UPS hub will get $1 billion expansion
Posted on Thursday, May 18, 2006
LOUISVILLE, Ky. — UPS Inc. announced plans Wednesday for a second $ 1 billion expansion at its main air hub in recent years, this time adding 5, 000 jobs as the world’s largest shipping carrier anticipates strong growth in global commerce.
The latest project will add 1. 1 million square feet to the sprawling air hub known as UPS Worldport, making it bigger than 113 football fields.
The computerized sorting system installed four years ago will feature 197 miles of conveyors once the expansion is finished by 2010.
The expansion will help meet customer expectations for “more speed, more reach and more capacity,” said Bob Lekites, UPS vice president of airline and international operations. “We’re making Worldport, already the world’s largest package facility, even bigger.” “We anticipate strong growth in global trade to continue for years to come,” UPS Chairman and Chief Executive Officer Mike Eskew said in a statement. “Expanding the centerpiece of our worldwide infrastructure is absolutely necessary to support the long-term needs of our customers.” The Atlanta-based company’s other $ 1 billion investment in its Louisville hub more than doubled its sorting complex to 4 million square feet in 2002 and featured the labyrinth of conveyors for sorting packages bound for global destinations.
State Economic Development Secretary Gene Strong said UPS would be eligible for up to $ 51. 6 million in state and local tax incentives over 10 years. He called it fair “given the magnitude of the investment and employment opportunities.” UPS said the expansion would start this year. Once completed, the hub’s sorting capacity will grow by 60 percent to more than 487, 000 packages per hour.
“Everything about this project is big,” said Brendan Canavan, a UPS vice president of air operations.
About 260 flights come in and out of the Louisville hub each day that connect it with more than 200 countries and territories worldwide.
Louisville Mayor Jerry Abramson said the hub, next to Louisville’s main airport, is a key asset in trying to encourage business growth in the city. “It gives us an international calling card for economic growth,” he said.
Gov. Ernie Fletcher said the direct economic impact for Kentucky will be $ 344. 8 million from the jobs, and he put the indirect economic impact at $ 400 million from other companies moving to the area.
The air hub now employees about 7, 500 of 18, 000 UPS workers in Louisville. Additional workers hired as part of the new expansion will fill about 1, 200 full-time and 3, 800 part-time jobs. The full-time jobs will result in annual payroll exceeding $ 100 million, Canavan said.
UPS started its air operations in Louisville in the early 1980 s with seven leased aircraft and about 100 employees.
The latest expansion will include three additional aircraft loading wings along with the installation of high-speed conveyor and computer systems.
The project comes after UPS recently added up to 1, 500 parttime jobs and undertook an $ 82. 5 million expansion of its Louisville hub, which will add a new 700, 000-square-foot building to handle heavy freight equipment.
It comes on the heels of several other expansions within UPS to handle international and domestic air growth. Since the start of 2005, UPS has announced plans to open a China air hub by 2007, doubled its European air hub in Germany and expanded its Asian air hub in the Philippines, Lekites said.
Shares of UPS fell $ 1. 03, or 1. 3 percent, to close at $ 79. 73 on the New York Stock Exchange on Wednesday.
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