,900 31,600 58,500

B. Basis "B" (Tons ) 27,400 35,000 58,600

C. Basis "C" ( Tons ) 21,100 33,500 61,900

D. Forecast ( Median of Bases )

( Tons ) 27,400 33,500 58,600

31 -

TABLE 2-13

Chicago's POTENTIAL "Deplaned" International and Overseas Air Cargo based on
Chicago's DEMONSTRATED trend and New York's historic relationship of "Deplaned1
to "Enplaned" for the forecast periods of 1962, 1965 and 1980.

Line 1962 1965 1980

A. Forecast of Total Enplaned 27,400 33,500 58,600
International and Overseas

Air Cargo - Chicago ( Tons )

B. Ratio of Deplaned to Enplaned 75:1 .75:1 .90:1
International and Overseas Air

Cargo - Chicago

C. Forecast of Total Deplaned 20,600 25,100 52,700
International and Overseas

Air Cargo ( Tons )

Source: Line A - Table 2-12

B - New York's historic relationship and Chicago's Demonstrated

trend of deplaned to enplaned air cargo
C - Line A multiplied by Line B

32-

CHAPTER

SPACE AND LOCATION LAYOUTS

H
A
P
T
E
R

C
H
A
P

T
E
R

A
P

P
E
N
D

X
A

CHAPTER III

SPACE AND LOCATION LAYOUTS

INTRODUCTION

The amount of building space and other areas necessary to properly take care
of the forecasts given in Chapter II depends upon two main factors:

1 . The ground handling of air cargo in the next few years, and

2. the type of aircraft.

This report will summarize all information and data to this date on the Chicago-
O'Hare International Airport Cargo Facilities. The forecasts for 1965 are of primary
concern to the immediate construction program. The ultimate forecasts are based upon an
airfield aircraft capacity and greatly expanded services. The year of this ultimate capacity
has been estimated at 1980.

The problems of ground handling and aircraft type can not be answered at this
time; however, by using space -volume ratios experienced in the past and considering
what could happen in the near future a reasonable estimate of space has been forecasted.

It is important to caution that the space estimates are based on Potential volumes.
This tends to maximize space requirements. Use of this principle is recommended for master
planning.

SPACE FORECASTS AND CRITERIA

A complete containerization program has been suggested by many experts in the
field of air transportation for a speed-up in cargo ground handling. The idea of contain-
erization is not new and one individual all cargo air carrier at Chicago-O'Hare
International Airport is designing its entire program around a new swing tail aircraft
and containerization. Just how many of the other air carriers will go into this operation

-33-

is not known, however, airlines are nor going to discard all of their present aircraft
and buy new equipment in one or even three years time.

Will the concept of containerization lower the amount of building space needed
and how much?

It is almost impossible at this time to answer these questions on containerization.
It is conceivable that the building space shown in Table 3-3 will be reduced considerably
through new ground handling methods. However, the new ground handling methods may
increase the cargo volumes beyond those forecast in Chapter II. The increased use of air
transportation coupled with new ground handling methods could conceivably still require
the amount of space that is shown in Table 3-3. Exhibits 4, 5 and 6 show this Potential
space applied to various solutions.

Domestic

Two cargo buildings are presently under construction for the domestic carriers.

There is approximately 91,500 square feet in these two buildings. One is 750
feet long by 50 feet wide ( 37,000 square feet ) and the other is 750 feet long by 72 feet
wide ( 54,000 square feet ), These two buildings are being constructed for the domestic
carriers. This space does not include space for all cargo earners such as Flying Tiger,
Zantop, Riddle, Etc.

Flying Tiger has leased approximately nine acres of land for a new building of
approximately 34,000 square feet. Flying Tiger is experimenting with a new concept in
cargo handling and expect to increase its carrying capacity substantially in the next
few years.

This new concept is based upon the principle of an overhead crane that will

pick up a pallet and move it to a storage dock. Each pallet will be packed for an

individual station which will eliminate loading and unloading of small packages to and from

-34-

the aircraft. The turn around time of each aircraft is expected to be reduced to
approximately 45 minutes.

United and American Airlines have tentatively requested a greater amount of
space than originally anticipated which is further indication that the 91 ,500 square feet for
all domestic carriers will not be sufficient. This factor plus the indication that the Potential

volumes will require 355,000 square feet of space in 1965 leads to the necessity for the
careful analysis of future facilities. Table 3-4 illustrates what the domestic carriers have
leased compared to building space necessary if the Potential volumes are ever realized.

The overall master plan must be considered for each stage of construction. The
existing cargo buildings and the Flying Tiger lease are established. These areas are to be in
operation by the end of 1961 . Any additional cargo buildings must be functional with these
areas. Exhibits 4, 5 and 6 indicate different layouts with different functional relationship which
will accommodate the Potential space requirements shown on Tables 3-6 through 3-8

International

The cargo buildings presently under construction are planned to handle domestic
cargo only. The previous planning assumed that international cargo facilities would be in the
international terminal until such time as the volume of international cargo requires relocation
to the cargo complex.

The timing and magnitude of such relocation will depend on the development of
the Potential volumes. However, the estimated "Demonstrated" volumes would indicate
such relocation as wise by 1965.

The international carriers should be separated from the domestic operation.

However, the domestic carriers who also handle international cargo should remain with

the domestic carriers. A location adjacent to the Federal Inspection services is advantageous

for both the mixed operation and the pure international operation.

-35-

The forecast for the international facilities shown on Table 3-2 is based on
additional international carriers commencing operation with greatly expanded service.

Exhibit 3 illustrates a typical international cargo building. The individual
carriers who lease the ground may build something entirely different. However, the typical
plan shown on Exhibit 3 has most of the points that were suggested by a number of the
international carriers.

Federal Inspection Services

The Federal Inspection Services for cargo are presently being handled at the
international terminal building.

With an increase in international cargo a separate area will be necessary for
the Federal Inspection to handle processing, brokerage fees,et al . The international air
carriers will furnish space for their own clearance of formal and informal entries. The
Federal Services handling inspection, fees,etc, should be near the international carriers
and the brokerage agents. Since the Air Freight Forwarders are handling approximately
70% of the international cargo, the Federal Services are shown as located with the Air
Freight Forwarders. An alternate location between or adjacent to both the international
and Air Freight Forwarder areas would be compatible.

The space allotted for the Federal Inspection activities is based on the New York
International Airport facilities and a direct ratio of square feet to international cargo being
handled. This ratio and the forecasted Potential cargo tonnage was used for the estimate of
Federal Inspection space required at Chicago-O'Hare International Airport.

Air Freight Forwarders

The AEr Freight Forwarders have demonstrated their importance to the air cargo

industry and especially to the international operation. The forwarder operation does not

require them to have access to the taxiways but they should be as close as possible to the

center of operation.

-36-

The 1965 building space for the Air Freight Forwarders shown in Table 3-3
is from the returned questionnaires ( Table 3-5 ) of the organizations who requested space
at Chicago International Airport. Many of the Air Freight Forwarders need space
immediately and may find other facilities if a building program is not arranged in the near
future.

After reviewing the questionnaire results of September, I960, certain discrepancies
were noted. A careful field survey of existing Forwarder facilities was made and a revised
estimate prepared. The September estimate indicated a 1965 requirement of 67,000 square
feet as compared to the estimate of 48,800 square feet shown in Table 3-5.

As a part of this study a field trip was made to New York International Airport to
study their cargo operation. All the Air Freight Forwarders at New York International
Airport are located in Building 80. Thirty-eight tenants use Building 80 at present. However,
not all of the 38 tenants are freight forwarders and only 13 of the 38 have dock or warehouse
space.

The two story building for the Air Freight Forwarders in New York seems to be
working out quite well and is a very practical type building. The organizations who do
have dock space would like to have the building open on both sides. This was the general
opinion of all of the freight forwarders who physically handle the freight.

The basic design of the building is something that should have as many of the
"users" ideas worked in as possible. The typical plan "A" that was shown in the "Cargo
Facility Study, Interim Letter Report", Appendix A, illustrated a layout that was generally
acceptable to the Air Freight Forwarders. However, all of the forwarders were in agreement
that the 80 foot width shown in this plan should be reduced. There were varied opinions
on the exact dimensions of a new building but the three points listed below and shown on

-37-

Exhibits 1 and 2 illustrate what has been tentatively agreed upon by the Air Freight
Forwarders:

1 . Sixty foot wide building with dock space on both sides.

2. Two floors or mezzanine .

3. Fourteen foot high warehouse clearance .

A one story building was also mentioned at the August, 1960 meeting in Chicago
and is shown on Exhibit 2.

No effort is made to estimate which forwarders, if any, would or would not
move their operation to a site selected on the airport. However, the planning assures that
all forwarders eventually desiring an "on" airport operation can be accommodated.

American Society for the Prevention of Cruelty to Animals

The area set aside for the ASPCA facilities should be sufficient for the 1980
forecasts. The ASPCA facilities are primarily needed for the international carriers and
the United States customs inspection with quarantine when necessary. The growth and
expansion of the ASPCA building depends upon the growth of the international cargo
carriers.

38-

TABLE 3 - 1

Forecast of DEMONSTRATED* Internationa I and Overseas
Air Cargo Space Requirements for
Chicago-O'Hare International Airport.

Year Square Feet

1965 16,800

1980 28,200

* Based on Demonstrated forecast shown in Table 2-1 of this report,

39-

TABLE 3-2

Forecast of POTENTIAL* International and Domestic**

Air Cargo Space Requirements for
Chicago-O'Hare International Airport.

International

Domestic

1965

1980

Sq. Ft.

105,000*

178,000**

355,000**

594,000**

* Based on Potential forecast given in Table 2-2 of this report.

** Based on Potential domestic forecast of 118,600 enplaned tons in 1965

and 198,000 enplaned tons ultimate, Master Plan Report, Volume 2, Page 1 1

-40-

TABLE 3-3

Cargo Space Forecast for
Chicago-O'Hare International Airport

1965
Building
Sq. Ft.

1965
Acreage*

1980
Building
Sq. Ft.

1980
Acreage*

Domestic

355,000

52.0

594,000

81.0

International

1 05,000

11.5

178,000

20.2

Freight Forwarders
( includes Federal
Inspection )

59,185**

4.75

120,000**

9.65

AS PC A

Total

5,000

524,185

1.0

69,25

10,000 2.0

902,000 112.85***

* Leased Acreage

** Two Floor Building

*** Additional 50-60 acres needed for Roadways and Taxiways depending on layout
design. Connecting taxiways to the runways are not included in the 50-60 acres.
See Tables 3-6, 3-7 and 3-8.

-41 -

TABLE 3-4

Domestic Airline Space Foreca:

;t Projected F

rom Demonstrated Air

Cargo

During 1958 for

Chicago, Illinois.

Percent of

Cargo
Handled

1965

1980

1958

Building

1965

Building

1980

Requested

Domestic
(1)

Sq. Ft.

(2) ■

Acreage
(3)

Sq. Ft.

(4)

Acrecge

or Leased

(*>)

United

117,200

17.2

192,000

26.7

25-28 acres*

American

78,100

11.45

132,000

17.8

48-75,000 sq.

ft.*

Delta

28,400

4.16

47 , 500

6.5

2,016 sq.

ft.

Capita!

21,500

3.22

35,700

4.8

2,592 sq.

ft.

Northwest

21,500

3.22

35,700

4.8

5,184 sq.

ft.

TWA

21,500

3.22

35,700

4.8

6,048 sq.

ft.

Eastern

14,200

2.08

23,800

3.2

6,048 sq.

ft.

Braniff

14,200

2.08

23,800

3.2

3,168 sq.

ft.

Northwest Orie

nt 2

7,100

1.04

11,900

1.6

Ozark

3,550

.52

5,940

1,152 sq.

ft.

Continental

3,550

.52

5,940

2,880 sq.

ft.

Flying Tiger

14,200

2.08

23,800

3.2

9.0 acres

Riddle

10,650

1.56

17,800

2.4

Slick

100,0%

80.6

Total

344,650

52.35

591,580

Source: Column ( 1 ) - Civil Aeronautics Board Report 1958

( 2 ) - Based on 355,650 square feet shown in Table 3-2

( 3 ) - Based on 52.0 acres shown in Table 3-3

( 4 ) - Based on 594,000 square feet shown in Table 3-2

( 5 ) - Based on 81.0 acres shown in Table 3-3

( 6 ) - Leased in present cargo buildings

* Preliminary reports

TABLE 3-5

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FUTURE EXTENSION

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1-3-61

LOCATION AND LAYOUTS

Table 3-1 shows the square footage that would be required for international facilities
under the demonstrated cargo volumes shown in Table 2-1. The ratio used for Table 3-1
and 3-2 was derived from experience gained at other major airfields in the United States
that have complete separate international and domestic cargo facilities now in operation.

The different schemes shown on Exhibits 4f 5 and 6 are functional with the approved
master plan.

From the standpoint of ideal functional relationship all airline cargo facilities
should front on taxiways and aprons. An ideal functional relationship would place the
Federal Inspection, Air Freight Forwarder and ASPCA operations in the center or core of
a grouping of airline cargo units, with the airline units facing the airfield area. Due to
the geometric and scale this cannot be accomplished at Chi cago-O' Hare International Airport,

A review of the various advantages and disadvantages of each scheme is as follows:

Exhibit 4 - Scheme 1

Exhibit 4 presents a solution which permits gradual expansion of domestic air cargo
facilities until the present cargo area North of Runway 9R-27L is saturated. Following
this the area assignments begin at a new cargo complex immediately South of Runway 9R-27L.

This plan somewhat remotes the international facilities but provides a fairly well
centralized location for the Air Freight Forwarders and the ASPCA facilities in the ultimate
cargo complex.

Advantages:

1 . Developes domestic cargo facilities at a minimum early stage cost

2. Provides Air Freight Forwarder facilities in small units which could simplify

occupancy should individual financing by lessee be used.

_47_

3. Plan makes maximum use of existing roadways both now and in the future. For
example, the present Lawrence and Manheim Roads could be used for Air Freight
Forwarder circulation.

Disadvantages :

1 . The international facilities are remote, particularly in the early stages.

2. Until the potential cargo volumes are developed the Air Freight Forwarder
area is remoted from the first stage air cargo area as compared to certain other
solutions,

3. Site development cost probably greater than for other plans.

4. Uses airfield frontage for activity that does not require frontage on airfield.
The strength of this solution depends on the timing of development of the second

cargo complex and the need for international air cargo facilities.

Exhibit 5 - Scheme 2

Exhibit 5 indicates a progression of domestic development in the cargo complex with
the international facilities adjacent to the Runway 9R-27L taxiway system. Further domestic
expansion is indicated to the South of Runway 9R-27L.

Advantages:

1 . The Air Freight Forwarders are located in relatively good relationship to the
known present cargo complex and future expansion South of Runway 9R-27L.

2. Ready aircraft access to Runway 27L.

3. The relationship between the ASPCA and the international operations is more
favorable than under Exhibit 4.

48-

Disadvantages;

1 . The plan of the international area is somewhat cluttered and not as clear cut as
either of those shown on Exhibits 4 or 6.

2. Although it is advantageous to have the ASPCA adjacent to the international

facilities it is not essential. Operationally, it is better to have Federal Inspection,
Air Freight Forwarders, ASPCA and international facilities in the same complex.

Exhibit 6 - Scheme 3

Exhibit 6 indicates the gradual growth of the domestic air cargo development
until the present complex is saturated and the development of the South part of a new
complex as a domestic expansion „ The international facilities are shown expanding
gradually immediately South of Runway 9R-27L.

Advantages:

l>The development of the international facilities are well organized.

2. Taxiway construction is minimized.,

3. The functional relationship between international, ASPCA, Air Freight
Forwarders and Federal Inspection areas is good.

4. Plan is more flexible than other schemes.

5. Gives ready aircraft access to airfield in all stages.
Disadvantages:

1 . Depending on the timing of the international facilities additional site

development may be required.
2. Until long range potential volumes are experienced, the volume-distance rate

for the Air Freight Forwarders is greater than under the alternate location plan.

Of the three plans, Scheme 3 appears to be the soundest plan for the cargo complex

development.

-49-

TABLE 3-6
SCHEME I EXHIBIT 4

Based upon 80 foot width Domestic Building and 100 foot width International Building,,

1961 1965 1980

Building Building Building Leased

Space Space Space Area

Sq. Ft. Sq. Ft. Sq. Ft. Acres

Area 1

Area 2 (F.T. )

Area 3

Area 4

Area 5 ( F.F. & U.S. Customs )

Area 6 ( F.F.)

Area 7 ( ASPCA )

Area 8

Area 9

Area 10 International*

Area 11 International*

Total 125,300 520,000 899,000 105.0

* Based on POTENTIAL forecast from Table 2-2.

( F.T. ) - Flying Tiger

(F.F. ) - Freight Forwarders - One floor building

ASPCA - American Society for the Prevention of Cruelty to Animals

91,500

13.6

33,800

60,800

9.0

60,000

7.4

120,000

14.6

60,000

96,000

10.4

24,000

2.8

5,000

10,000

2.0

49,700

80,000

9.2

160,000

18.4

100,000

118,700

18.4

78,000

9.2

-50-

LEGEND

'< 19 6 1

vzmfrA 1965

T" _"! 19 80

(N°) SEE TABLE 3-6 300'

FOR ACREAGE

GRAPHIC SCALE

CHEME " I

EX H I B I T " 4

30 AREA STUDY

600 900

1965 TAXIWAY

INTERNATIONAL AIRPORT

JAN., 1961
8 BROWN - CINCINNATI, OHIO

1965 TAXIWA

CARGO AREA STUDY

CHICAGO- O'HARE INTERNATIONAL AIRPORT

JAN., 1961
LANORUM a BROWN - CI NCI NNATI .OHIO

TABLE 3-7

SCHEME 2 - EXHIBIT 5
Based upon 60 ft. width Domestic Building and 100 ft. width International Building

Land Site

Area 1

Area 2 (F. T. )

Area 3

Area 4

Area 5 ( F. F. - 2 Floors )

Area 6

Area 7

Area 8

Area 9

Area 10

Area 1 1

Area 12

Area 13 ( ASPCA )

1961

BIdg. Space

Sq. Ft.

1965

BIdg. Space
Sq. Ft.

1980

BIdg. Space

Sq. Ft.

Leased

Area

Acres

91,500

13.6

33,800

60,800

.90

90,000

1.35

45,000

7.8

30,000

60,000

7.5

50,000

5.5

45,000

4.9

10,000

66,200

7.3

60,000

8.8

35,700

120,000

17.4

120,000

17.4

23,500

8.8

5,000

10,000

2.0

Total 125,300 495,000 839,000 123.6

( F. T. ) Flying Tiger

( F. F. ) Freight Forwarders

( ASPCA ) American Society for the Prevention of Cruelty to Animals

-52-

LEGEND

H^^H 19 6 1

^S^3 1965

IZZZZ! 19 80

GRAPHIC SCALE

EXH I B IT " 5

(NO) SEE TABLE 3"7 300'

FOR ACREAGE

600 900

3 1965 TAXIWAYS

GO AREA STUDY

INTERNATIONAL AIRPORT
JAN , I96|

I a BROWN - CINCINNATI, OHIO

(SCHEME -2) EXHIBIT-5

CARGO AREA STUDY

CHICAGO- O'HARE INTERNATIONAL AIRPORT
JAN. , I96|

LANDRUM & BROWN - CI NCI NNATI ,OHIO

TABLE 3-8

SCHEME 3 - EXHIBIT 6

Based upon 80 ft. width Domestic Buildings and 100 ft. width International Buildings.

Under

Construction 1965 1980 Leased

Bldg. Space Bldg. Space Bldg. Space Area

Land Site Sq. Ft. Sq. Ft. Sq. Ft. Acres

Area 1

Area 2 (F. T. )

Area 3

Area 4

Area 5 ( ASPCA )

Area 5A* ( ASPCA)
Area 6 ( F. F. - 1 Floor)

Area 6A* ( F. F. - 2 Floors)
Area 7
Area 8
Area 9
Area 10
Area 1 1

91,500

13.6

33,800

60,800

9.0

120,000

1408

60,000

7.4

5,000

10,000

1.2

( 5,000)

(10,000)

(1.2)

60,000

120,000

13.2

Floors )

(30,000)

(60,000)

(10.0)

75,000

8.1

30,000

103,000

15.4

49,700

120,000

14.8

120,000

14.8

18,700

7.4

Total 125,300 525,000 869,000 109.5

( F. T. ) Flying Tiger

( F. F. ) Freight Forwarders

( ASPCA ) American Society for the Prevention of Cruelty to Animals

* 5A and 6A - Alternate Areas

-54-

EXH I B I T" 6

I 980

SEE TABLE 3-8
FOR ACREAGE

1965 TAXIWAY

3 RGO AREA STUDY

900' *E INTERNATIONAL AIRPORT

JAN., 1961
DM B BROWN - CINCINNATI , OHIO

CARGO AREA STUDY

CHICAGO- O'HARE INTERNATIONAL AIRPORT

JAN., 1961
LAN DRUM & BROWN - CI NCI NNATI .OHIO

CHAPTER IV
METHODS OF FINANCE

CHAPTER IV

FINANCIAL AND MANAGEMENT
CONSIDERATIONS

INTRODUCTION

The discussion in this chapter is concerned with the financing of the air cargo area
facilities at Chicago-O'Hare International Airport and the agreements to be written covering
the use thereof. Because of the potential future volume of these activities and the require-
ments of other air transportation and ancillary activities at O'Hare, careful consideration
should be given to the methods of financing used and the leasing arrangements made.

The types of facilities and activities included in these discussions are:

1 . Federal Inspection Services,

2. American Society for the Prevention of Cruelty to Animals,

3. International Cargo Facility,

4. Domestic Cargo Facility, ( excluding those covered by existing agreements ).

5. Air Freight Forwarder Facility.

The financing of the facilities constructed can be provided either by the City or by
a private individual or firm. Careful consideration should be given to all of the factors involved
in deciding the method of financing to be used. Such factors will include, among others, the
following:

1 . The need for the facilities,

2. The means of financing available to the City ( revenue bonds, general obligation
bonds or the corporate fund ),

3. The availability of financing by a private individual or firm.

( Willingness of a private firm or individual to provide such financing ),

4. Management and operational considerations. ( The control over the facilities

-56-

by the City will be influenced by the method of financing used and, conversely,
the desire for control over the facilities will dictate, to an extent, the type
of financing which management may desire to use )„
The primary advantage to the financing of the facilities by the City itself is that
the City can maintain a greater degree of control over the operation of the activities than
if the financing were provided by a private firm or individual „ However, private financing
would relieve the City of the problems attendant to financing the construction of the facilities
themselves. The City has indicated that it is currently thinking in terms of having financing
provided by a private firm or individual. The detailed considerations regarding financing
methods and the best interests of the City are the proper areas for review by the City's
Financial Consultants. The aforegoing observations have been presented simply to show
the major alternatives involved.

Regardless of the method of financing used, the agreements covering the use and
occupancy of the facilities should be written so as to retain for the City as tight as possible
a control over the operations and also to maintain a flexibility so that the operations of
these activities can be made to conform with the operational requirements of O'Hare in the
future.

The following paragraphs list the provisions which should be included in the agreement
between the City and the lessee ( lessees ) covering the use and occupancy of the air cargo
area facilities at Chicago-O'Hare International Airport. This list is not meant to be
complete in respect to all provisions which should be included in such an agreement, but
only to specify certain of the more important fundamental provisions from management's
point of view which should be incorporated into the agreements. Some of the provisions
listed are not applicable, if the financing is provided by the City. Others are not
applicable if the financing is done by private interests.

-57 -

CONSIDERATIONS

1. Premises, Rights and Privileges

A description of the land areas, building and other facilities leased
exclusively to the lessee and the use of the Airport facilities in common with others
( rights of ingress and egress, vehicular and aircraft parking rights and others ) should
be set out in this provision.

2. Term of Agreement

The term of the agreement should be kept as short as possible to maintain
the greatest degree of flexibility if the City does the financing. If private financing
is used, the term of the agreement should be made commensurate with the amount of
investment required, giving consideration to a reasonable period for the write-off of
such investment. In the event of construction by lessee the City should retain the
right to purchase the unamortized balance of the lessee's investment.

3. Use of Premises

This provision should specificially denote the uses which can be made of
the premises covered by the agreement and restrict the lessee from other activities.

4. Construction by City

All construction and installations which are to be provided by the City
should be described in this provision. If the City is to finance and construct the entire
facility, it should be so specified. If, on the other hand, the City is to provide limited
( or no ) construction and installation, it should be similarly specified.

5. Construction by Lessee

This provision should set forth the construction and installations which

will be required to be made by the lessee including the minimum and maximum

-58-

investments. It will not be necessary to include provision in the agreement if the City
is to finance and construct all of the required facilities.

6. Financing of the Construction

i In this provision all limitations should be given regarding the financing to

be provided by the lessee, together with restrictions as to mortgages and liens which the
lessee is allowed to obtain.

7. Rentals and Charges

The applicable rentals and charges pertaining to site, buildings, other
facilities, utility charges, vehicular parking and other ( if any ) should be set forth
in this paragraph.

8. Renegotiation of Rental Rates and Charges

This provision should specify that rental rates and charges applicable to
the lessee shall be revised periodically during the term of the agreement, if the
agreement is made for a long term ( more than five years ).

9. Assignment and Subletting

This provision should specify that no assignment or subletting of the
agreement or the premises covered by the agreement can be made without the approval
of the City. |t should also be specified that the agreement between the lessee and all
sublessees be so written as to make it possible to require any sublessee to vacate the
premises for reasonable cause in the event the City should so desire.

10. Control Over Rental Rates and Charges by Lessee

This provision should provide that the City shall have the right of

-59-

approval on all rental rates and charges made by the lessee provided, however, that
the minimum rates and charges shall be sufficient to permit lessee to recover its
investment ( if any ) and a reasonable return thereon.

This provision should be included if private financing is used. It may
be desirable to include it also if the City provides the financing and construction and
leases the facilities to one or more large operators who, in turn, are permitted to sublet
space.

1 1 . Performance Bond

This provision should specify the amount of the performance bond which
will be required by the City from the lessee to assure performance of the agreement.
It is desirable to have this provision regardless of the method of financing used. However,
the amount of the performance required should be gauged according to the interests of
the City involved in the performance of the agreement and the need for screening tenants
desiring space.

12. Repair of Damages

A provision requiring the lessee to repair all damages to the facilities
( whether covered by insurance or not ) caused by the lessee or its sublessees, or its
or their employees, agents, suppliers or patrons, should be included in the agreement
regardless of the method of financing used.

13. Inspection by Lessor

The right to inspect the premises and to require the lessee to make
any changes or improvements in cleaning or maintenance methods deemed necessary

-60-

or desirable by the City, should be retained by the lessor in the agreement.

14. Expansion of Facilities

This provision should enable the City to require the lessee to expand
the facilities if there is a demonstrated need for such facilities. The details in regard
to the amount and terms of expansion required should also be specified in this provision.

This provision will only be required if the financing of the facilities is
to be provided by private interests.

15. Insurance and Indemnity

This provision should list the types and amounts of insurance which
the lessee is required to carry, and should also indemnify the City against all losses,
damages and claims caused by or arising from the operation of this activity. It should
further specify how the proceeds of fire and extended coverage insurance shall be
distributed between the parties, how they will be spent, and the condition upon
which the facilities shall be repaired, restored or abandoned.

This provision should be included in the agreement no matter which
method of financing is used.

16. Cancellation by the City

This provision should give the notice requirements and reason for
cancellation of the agreement available to the City. Specifically, this provision
should include among the reasons for cancellation non-performance by the lessee,
( especially non-payment of rentals ) bankruptcy, insolvency and similar reasons.

-61 -

If private financing is used, the notice period might be made longer
than if the lessee is not required to make a substantial or any investment in facilities.
Ninety days would appear to be a reasonable maximum notice period under most
circumstances „

17. Cancellation by the Lessee

Cancellation rights of the lessee should be specified in this provision.
Circumstances under which the lessee may cancel should be limited to non-performance
of the agreement by the City and inability to use the airport for an extended period of
time.

18. Rules and Regulations

This provision should require the lessee to conform to all reasonable
rules and regulations promulgated by the City for the operation of O'Hare Field.
This provision should be included no matter which method of financing is used.

19. Surrender of Facilities Upon Termination of Agreement

This provision should require that the facilities will become the property
of the City upon the termination of the agreement, whether by expiration of the term or
earlier termination as provided for in the other provisions of the agreement. |t should
also specify that the property shall be in good condition ; reasonable wear and tear
excepted.

This provision should be included if the financing is provided either
by the City or a private firm or individual. If financing is provided by the City, the
provision should specify only that the lessee be required to surrender the premises in
as good condition as received, reasonable wear and tear excepted.

-62-

20. Signs

The provision should specifically restrict the erection of advertising
and other signs on the premises, except within buildings, unless such signs shall
have first been approved by the City in writing.

The aforegoing list of provisions does not include those which are regarded as
standard provisions in most agreements or those which are anticipated to have a
significant effect upon the operation of the airport.

Other considerations in respect to the individual activities in the air cargo area
which should also be covered in the agreements are:

1 . Federal Inspection Services - the customs bureau does not build or rent space
at airports for federal inspection services. Space should be provided by the
international air carriers through rental of facilities from the City or construction
by the air carriers.

2. American Society for the Prevention of Cruelty to Animals - if there is a
request by the organization and an area is available, ground space should be
leased by the City to the Society for the construction of their required
facilities.

3. Roads, Utilities, Site Preparation and Airfield Paving - a substantial cost in
providing these facilities, much of which will be used jointly by tenants,
cannot be specifically assigned to any user or group of users. Such costs
should be recovered by the City through the basic land rental charges.

In summary, of primary importance to the City are the following:

A. The flexibility to either remove the lessee's operations from the initial
site or from the airport itself if the City deems it necessary.

-63-

B. The ability of the City to share in materially increased revenues if
such should be realized by the lessee.

C. The clear understanding that the lessees are subject to the rules and
regulations of the City at all times.

-64-

APPENDIX A

-65

A
P

P
E
N
D
I
X

LANDRUM AND BROWN
309 Vine Street
Cincinnati 2, Ohio

September 21, 1960

Commissioner William E. Downes, Jr.
Commissioner of Aviation
City Hall
Chicago, Illinois

Dear Commissioner Downes:

This is a brief interim letter report concerning Chicago-O'Hare air cargo
facilities to set forth the general status of planning to date. The data given in this
letter is presented as information, not as a definite solution.

A general chronological listing of events to date is:

First 6 months of 1960 - Letters to Mr. Downes from individual firms regarding
space information at Chicago-O'Hare International Airport.

June 1960 - Letter to individual Freight Forwarders and answers from several
Freight Forwarders concerning their required space. This item was by
Mr. R. Ro Mitchell of United Airlines.

July 27 ', 1 960 - Questionnaire sent out to 45 Freight Forwarders in the Chicago
area by Landrum and Brown. Answers received from eleven.

August 17, 1960 - Analysis of questionnaires and plan studies for meeting in
Chicago with Freight Forwarder officials, Chicago Department of Aviation,
Airline Technical Committee Representatives, Naess and Murphy representatives
and Mr. Landrum.

Letter report this date -

Landrum and Brown sent out questionnaire* forms to 45 Freight Forwarders in
the Chicago area. Eleven of these forms were returned the first week of August, 1960.
A summary of the space requirements requested by the eleven Freight Forwarders who
returned questionnaires is given in Table I.

Table I indicates that the air Freight Forwarders wish approximately 67,000 square
feet of space for 1965. By comparison with other large airport hubs this figure seem some-

Commissioner William E. Dowries, Jr.
Page - 2 -

what high,.

The international carriers in 1959 requested approximately 9,250 square
feet. For 1965 this quantity appears low. A questionnaire was forwarded to the
international carriers in August. Their revised requests along with Federal inspection
requirements will be reported later.

Two of the domestic carriers have requested in the magnitude of 100,000
square feet of space.

The other domestic carriers either occupy or have requested approximately
40,000 square feet in the first stage.

Air Express is assigned approximately 15,500 square feet in the first stage.

The Flying Tiger lease is established in the master plan.

The two air cargo buildings ( one 50 feet wide, the other 72 feet wide ) now
being constructed total 91,500 square feet ( not including Flying Tiger ). The three
remaining cargo building sites shown on the master plan will produce 1 12,500 to
192,000 square feet additional space, with the exact quantity depending on the building
widths.

The total space indicated as needed is as follows:

Air Freight Forwarders 67,000 sq. ft.

International Carriers 10,000 sq. ft.

Domestic Carriers 100,000 sq. ft.

Other Domestic Carriers 40,000 sq. ft.

Air Express 15,500 sq. ft.

Total 232,500 sq. ft.

This compares to the 91,500 square feet being built plus three added buildings
totalling 1 12,500 or 192,000 ( depending on building widths ) for a total of from 204,000
to 283,000 square feet. Thus, if all requests are honored, there would be an excess of
space in the first stage only if the three new cargo buildings are more than 63 feet in width

-2 -

Commissioner William E. Dowries, Jr.
Page - 3 -

Schemes 1 , 2 and 3 attached were "quick" studies made to present possible
solutions to the problem in the first stage, using only the first stage cargo complex.
Neither of these plans are suggested as a final solution, as each presents certain
problems.

Further studies are in progress considering the use of a cargo complex No. 2
south of future runway 27L and parallel to relocated Manheim Road. As soon as these
studies are complete, a recommended course of action will be submitted for your
consideration .

Respectfully submitted,

LANDRUM AND BROWN

^X^T.

<f. ^

Chas. O . Landrum

COL/wg

Enclosures: 1 . Schemes 1 , 2 and 3.

2. Typical Plan "A" and "B'\

3. Letter and questionnaire sent to Air Freight Forwarders

4. List of Forwarders receiving letter and questionnaire.

-3-

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LANDRUMAND BROWN
Phone: 309 Vine Street

PArkway 1-1149 Cincinnati, Ohio

July 27, 1960

Gentlemen:

Recently there have been a number of requests for additional cargo building
space at Chicago-O'Hare International Airport.

On June 7, 1960 a letter request for an indication of desired facilities located
at Chicago International was forwarded to certain Air Freight Forwarders by Mr. R. R.
Mitchell of United Airlines. Certain answers indicating the scope of need have been
received by United.

Commissioner William E. Downes of the Chicago Department of Aviation has
instructed our firm to develop a program of specific need for these cargo functions and
to present general methods of solving this problem.

As time is of the essence in this phase of the work, the following time table has
been established:

A. Distribute letter and questionnaire July 27, 1960.

B. Completed questionnaires returned to Landrum and Brown on or before
August 8, 1960.

C . Landrum and Brown analyze questionnaires and master plan August 8 to
August 15, 1960.

D. Group meeting of all interested parties 10 A.M., Wednesday August 17th
in Chicago Planning Commission conference room, 10th floor, City Hall,
Chicago, Illinois, to review a basic operating plan and concept.

E. As soon as feasible following August 17, resolve a financing plan, resolve
negotiations, complete plans and initiate construction.

Attached to this letter are copies of a questionnaire and a general explanation sheet
If you are interested in cargo space at Chicago International, will you please complete and
return the questionnaire. An addressed stamped envelope is attached for your convenience.

Page - 2 -

July 27, 1960

If we do not receive your questionnaire by August 8, 1960 it will be assumed
that you require no space and no provision will be made for your operation in the planning,

If there are any questions or a desire for further information please do not hesitate
to contact Mr. Charles Landrum or Mr. Nelson Aaronson at the letter head address or
telephone number.

Sincerely,

LANDRUM AND BROWN

Charles O. Landrum

COLAa
End.

- 12 -

General Explanation Notes

1 . It is assumed that the Air Freight Forwarder facilities will be near or
adjacent to the main cargo complex.

2. For preliminary concept, assume the following general building specification:

a . Building 60 to 80 feet wide and of length needed to serve all users.

b. A truck dock approximately 46 inches high on one side of building.

c. Truck dock 8 to 10 feet wide.

d. Roadway at building floor level on side of building opposite truck dock,
approximately 24 feet wide.

e. Bays 24 feet on center producing 1,440 sq. ft. and 1,920 sq. ft. respectively
for 60 and 80 foot building widths.

f. Two 10 x 12 foot overhead doors per bay on each side of the building.

g. A 13 ft. minimum clear ceiling height,
h. Twenty to 30 foot candles illumination.

i . Heat at 55 degrees minimum for warehouse area,
j . Central toilet and utility area.

3. Assume user will install at their own expense office partitioning, air conditioning
or other facilities improving warehouse space.

LANDRUM AND BROWN
309 Vine Street
Cincinnati 2, Ohio

- 13-

AIR FREIGHT QUESTIONNAIRE

CHICAGO-O'HARE INTERNATIONAL AIRPORT

User:

-Activity
Warehouse
Office
Other

Area in Square Feet

Total Space

Client- Auto Parking
Employee Auto Parking
Trucks at Dock
Peak Shift Employees
Total Employees

Enplaned Cargo
Deplaned Cargo

Comments:

'resent

1965

1970

Number of Units

'resent

1965

1970

•Number of Tons

Present

1965

1970

Landrum and Brown
309 Vine Street
Cincinnati 2, Ohio

-14-

LIST OF AIR FREIGHT FORWARDERS

I. Acme Air Cargo, Inc
1512 W. 63rd Street
Chicago,

mois

2. Airborne Freight Corp.
5500 W . 47th Street
Chicago, Illinois

3. Air Cargo, Inc.
5500 W . 47th Street
Chicago, Illinois

4. Air Dispatch, Inc.
Koerner Motor Express
5421 W. 63rd Street
Chicago, Illinois

5. Bernacki, Peter A., Inc.
5100 W. 63rd Street
Chicago 38, Illinois

6. Emery Air Freight Corp.
Room 21 12 Prudential Plaza
Chicago 1 , Illinois

7. W. T« C. Air Freight
1003 W. Huron
Chicago, Illinois

8. Wings & Wheels Express, Inc,
5100 W. 63rd Street
Chicago 38, Illinois

9. American Shippers
2642 W. Arthington
Chicago, Illinois

10. Air Freight, Inc „

222 W. Roosevelt Road
Chicago, Illinois

1 1 . Air Express International Corp.
6217 W. 63rd Street
Chicago Midway Airport
Chicago 38, Illinois

12. Air-Land Rocket Air Freight
6016 S. Central
Chicago, Illinois

13. Airways Parcel Post Service, Inc
6453 S . Cicero

Chicago, Illinois

14. Four - A Air Freight Corp.
5719 No Central Avenue
Chicago 46, Illinois

15. General Air Freight

1003 W. Huron Street
Chicago 22, Illinois

16. Hawaiian Freight Forwarders, Inc,

120 E. S. Wtr.
Chicago, Illinois

17. Pan Maritime Cargo Service, Inc.
5500 W. 47th Street
Chicago, Illinois

18. Shulman, Inc.
26 N . Aberdeen
Chicago, Illinois

-15-

LIST OF AIR FREIGHT FORWARDERS

19. United Parcel Service, Air, Inc.
331 E. 38th Street

New York, New York

20. A. Able Trucking Co.
1125W. Lake
Chicago, Illinois

21 . AAA Special Delivery Service
638 N. Ashland
Chicago, Illinois

22. ASA International Airlines
608 S. Dearborn
Chicago, Illinois

23. Aerial Special Delivery
4751 W. 63rd Street
Chicago^, Illinois

24. Airline Cartage, Inc.
5331 S. Keating
Chicago, Illinois

25. American Freight Forwarding Co.
2550 W . 26th Street

Chicago, Illinois

26 . Andrews DC & Co of Illinois , Inc.
327 S. LaSalle

Chicago, Illinois

27. Barnett International Air Freight Service
5500 E . 28th Street

Chicago, Illinois

28. BOR Air Freight Company, Inc.
41 15 Skokiana

Skokie, Illinois

29. Cannon Ball Bonded Special

Delivery Service
412 N. Wells
Chicago, Illinois

30. City Bonded Messenger Service

193 N. LaSalle
Chicago,, Illinois

31 . Courier, Ltd.

4217 W. 59th Street
Chicago, Illinois

32. Florida Freight Terminal Inc.
5500 W o 47th Street
Chicago, Illinois

33. Highwinds Air Charter, Inc.
4848 W. 63rd Street
Chicago, Illinois

34. Holland Highway Express Inc.
5500 47th Street

Summit, Illinois

35. International Expediters, Inc.
200 E. Illinois

Chicago, Illinois

36. KHS Air Freight Service
4848 W. 63rd Street
Chicago, Illinois

37. Lincoln Storage & Moving Co., Inc
4259 S. Drexi

Chicago, Illinois

38. Mercury Messenger Service, Inc.
420 N. Wells

Chicago, Illinois

- 16 -

LIST OF AIR FREIGHT FORWARDERS

39. Midway Air Freight Service
6550 So Keating
Chicago, Illinois

40 o Midwest Delivery Service
2641 S. Whipple
Chicago, Illinois

4K Pacific Air Freight Inc.

2641 S.Whipple
Chicago, Illinois

42. Parcelair System

Division of American Shipper, Inc

2642 W. Arthington
Chicago, Illinois

43. Republic Air Freight

Div. of Republic Carloading &

Distributing Co., Inc.
608 S. Dearborn
Chicago, Illinois

44. Soper MA Company
2221 W. Walnut
Chicago, Illinois

45. Wi I lett Company

5045 S. Pulaski
Chicago, Illinois

46. Inland Forwarding, Inc.
900 South Wells Street
Chicago 7, Illinois

- 17 -

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