August 1, 2016

UPS to fully automate 30 largest U.S. hubs

Project to yield up to 25 percent in productivity improvements by 2020, U.S. chief says.

By DC Velocity Staff

UPS Inc. is in the process of fully automating its 30 busiest U.S. package and delivery hubs, a four-year program that will yield 20 to 25 percent in productivity improvements per facility by the time the work is done in 2020, according to UPS' head of U.S. operations.

The automation will encompass 27 ground hubs and 3 air hubs, known as "Tier 1" hubs, which handle about 60 percent of the Atlanta-based giant's volume, Myron Gray told analysts Friday as UPS released its second-quarter financial results. UPS handles about 18.3 million shipments a day worldwide.

Gray did not address the total cost of the project, or the timing of each hub upgrade. The productivity improvements will be determined on a per-facility basis rather than as an aggregated figure, according to Steve Gaut, a UPS spokesman.

UPS disclosed the program in late 2014, and has made details available on a piecemeal basis since then. Several of the announcements over that time have involved the opening of more-modern facilities where an existing and smaller building will be integrated into the new location, according to Steve Gaut, a UPS spokesman.

Gray's comments are about as open as UPS has been up until now about the project's scope and timing, Gaut said in an e-mail.

UPS' hubs possess varying degrees of automated capabilities, Gaut said. Its main global hub in Louisville, known as "Worldport," is an example of a highly automated facility, he said.

UPS has budgeted $2.5 billion for capital expenditures during 2016.

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