UPS to expand Memphis-based package distribution facility

Transportation and logistics giant UPS said this week it kicked off construction to expand its Memphis-based package distribution facility by about one-third.

Company officials said that this effort will add roughly 140,000 square-feet of building space and bring its total to more than 430,000 square-feet, with an estimated cost of $70 million. And they added that when construction is completed in early 2016, this facility will improve processing rates through increased capacity and expanded use of UPS’s next generation sorting technology.

“The increase in volume in the Memphis area drove this expansion,” said Dan Cardillo, UPS spokesman. “This is largely a product of e-commerce in the form of more business-to-consumer shipments. Memphis attracts major shippers because its infrastructure facilitates the easy movement of goods in and out of the area. We continuously monitor the growing needs of our customers and make projections to meet that demand.  This planning process started well over five years ago.”

The UPS Memphis hub handles package volume between Alabama, Arkansas, Louisiana, Mississippi and Tennessee and has more than 1,300 employees. It is located on 83 acres adjacent to Memphis International Airport and integrates processing for the UPS air gateway and ground hub, in addition to dispatch for local pickup and delivery operations. What’s more, UPS said it is leading 27 acres from the Airport Authority to support an 80 percent pickup in package processing.

UPS added that this initiative will also focus on expanding the facility’s surface yard so that tractor-trailers will have a larger staging ground for packages entering and exiting the facilty.

Looking ahead, UPS also said that some early improvements in Memphis will take hold by November as it increases capacity for peak season, which is expected to see volume gains due to e-commerce and omni-channel distribution patterns.

“UPSers at this facility can sort and load more volume than before,” said Cardillo. “The facility can also process more packages destined for other UPS distribution locations. This enhances throughput in the broader UPS network.”

Ken Harms, UPS president of the Mid-South District, added in a statement that these facility upgrades will help to provide UPS with the latest technology and additional capacity to process both ground and air express volume growing from e-commerce business shippers located in Memphis, coupled with consumer demand that is driving online retail sales.