UPS Inc. said today it will build an 840,000 square foot regional package sorting hub in Salt Lake City that when finished late next year will become one of the largest processing facilities in the company's global network.
The facility, to be built on 160 acres at a cost of $275 million, will function as UPS' Mountain West hub, the company said. It will have capacity to process up to 69,000 packages per hour, according to the Atlanta-based transport and logistics giant. It will compliment UPS' existing 200,000 square foot facility in Salt Lake City. UPS currently employs more than 3,500 workers across Utah in package, heavy freight, and contract logistics operations.
The project is the latest step in UPS' multiyear initiative to expand and modernize its physical and IT networks to accommodate package growth and a secular change in its mix to more business-to-consumer (B2C) shipments driven by surges in e-commerce volumes. Next year, the company is expected, for the first time ever, to handle more B2C shipments than business-to-business (B2B) traffic.
Over the past three or so months, the company announced plans to build facilities in Atlanta, Columbus, Ohio, and expand its existing facility in Jacksonville, Fla. It will also fully automate its 30 busiest U.S. hubs, known as "Tier 1," a program that the company said will yield 20 to 25 percent in productivity improvements per facility by the time all the work is done in 2020.
Earlier this week, UPS disclosed it had begun regularly scheduled U.S. ground pickups and deliveries on Saturdays, the first time in its 110-year history it has offered the Saturday ground service. The company expects to roll out the program to half of the U.S. population by year's end. UPS already provides Saturday pickups and deliveries to support its air operation.
At the time of the announcement, UPS Chairman and CEO David P. Abney said the company had embarked on the "most sweeping transformation of our network" in its history. Abney said UPS said it will expedite the development of a "smart logistics network" designed to capture more share of e-commerce, both for B2B and B2C traffic.