Legislators Hear of Road Improvement Needs for Amazon Hub at CVG
Cincinnati/Northern Kentucky International Airport officials briefed a group of state legislators Friday on road improvements needed to support a $1.5 billion freight hub Amazon is building at the airfield.
“While the predominance of package movement will be plane to plane, there is also a need to expand road infrastructure,” airport CEO Candace McGraw said during the meeting of the Interim Joint Committee on Transportation.
In response to a question from committee co-chair Sen. Ernie Harris (R-Prospect), McGraw named a series of roads surrounding the airport that need improving. She added that the 3 million-square-foot package sorting facility is projected to create 2,000 new jobs at its initial opening.
McGraw said Amazon officials told her they selected the airport for the e-commerce giant's first air hub because it had a great airfield infrastructure that was well maintained, highway infrastructure leading to it, a trained aviation workforce and officials who moved at the speed of business.
“I say that to emphasize that investing in infrastructure now ... has a huge impact in the future,” McGraw said. “If we didn’t have those things, we would not have been able to close this deal.”
This is not the first package hub at the airport. McGraw said the airport is also a global super hub for DHL.
"We are their primary location in the Americas," she said, adding that DHL employs 4,200 people and operates 96 daily flights at the airport. It the international shipping conglomerate’s second-largest hub, eclipsed only by the company’s operations in Leipzig, Germany.
Until construction is completed on the Amazon’s hub, the e-commerce company is working out of DHL’s hub. DHL sorts its packages at night while Amazon sorts its packages during the day. The first phase of the Amazon facility is expected to be completed in the third quarter of 2021. Construction will continue through 2030 before the entire 450-acre Amazon hub will be fully operational.
A second smaller cargo facility is being built to handle FedEx packages. That shipping company has two aircrafts based out of the Northern Kentucky airport.
All the package-handling growth has made the Northern Kentucky airport the eighth-largest cargo facility in North America and fastest-growing in the United States. McGraw said the airport was “on the cusp” of becoming the seventh largest. The airport handled more than 1.2 million tons of cargo last year.
McGraw said this has spurred the aircraft maintenance and engineering company FEAM Aero to build a $19 million, 103,000-square-foot maintenance hangar at the airport. When completed, that facility will employ 100 workers with annual salaries starting at about $65,000.
“We do not operate on local tax dollars,” McGraw said. “We are actually a tax generator for the commonwealth.”
She said the airport gets its income from, among other things, airplane-landing fees, parking revenue and developing and leasing industrial buildings on its campus.
The airport supported more than $21 million in income tax revenues for Kentucky and more than $4 million for Ohio, according to a 2016 study by The Economic Centers at the University of Cincinnati and Northern Kentucky University. Of the 14,000 people employed on the airport’s campus, McGraw said 52 percent are Kentucky residents, 38 percent are Ohio residents and 10 percent are Indiana residents.
Sen. Gerald A. Neal (D-Louisville) asked whether security protocols for working on the airport campus hampered hiring. McGraw said it was challenging to find employees who could pass the required 10-year background check. She said prior drug convictions eliminate a large number of otherwise qualified candidates.
McGraw said the airport was working with Kentucky schools to develop supply chain management curricula to foster interest in the field and ease the labor shortage in the future.
From the Legislative Research Commission