FedEx Ground to build Triangle sort facility
FedEx Corp. plans to build a regional sorting facility near Raleigh-Durham International Airport to replace a smaller facility in Durham – a move that may result in new jobs.
FedEx Ground, the small-package delivery division of FedEx, has selected a piece of land near Kitty Hawk Drive and Globe Road in Morrisville to build a 128,851-square-foot facility.
The building will be 52 percent larger than FedEx Ground’s sorting facility in the Research Tri-Center industrial park in Durham, where 180 people work.
Company spokesman David Westrick anticipates jobs will be added, although he doesn’t know how many. “We add people as we need them. Yes, we expect to hire there, but when and how many is tough to say,” says Westrick, who works out of the division headquarters in Pittsburgh.
A contractor will be hired in late August, with building completion expected in August 2007. The building will be designed so that it can be easily expanded to as big as 175,000 square feet.
The new sorting facility is part of a six year, USD1.6 billion expansion program nationwide. FedEx Ground plans to build nine new hubs, expand 30 existing hubs and relocate 290 pickup and delivery terminals. The expansion will allow FedEx to expand its package capacity from 3 million to more than 5 million a day by the end of 2010.
FedEx Ground now handles 2.6 million packages a day and has a network of more than 500 distribution hubs and local pickup and delivery terminals throughout the United States.
Memphis-based FedEx Corp. is building a USD300 million air-cargo sorting hub at Piedmont Triad International Airport in Greensboro. The hub will employ 1,500 in full-time and part-time workers when it is fully operational. It is scheduled to begin operations in 2009. North Carolina has pledged a USD115 million incentives package over 25 years for the Greensboro hub.
FedEx Corp. generated USD32.3 billion in revenue in fiscal year 2006, which ended May 31. The FedEx Ground segment generated USD5.3 billion of that revenue.
Analyst Donald Broughton of A.G. Edwards says FedEx’s expansion is necessary to keep the company on pace with competitors. He writes in a recent research report that the company’s growth plan is “in the early stages of being unlocked, leaving us convinced that overall annual operating margins will exceed 10 percent in the foreseeable future.”
He points out that FedEx Ground revenue was up almost 11 percent in the fourth quarter of the fiscal year. “… (S)olid volume results in the ground segment are again in line with our thesis that FedEx continues to strip (and hold onto) market share away from rival UPS who only grew volume 3.3 percent in the most comparable period.”
Broughton does not own stock in FedEx, but A.G. Edwards has received compensation during the past 12 months from FedEx for products and services other than investment banking.
