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UPS employment in the Louisville area has topped 20,000 for the first time, and the shipping giant expects to add more than 5,000 workers with the completion of a USD1 billion expansion of the Worldport air-package hub at Louisville International Airport in November 2010.

UPS’ 20,674 workers at the end of last year outnumbered Jefferson County Public Schools’ employment and represented an increase of nearly 2,300 workers from a year earlier.

The June opening of a 700,000-square-foot heavy-freight air hub, which has about 1,100 workers, made up a significant part of the hiring, said Pat Murphy, work force planning manager.

Employment was relatively steady at UPS’ air division, including pilots, package handlers and administrative positions; its ground division, which includes the brown-truck package delivery service; and Supply Chain Solutions, the company’s logistics operation, Murphy said.

In 1982, when United Parcel Service introduced overnight service to a small air-package sorting center it had opened in Louisville the previous year, the company had 115 workers here.

Murphy said he does not expect more large increases in employment until the first phase of the Worldport expansion is complete in 2009, with final construction work ending the next year. UPS expects the added capacity will create 1,284 full-time jobs and 3,787 part-time positions.

Worldport was the largest capital expansion project in UPS history, doubling the air hub’s size to 4 million square feet and boosting the sorting capacity from 215,000 packages per hour to 304,000.

UPS Store owners all over the country are packing it in, including 10 in the Dallas-Fort Worth area in the last two years. And the numbers could grow, raising alarms about a possible franchise fiasco.

Mike Gorlano, 50, couldn’t get back half of what he paid for his UPS Store in Carrollton. He’s living off his savings while looking for a new career. Andy Weir, 43, faces thousands of dollars of debt after closing his UPS Store in Richardson. The problem stems from an unusual situation: The stores can’t compete with United Parcel Service Inc.’s Web site.

Many current and former franchisees accuse the package delivery giant of using the Internet to take away their customers.

Most of the franchisees that failed are mom-and-pop operations that sank all of their savings into their stores. The owners say UPS is destroying their livelihoods and retirement dreams.

In his nearly two years as a UPS Store franchisee, Mr. Davis never broke even. He invested $180,000 to get the franchise, cashing out his 401(k), selling stock and taking out a loan.

Atlanta-based UPS denies that it’s undercutting its franchisees.

The problem isn’t limited to the Dallas-Fort Worth market, which has 49 stores. UPS Stores in other cities are also losing money, and some are shutting their doors.

To fight back, a group of 220 current and former franchisees from around the country, including a few from the Dallas area, is suing UPS and its franchisor, Mail Boxes Etc., accusing them of breach of contract, fraud, unfair trade practices and other actions.

UPS has been encouraging its franchisees to put more emphasis on nonshipping services, particularly copying and faxing. It’s running television commercials with the tag line “The UPS Store … the place for document services and a whole lot more.”

Focusing on these services produced positive results in tests at some stores, Mr. Hallabrin said.

But even if the strategy works, it may be too late for many franchisees, who say document services account for only a tiny portion of their revenue. They also note that UPS Stores are not known for these services and don’t have the equipment and expertise of rivals like FedEx Kinko’s.