Amazon to develop new US e-commerce air hub at Newark Airport

E-commerce giant expected to transform two existing structures into a new state-of-the-art air cargo campus with a targeted investment of $125m for renovation.

The Port Authority of New York and New Jersey (PANYNJ) has announced a 20-year lease with Amazon Global Air to re-develop and expand air cargo facilities at Newark Liberty International Airport – “a major step forward in providing world-class air cargo service across agency airports in an increasingly dynamic market.”

It follows a request for proposals (RFP) issued in May to pre-qualified firms “to lease, operate and maintain two of the airport’s major cargo buildings”, through renovations “that will dramatically enhance Newark Liberty’s air cargo operations”.

The decision in favour of Amazon “paves the way for upgrading the existing space, including high utilisation for e-commerce package sortation and incremental cargo activity, as well as providing the most highly positive revenues for the Port Authority. It is expected to lead to the creation of more than 1,000 jobs at the airport,” PANYNJ said.

Amazon is expected to transform two existing structures, Buildings 339 and 340, into a new state-of-the-art air cargo campus with a targeted investment of $125 million for renovation.

PANYNJ continued: “No Port Authority capital funding will be required in support of this transaction. The lease, which remains subject to final negotiation and is expected to take effect later this year, will provide the Port Authority a lump sum upfront payment of $150 million and another $157 million in additional rent over the life of the 20-year agreement, which covers about 250,000 square feet of cargo space on 23 acres at Newark Liberty.”

Governor Phil Murphy said: “Air cargo is vital to the international supply chain, and with this new partnership, Newark will continue to be a global leader in logistics. This new e-commerce hub will provide needed revenue to the Port Authority while also bringing new jobs to our state.”

Port Authority executive director, Rick Cotton, commented: “The exciting air cargo project that the Board has authorised marks the latest important step in this agency’s commitment to shaping the future of air cargo by expanding capacity at Newark Liberty and by customising the delivery of world-class air cargo operations and services.”

An Amazon spokesperson said the company was “excited” at being recommended as the best partner to occupy air cargo space at Newark Airport, adding: “While the lease remains subject to final negotiation, this is a positive step forward.”

Local air cargo remains “an essential link in the global supply chain and a critical driver of New York-New Jersey economic growth”, PANYNJ noted.

“Overall, air cargo supports 22,000 jobs, $4 billion in sales and $1.5 billion in overall wages throughout the Newark region. As customers and vendors continue to turn to online outlets for commerce and goods, Newark has become the regional hub for small packages,” it added.

Source: Lloyd’s