UPS Announces $1B Expansion to Meet Expected Growth

UPS Inc. (UPS) announced a $1 billion expansion at its main air hub Wednesday that will add more than 5,000 jobs as the world's largest shipping carrier anticipates strong growth in global commerce.

The project will add 1.1 million square feet to the company's vast sorting complex known as UPS Worldport. The computerized sorting system installed four years ago will feature 197 miles of conveyors once the expansion is finished by 2010.

"We anticipate strong growth in global trade to continue for years to come," UPS Chairman and CEO Mike Eskew said in a statement. "Expanding the centerpiece of our worldwide infrastructure is absolutely necessary to support the long-term needs of our customers."

State officials were expected to consider an incentive package Wednesday for the Atlanta-based shipping company.

UPS said the expansion would cost at least $1 billion, with work starting later this year.

As a result, the air hub's sorting capacity will grow by 60 percent in the next five years to more than 487,000 packages per hour.

About 260 flights come in and out of the air hub each day that connect it with more than 200 countries and territories worldwide.

Abramson said the air hub, next to Louisville's main airport, is a key asset in trying to encourage business growth in the city. "It gives us an international calling card for economic growth," he said.

"This is a good day for Kentucky, a great day for Louisville," Gov. Ernie Fletcher said during the announcement.

Fletcher said the direct economic impact for Kentucky will be $344.8 million from the jobs and there would be an indirect economic impact of $400 million from other companies moving to the area.

The air hub currently employees about 7,500 workers. The additional workers will fill about 1,200 full-time and 3,700 part-time jobs.

The expansion will include three additional aircraft loading wings along with the installation of high-speed conveyor and computer systems.

The project comes after UPS recently added 1,500 part-time jobs and announced an $82.5 million expansion of its air hub, which will add a new 700,000-square-foot building to handle heavy freight equipment.

Shares of UPS fell 77 cents, or 1 percent, to $79.99 in late morning trading on the New York Stock Exchange.