Logistics giant UPS says e-commerce growth and a need for more modern technology are driving its investments in Louisville.
The company said last week that it would invest nearly $310 million in its package sorting facility in Louisville by 2018 and create 300 jobs. The building footprint will more than triple, to 838,000 square feet.
Growth by online retailers is increasing package volume arriving in Louisville, UPS spokesman Jeff Wafford told Insider Louisville via email.
For example, online retailer Amazon said recently that it expects this holiday season to be its busiest ever, projecting growth of up to 25 percent from last year.
The UPS investments also reflect a need for modernization, Wafford said. Three other UPS hubs are being outfitted with new technology and equipment, and 30 of the company’s hubs will be updated by 2020.
The upgrades planned for the Louisville Centennial Hub include more automated conveyor systems that are “equipped with technology to essentially sort themselves through a facility,” Wafford said.
“A UPS employee puts the package onto a conveyor belt, the package rides on the belt through a decode tunnel where it is weighed, measured and scanned,” he said. “Based on the information embedded in the label, the automated conveyor belt system can then route the package through the facility to a UPS employee who is waiting to load the package into an outbound vehicle.”
The expanded facility also will make greater use of smart labels, which are barcodes that contain more data than traditional labels and allow for more efficient routing.
The 300 new employees can expect to earn about the same as the Louisville hub’s current 1,600 employees, whose hourly wages start at $10.10 and exceed $20 at the high end.
The company will begin hiring in 2017. While UPS has hired truck drivers, package handlers and managers at other similar facilities, Wafford said it’s too early in the process to give a breakdown on the new hires in Louisville.
The investments will give UPS more flexibility and sorting capacity and will give companies in the area even greater logistics advantages, according to Wafford.
“Over the past 20 years, more than 160 different companies have moved operations to the Louisville area citing proximity to UPS’ Worldport hub as a primary reason for locating here,” Wafford said.
Kent Oyler, president and CEO of Greater Louisville Inc., said the UPS presence also has helped existing companies grow.
And the new UPS expansion will foster additional economic growth in the region, he said.
“It’s just a strong vote of confidence … in the (local) job market and their business,” Oyler said.
Existing logistics companies will have access to a larger UPS facility with lots of capacity, he said. The expansion also might lure more companies to the Louisville area.
As automation and innovation in the distribution and logistics sectors increase, that may mean fewer jobs per facility, Oyler said, but it also will raise the required technical skills and wage rates.