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            september 22, 2019

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UPS plans to double its sorting capacity


Atlanta-based United Parcel Service (UPS) plans to double its sorting capacity at Memphis International Airport, which is also home to the FedEx Express global SuperHub where many of its packages are processed, according to the Shipping Gazette.
Airport officials who have been in negotiations with UPS expect the company to spend US$25 million and hire 100 new employees for an expanded sorting facility. It serves part of UPS' Memphis ground delivery fleet and two flights a day connecting Memphis with Louisville, Kentucky, home of UPS Worldport.
UPS' expansion is a sign of continued strength in cargo traffic at Memphis despite the woeful erosion of passenger service, which has dropped from 300 daily flights in 2000 to 100, according to Memphis Commercial Appeal.
Cargo, nearly all of it carried by FedEx, is anchoring airport finances while officials campaign to attract new passenger service to fill a void left by Delta Air Lines. Delta dropped to 64 flights on peak days and stopped calling Memphis a hub on September 3.
"Our success on the cargo side will help us as we continue our relentless quest for affordable, frequent passenger service," Memphis-Shelby County Airport Authority chairman Jack Sammons said.
Airport CEO Larry Cox said a larger UPS presence "is good for Memphis companies. Competition is always good, and they're fierce competitors. Memphis is such an important logistics hub they have to be as strong as they possibly can here."
FedEx had nothing to say about the UPS move.
While it would substantially increase UPS' footprint, the project won't challenge FedEx's dominance at Memphis, the world's second-busiest air cargo hub behind Hong Kong. The FedEx Express world hub handles 99 per cent of air freight moving through the airport. UPS is a far-distant second.
The airport authority recently approved leasing UPS an additional 108,696 million square metres and an option to lease another 92,903 square metres. UPS already has about 334,450 million square metres under lease. The lease and option would generate $220,000 more a year in rent and create potential for additional landing fees and related revenues.
By comparison, FedEx has 2.8 million square metre under lease, 11,000 employees, 250 flights a day and sorting capacity of 500,000 packages, documents and letters an hour.

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