FedEx investing $1 billion to modernize Tennessee hub

Tennessee Gov. Bill Haslam, left, talks to reporters about a newly announced $1 billion investment by FedEx Corp. at its hub in Memphis, Tenn., on Wednesday, March 14, 2018. FedEx Express President and CEO David Cunningham, right, joined Haslam on the tarmac of Signature Flight Support at Memphis International Airport. (AP Photo/Adrian Sainz)

MEMPHIS, Tenn. — FedEx said Wednesday that it is investing more than $1 billion to modernize and expand its Tennessee hub, in a move the shipping giant says will improve its efficiency and reliability as it delivers packages throughout the world.

FedEx Corp. Chairman and CEO Fred W. Smith and Tennessee Gov. Bill Haslam made the announcement while standing in front of a FedEx Express jet on the tarmac of a private terminal at Memphis International Airport.

The project will include construction of a new large sorting facility, installation of new sorting systems and construction of a bulk truck loading building. Also, a new area will be built to improve handling of oversize shipments that have increased with the growth of internet commerce, the company said.

Construction is expected to begin in 2019 and be completed by 2025.

The Memphis expansion is the second sizable investment that the company has announced this year at a U.S. hub. FedEx will invest $1.5 billion to significantly expand its FedEx Express hub in Indianapolis, the company said in January.

Headquartered in Memphis, FedEx employs 30,000 people in the city — including 11,000 at the hub alone — and it is considered one of the main drivers of the city's economy. The Memphis hub is the largest sorting facility in the FedEx Express network, processing 47 percent of total FedEx volume each business day.

Smith made brief remarks but left the details to David Cunningham, president and CEO of FedEx Express. Cunningham said the Memphis investment will be a "transformational project" for the city, the state and the company.

"Our growth in our business is driving this investment," Cunningham told reporters. "What we see happening with e-commerce and large oversized shipments is a key part of this investment."

Cunningham said the modernization will allow the hub to improve the process of unloading trucks and sorting packages.

"We're going to run more reliably," he said.

Jobs related to technology and automation will be added, but Cunningham did not discuss how many.

Haslam said the state is not directly contributing money or other financial incentives for the expansion project. Haslam, who is in his eighth year as Tennessee's governor but is not seeking re-election because of term limits, said FedEx's presence in Memphis shows that the state can contribute to the global economy.

"If you want to have a contest among states and say, 'Who has the best brand that can show people around the world we can compete?', I'll take FedEx and you can have the rest," Haslam said.

Shares of FedEx Corp. fell 1.5 percent, to $246.91, in Wednesday trading.

Must Read

Pfizer spends $14B on Medivation in cancer fight

Aug 22, 2016

Pfizer will pay about $14 billion to buy cancer drug developer Medivation as it fortifies its hold...

UN: Thousands of Central American children seek to enter US

Aug 23, 2016

UN children's agency says thousands of children trying to escape gang violence and poverty in...

Mylan boosts EpiPen patient programs, doesn't budge on price

Aug 25, 2016

Mylan, now in the crosshairs over severe price hikes for its EpiPen, says that it going to expand...

Garland tells law students that careers can be unpredictable

Aug 26, 2016

Supreme Court nominee Merrick Garland told entering Harvard Law School students on Friday that they...

European ships rescue thousands of migrants off Libyan coast

Aug 29, 2016

Italian naval ships along with vessels from non-government groups rescue thousands of migrants off...

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH