UPS is growing its air express network, citing demand for faster deliveries from ecommerce and small business customers, as well as the healthcare industry.
It announced Thursday it will boost infrastructure to support its growing air fleet, including a new support structure at its base in Kentucky, and it has plans to invest $750 million in projects over 15 years.
The move comes as Amazon becomes a rival to traditional shipping carriers and grows its own fleet of airplanes.
Press release follows:
Next Day Air volume is growing rapidly in the industry and UPS is winning a larger share of this expanding market. Further, healthcare, ecommerce and small business customers are demanding faster delivery times around the globe. In response, UPS Airlines is growing its air network, including its support structure at its home base in Louisville, Ky.
Over the next 15 years, UPS anticipates a series of construction projects around Worldport that could reach $750 million and create 1,000 jobs. “These projects are part of UPS’s overall strategy to make investments in its global logistics network to enable continued growth in strategic markets,” said UPS Airlines President Brendan Canavan. “That includes an infrastructure that allows us to continue providing our customers with safe, reliable and on-time service.”
Most notably, UPS will build a new $220 million, 262,000 square-foot-hangar to accommodate line maintenance on its growing air fleet. The company is in the process of adding nearly 50 new, converted and leased 747-8s and 767s by 2022.
The new hangar will be large enough to simultaneously accommodate two 747-8F aircraft, the largest in the UPS Airlines fleet. Due to the configuration of property at SDF, the new hangar will be built on leased land at the northwest corner of the airport, on the opposite end of the property from the Worldport campus. Permitting and construction will begin in 2020, with the project scheduled for completion in 2022.
Other notable infrastructure projects include ramp and taxiway improvements, renovated office
“We are grateful for public sector support with these incentives,” said Canavan. “They are a win-win, allowing UPS to expand in Kentucky, while increasing tax revenues and creating jobs in the city and throughout the state.”
New jobs will reflect growth throughout the airline. Pilots, aircraft mechanics, and support staff will be among the 1,000 high-paying professional jobs the projects will create. This job expansion will allow UPS to pursue up to $40 million in tax incentives from the Kentucky Economic Development Finance Authority.
“UPS is a great corporate citizen and a significant economic driver for the commonwealth. We are thrilled to see the company’s continued growth here,” said Kentucky Governor Matt Bevin. “Businesses and consumers now operate at a faster pace than ever, and that is reflected in their shipping and distribution needs. It is the mark of a great company that UPS has quickly responded to customer demand by expanding its air cargo fleet here in Louisville. We are grateful for the continued commitment of UPS to the highly skilled workers of Kentucky, and we look forward to further expanding this strong partnership as we move into the future.”
“What started as a strategic investment by UPS 30 years ago has grown into a worldwide asset for the company and the city of Louisville,” said Mayor Greg Fischer. “UPS’ continued investments in our city have created opportunity throughout our economy and across specialized logistics sectors like high-tech, biomedical and rapid prototyping. We are proud to have this outstanding corporate citizen in our city and we look forward to creating more opportunities for success and growth in the future. ”
The incentive program runs for 15 years and allows UPS the flexibility to pursue growth projects based on operational needs.
SOURCE: UPS Press Release