UPS Inc. (NYSE:UPS) said late on May 15 that it has completed a multi-year, $300 million expansion of its key ground sorting and distribution hub in Louisville, Kentucky, tripling its size to more than 1 million square feet and doubling its package processing capacity to about 85,000 packages per hour.
The project is critical to Atlanta-based UPS’ operations because the facility, known as “Louisville Centennial,” sits just a couple of miles from the company’s “Worldport” global air hub at Louisville Muhammad Ali International Airport. Packages are inserted at the hub into the UPS air network for next-day or same-day delivery if the parcels are funneled through by the cut-off of 1:30 a.m. With the expansion, the hub will funnel even more parcels into its air operations, supporting fast deliveries to e-commerce customers, UPS said.
The hub also handles routing and loading of parcels moving in trailers across the country or onto package cars for deliveries in and around the Louisville area, UPS said. Air imports whose destination is Louisville are trucked from Worldport to Centennial and put on a package car for local delivery. Imports bound for other cities are placed on a plane or truck at Worldport for delivery.
The expansion is part of UPS’ multi-billion-dollar plan to erect multiple “super hubs” designed to increase throughput by about 30 to 35 percent over traditional hubs due to highly advanced automation. The expansion is projected to add 350,000 to 400,000 pieces per hour of sortation capacity in the U.S. each year between 2018 and 2020. The construction of five such hubs, located in Phoenix, Arizona; Atlanta, Georgia; Indianapolis, Indiana; Dallas/Ft. Worth, Texas; and Salt Lake City, Utah will add more than 5 million square feet of capacity, UPS said.
By the time the project is completed in 2022, all of the company’s “eligible” U.S. volume will move through highly automated hubs, up from 50 percent as of December 2018, UPS said. UPS moves more than 20 million parcels through its global system each business day.