Saturday, September 28, 2002

UPS finishes $1.1B expansion

Processing at Louisville hub to be 40% faster

By Bruce Schreiner
The Associated Press

        LOUISVILLE - United Parcel Service Inc. on Friday showed off a newly completed $1.1 billion expansion that will speed parcel processing by 40 percent at the company's main air hub.

        The seven-year project, the most expensive in UPS history, more than doubles the Louisville hub's sorting complex to 4 million square feet - the equivalent of more than 80 football fields. The expanded facility features cameras and scanning equipment to navigate packages through a labyrinth of high-speed conveyors for sorting and eventual shipment to places around the globe.

        “This system virtually eliminates missorts, almost eliminates damages and increases safety,” UPS chairman and chief executive Michael Eskew said.

        Once packages are off-loaded, most aren't touched by employees again until being reloaded onto other planes. Before automation, packages went through the hands of four or five employees during sorting.

        The automated system will free workers from much of the lifting and repetitive motion that can carry risk of injury, officials said.

        The expanded hub, named UPS Worldport, will be capable of sorting 304,000 packages per hour, or more than 84 packages every second. Before expansion, UPS could sort 215,000 packages hourly at the hub, which has about 8,500 employees, most of whom are sorters and loaders.

        Mr. Eskew told employees at a ceremony that the expansion “puts us in a class by ourselves” within the industry, and positions UPS for long-term growth.

        “This hub isn't really about the next quarter, but the next quarter of a century,” he said.

        Greg Burns, an analyst with J.P. Morgan, said UPS has been gaining market share in the air segment of the freight-hauling business.

        “This is part of an ongoing capacity expansion which probably tells you they expect to take additional market share,” Mr. Burns said.


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