In an effort to keep up with rising e-commerce and traditional package volume, UPS Inc. will spend $300 million to triple the size of its ground-package sorting facility in Louisville, Ky., the company announced Thursday.
When completed in 2018, the hub will occupy 838,000 square feet, add more than 300 full- and part-time jobs to the distribution center, and nearly double its package-processing rates, the Atlanta-based company said.
Known as the "Centennial" ground hub, the location provides pickup and delivery operations for customers in Louisville and surrounding counties, and serves as a transfer point for trailers moving to destinations beyond Kentucky. The ground hub is located just two miles from Louisville International Airport, home of UPS' "Worldport" primary global package-sorting operation. Each day and night, the ground hub sends express packages to Worldport that can move to any of 220 countries and territories. In turn, the ground hub receives packages from Worldport destined for delivery to Louisville and surrounding areas.
The close proximity of the two facilities means that the ground hub can move express packages to Worldport up until midnight and even later, and still make next-day delivery commitments, said Jeff Wafford, a Louisville-based UPS spokesman.
"As e-commerce and retail volume continues to grow, the expansion affords UPS additional package-processing capacity and flexibility," Wafford said.
The expansion is just one of a number of hub modernization projects UPS is launching to allow it to boost capacity enough to handle ballooning parcel-shipping volumes in the e-commerce age, the company said.
"This hub upgrade enhances UPS's transportation and logistics capabilities and represents a continued commitment to our customers," Lou Rivieccio, president of UPS's Ohio Valley District, said in a statement. "UPS has worked with Kentucky economic-development officials to be a catalyst for business growth in the area and to link with our air operations as a gateway for global trade."
UPS said it would continue running pickup and delivery operations throughout the project's construction.
The company said it would retrofit the ground hub with automated conveyors in order to move packages through the sort process, capture package data, and route volume to proper load positions. It will also replace traditional scanning equipment with six-sided decode tunnels, allowing workers to capture package information from address labels. Label applicators will also place "smart labels" on packages for local delivery, providing UPS loaders and sorters faster instruction on proper loading.