Intermodal cargo operation springs up near old airport terminal

Weeds now outnumber the cars that used to park near Indianapolis International Airport’s old passenger terminal, abandoned three years ago when the midfield terminal opened.

But two vacant lots in this no-man’s land are again packed with metal—only this time they’re intermodal cargo containers.

Ryki Logistics’ Keystone Terminals, 1601 S. High School Road, could be a vision of things to come for this once-bustling 400 acres on the northeast corner of the airport.

Four months ago, the Indianapolis Airport Authority signed a four-year lease with Ryki to operate a staging area for the intermodal containers. Now a virtual city of corrugated metal containers spans both sides of High School Road, just south of Washington Street.

This area of the airport was identified in a long-term study the authority released earlier this year as a future logistics park.

Ideally, goods shipped by truck, rail and air will be processed here and generate millions of dollars a year in revenue for the airport, and perhaps hundreds or even thousands of jobs. There’s already more than 2 million square feet of direct airfield access at the old terminal that could accommodate air freighters.

Keystone Terminals is more of a baby step, however.

The complex is not processing cargo via aircraft, nor does it directly use the CSX railroad tracks right next to it. Rather, most of the containers are trucked here from intermodal rail yards in Chicago. Many of the containers originate from Asia, arriving in West Coast ports by ship and then sent by rail to Chicago.

But that could change if the CSX yard in nearby Avon ever becomes a big player in intermodal shipping, noted David Holt, VP of logistics initiative Conexus.
In recent years, the Avon yard has received a relatively small percentage of its freight directly from ports in California.

But Keystone Terminals is positioning itself to take advantage of a much-hoped-for increase in intermodal activity just down the tracks, Holt said.

“That [airport location] is the back door to Avon," he noted.

"Being really close to the CSX [yard] is the ultimate for us," said Craig Newlin, president and CEO of Ryki. "I've been eyeballing that property for a long time. If there's any way we could get that West Coast service, we'd be hitting out of the ballpark."

The CSX yard already receives freight from the East Coast, with links to Europe. The Keystone yard, which employs 15 people, also benefits from the airport location because of its U.S. customs facility. The airport also has foreign trade zone designation, allowing shippers to avoid customs duties under certain circumstances.

"I have a lot of import customers that would like to take a look at that eventually," Newlin said. The yard, which also stores containers for steamship lines, doesn't receive air cargo moved through Indianapolis International, but Newlin said he's eyeing possibilities.

“What they do is an intriguing business model from our standpoint,” said Mark Hedegard, senior director of business development for the airport authority.  “It’s a laboratory right now” for the airport, he added.

The Keystone facility is an example of a good interim opportunity as the airport considers longer-term uses for the land, said Carlo Bertolini, spokesman for the authority.  “There is an early-termination option should such a use be identified.”

The area Ryki leases on the northeast corner of the airport is ideal for logistics because it’s bordered by Washington Street and Interstate 465, in addition to having a CSX track. The airport’s long-term development study said the zone could accommodate freight forwarders, fast-cycle logistics firms, perishables, e-fulfillment and light manufacturing.

It’s one of seven zones identified for development potential in a study by Landrum and Brown, which estimates the potential income to the airport authority from all the zones at $30 million to $63 million by 2040.

The airport is already home to FedEx’s second-largest domestic cargo hub. Last fall, FedEx initiated the first regularly scheduled direct cargo flights from Hong Kong to Indianapolis.