LOUISVILLE — Shipping giant UPS Inc. has started operating the first phase of a long-awaited $1 billion expansion at its main global air hub, boosting its package-handling capability.
Automated package-sorting operations got under way last week in a new extension of the sprawling building at the Worldport air hub, The Courier-Journal of Louisville reported.
Meanwhile, UPS airplanes pulled up to a new wing to be reloaded with cargo for their next trip.
The new operations come at a time when customers are shipping fewer packages due to the recession.
"While the economy may be slow right now, we are planning for many years down the road," UPS spokesman Mike Mangeot told the Louisville newspaper. "We are building in capacity ... for when the economy rebounds."
Even though UPS is moving fewer packages, adding capacity at Worldport saves money, said Mark Scherrens, Worldport expansion program manager. That's because the facility can move a large number of packages more quickly than the company's smaller hubs.
In February the company eliminated night package sorting at hubs in Dallas and Columbia, S.C., and moved some volume to Worldport. More such shifts could occur to take advantage of the Worldport expansion, he said.
The newly opened facilities are the first phase of a project, announced four years ago, that is adding 1.2 million square feet to Worldport. That will bring its total footprint to 5.2 million square feet.
Worldport's package-handling capability will grow by 15 percent, to 350,000 packages an hour compared with 304,000 before, as a result of the portion where operations started this past Tuesday.
The facility now will be able to handle up to 1.1 million packages in its busy late-night sorting shift, Scherrens said.
The project's second phase, which involves opening another wing next June, will increase capacity to 416,000 packages an hour.
The key to Worldport's success is automation. After packages are removed from incoming planes, high-speed conveyor belts zip them through the facility as overhead cameras read "smart labels" and divert each parcel to a spot near their outgoing plane. Some packages are processed in as few as eight minutes.
This is the second major expansion of Worldport. In 2002, UPS completed an expansion that more than doubled the hub's size. Like the current project, it cost about $1 billion.
When UPS announced the expansion in 2006, the company said it would create about 5,000 jobs, most of them part-time. But those hiring plans are on hold.
"We would love to add employees when the package volume returns, but right now we're just holding the line," Mangeot said.
Worldport has 8,941 employees, of which 7,535 work part-time.
UPS has a total of 20,513 employees at its various Louisville facilities. Most of those who aren't at Worldport are full-time employees, Mangeot said.