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United Parcel to Invest Over $175M for Hub Expansion in Ohio

UPS FDX RLGT AVH

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United Parcel Service Inc. (UPS - Free Report) recently announced its decision to put in over $175 million for the expansion of its main Columbus, OH ground package hub. The expansion project is expected to be over by fall 2018.  The initiative is part of the company’s multi-year plan of modernizing its operations and capacity globally.

This expansion is expected to boost the company’s volumes as the Columbus hub is an integral transit point for packages delivered across the U.S.

Benefits of Expansion

The expanded facility will be able to process over 63,000 packages per hour as its sorting capacity will double. Moreover, the use of advanced technology and automation of operations will allow the company to keep pace with the rapid growth in customer needs. Upon expansion, the Columbus facility complex will stretch over 90 acres and will include the current liquefied natural gas facility that provides fuel to United Parcels’ alternative fueled tractors.

The expanded facility will also lead to the creation of at least 75 new jobs. The hub will be equipped with United Parcel’s new sorting, processing, and data capture technology.  Traditional scanning will be replaced with six-sided decode tunnels to quickly capture package information from address labels. Package labels will be placed using high-speed UPS Smart Label, which will disseminate instructions to personnel for routing and loading on delivery vehicles. 

In spite of strong competition from peers like FedEx Corp. (FDX - Free Report) , Radiant Logistic, Inc. (RLGT - Free Report) and Avianca Holdings S.A. (AVH - Free Report) , the company carries a Zacks Rank #3 (Hold), indicating its potential for growth on the back of a strong market position, global network and brand name. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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