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United Parcel (UPS) Commences Louisville Hub Expansion

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United Parcel Services, Inc. (UPS - Free Report) has initiated expansion of its Louisville Centennial Hub, which has been operational since May 2008. The expansion project, estimated at around $300 million, will increase the size of the hub to 838,000 square feet and result in creation of 300 full and part-time jobs. Additionally, sorting capacity will get almost doubled to 85,000 from 40,000 packages per hour.

Importance of the Hub

The Louisville Hub had been set up in 2007 during United Parcel’s centennial year.  It is an important transfer point for package shipments to locations beyond Kentucky in addition to serving customers in Louisville and nearby counties. Moreover, being close to the company’s Worldport air hub at Louisville International Airport, the hub allows package drop off at the air operations point till 1.30 a.m.

Expansion Plans

The company will carry out expansion work in three phases through 2020.  Along with capacity expansion, operational efficiency will also increase as the hub’s conveyor technology will be upgraded and automated. The transformation will increase package flow through the building and improve sorting accuracy by capturing data and sending packages to the required location for shipments. The company will also introduce six-sided decode tunnels to the facility for quick information capture from address labels. “Smart labels” will be placed on the packages to improve their accuracy and integrity in addition to reducing transit time for United Parcel customers. The overall quality enhancement and improvement in operations is expected to benefit the company substantially.

Zacks Rank and Stocks to Consider

United Parcel currently carries a Zacks Rank #3 (Hold) Better-ranked stocks in the transportation space include Air Transport Services Group Inc. (ATSG - Free Report) , Copa Holdings SA (CPA - Free Report) and ANA Holdings Inc. (ALNPY - Free Report) , all carrying a Zacks Rank #2 (Buy).

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