UPS will add more air and ground capacity, including a $400 million new Atlanta hub, ready for peak season this year, and is not yet seeing any impact from rising international trade tensions, according to top executives.
CEO David Abney told analysts on the Q2 results call yesterday that the company will soon open its second largest US domestic ground hub in Atlanta. Some 2,500 – 3,000 workers are expected to be taken on at the $400 million, 1.2 million square foot regional package sorting hub, according to US media reports.
“At full capacity this year, it will sort over 100,000 pieces per hour, more than double the hub sorting capacity we added all of last year. The new hub will begin operations over the next couple of weeks and it incorporates the latest automated sortation and network control technologies. It is a showplace of UPS's network capabilities being deployed in several new regional hubs,” he said.
Juan Perez, Chief Information and Engineering Officer, noted that UPS will increase sorting capacity by more than 350,000 packages per hour ready for peak 2018, will take on more seasonal helpers and introduce more new technologies to improve the sorting and delivery processes.
Asked about international trade tensions, CEO Abney told analysts: “I can tell you that we've seen no significant impact at this time.” However, he said UPS has “limited exposure” to any downturn given its global network and diverse business.
Abney emphasised that UPS is a long-standing supporter of free trade principles. “We're advocating for future trade discussions to produce balanced and fair agreements for all parties so that cross-border commerce is easier for businesses of our sizes. While we expect continued growth in global trade, we're closely monitoring the changing trade landscape. No matter the outcome, we are well prepared in the event (that) rising tensions impact our cross-border business.”
COO Jim Barber (former head of International) said UPS will continue to add more air capacity this year to carry rising international volumes, notably between the US and Europe as well as in emerging markets such as Southeast Asia. The six current Boing 747-8s in operation on intercontinental routes will be increased to nine by the end of this year, while three B767s will be transferred to US domestic routes, he said.
“We're going to do this for the next years to come, continuing to take six B747-8s every year and a number of 767s to keep the capacity aligned with the demand,” he commented.
