FedEx has announced plans to spend $1 billion to expand capacity of its main US air hub at Memphis by 2025 to cope with rising volumes, just weeks after unveiling a $1.5 billion investment at its Indianapolis hub.
The modernisation and expansion plan for Memphis was jointly announced by FedEx Corp. Chairman and CEO Frederick W. Smith and Tennessee Governor Bill Haslam yesterday.
The project includes construction of a large new sort facility, installation of state-of-the-art sort systems in the new building, construction of a bulk truckload building and a new area to improve handling of the oversized shipments that have increased with the growth in e-commerce.
In addition to improving operations, the investment in new systems will improve the environment for the thousands of FedEx team members who work at the Memphis hub, including improved cooling and break rooms, which will drive team member satisfaction.
Capital investment for the Memphis hub project is estimated to exceed $1 billion over a six-year period. Following finalization of the project plans, construction could begin in 2019 and should be completed by 2025, according to the company.
The FedEx hub in Memphis, which currently has 11,000 team members and 163 aircraft gates, is the largest sort facility in the FedEx Express global network. It processes 47% of total FedEx volume and 69% of U.S. domestic volume each business day. FedEx employs an estimated total of 30,000 people in the Memphis area.
“I want to thank Governor Haslam and the State of Tennessee for their support of this investment in a transformational project for the FedEx Express hub in Memphis,” said FedEx Corp. Chairman and CEO Frederick W. Smith. “Modernization and expansion of the Memphis hub will ensure that we continue to provide outstanding service to our customers around the world and make this an even better place to work for the thousands of team members here who keep our operations running every day and night.”
“FedEx is known for delivering results across the globe, so we are incredibly grateful it calls Tennessee home and is doubling down here with this major investment,” Haslam said. “As the Memphis area’s largest employer, and a major economic driver across the state, this investment reflects FedEx’s continued commitment to Tennessee and will benefit current employees and the future workforce for years to come.”
In late January, FedEx announced $3.2 billion worth of investments, including $1.7 billion on staff wages and pensions and $1.5 billion on a major Indianapolis hub expansion over the next seven years, following the US government’s recent tax cuts. The Indianapolis hub will remain smaller than Memphis in future despite the higher spending figure.
The company will announce financial results for the third quarter of 2017/18 next Tuesday (March 20).
