Massive expansion slated for main UPS air hub
UPS, the world’s largest package delivery company, announced plans Wednesday for a $1-billion-plus expansion of its Louisville, Ky. Worldport anchor hub that will increase its package sorting capability during the next five years by 60 percent to 487,000 packages per hour.
Atlanta-based UPS said it will build three jetway wings with 40 docks for loading and unloading aircraft, new ramp space to accommodate the super jumbo Airbus A380 and 747-400 cargo planes now on order, a new vehicle loading facility for trucks serving the Louisville area, and install 75 miles worth of high-speed conveyors and computer systems to control the flow of packages through the facility.
UPS said the expansion, which will increase Worldport’s size by 1.1 million square feet to 5.1 million square feet, was needed to keep up with strong demand for domestic air and international package service.
UPS Next Day Air volume has grown an average of nearly 5 percent a year since 2003, and import volumes have grown at a double-digit rate for the last four years.
Construction will begin later this year and is scheduled to be completed by 2010. UPS said the expanded facility at Louisville International Airport will create 5,000 full and part-time jobs.
Gov. Ernie Fletcher said the Kentucky Economic Development Finance Authority has granted preliminary approval for $31.6 million in tax breaks over 10 years as an incentive to UPS to keep the project and jobs within the state.
UPS is also expected to qualify for $20 million in benefits during the next three years under a 2005 tax initiative that allows approved companies making an investment of $500,000 or more in Kentucky to recoup Kentucky sales and use taxes on the cost of construction materials and building fixtures and equipment.
UPS doubled the size of the Louisville air facility in 2002 to 4 million square feet — a project that took seven years and more than $1 billion to complete. It is putting the final touches on an $82.5 million, 700,000-square-foot facility adjacent to its package operations to accommodate heavy freight shipments following the December 2004 acquisition of Menlo Worldwide Forwarding and the subsequent decision to close its sort facility in Dayton, Ohio.
The package delivery and logistics provider has also been expanding its network of overseas facilities. Since the start of 2005 the company has announced plans to begin operating an air hub in China by 2007, significantly expanded the capacity of its intra-Asia air hub in the Philippines, and completed the expansion of its European air hub in Cologne, Germany, doubling its capacity.
The move comes on the heels of last week’s news that FedEx will expand its Indianapolis airport hub by 600,000 square feet and package capacity by more than 30 percent to 99,000 packages per hour. FedEx’s main hub is in Memphis.