March 27, 2018 1:45 PM, EDT

FedEx Cancels Indiana Shipping Hub Project, Citing Increased Automation at Other Facilities

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Two months after crediting Republican tax cuts with fueling new investment in Indianapolis, FedEx has canceled a plan to build a large new project in Greenwood, Ind.

“FedEx Ground is constantly evaluating the capacity needs of its network,” a statement attributed to FedEx said. “Automation and technological enhancements we have made to our network over the last decade have enabled us to continue to increase the utilization of our existing capacity while serving the growing needs of our customers.”

FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.

FedEx revealed in an unusual late night statement March 24 that it will not be proceeding with a distribution center that the company previously said would employ 455 people. FedEx cited “projected operational needs,” but did not elaborate on its reasons for scrapping the project.

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The Memphis, Tenn.-based company was planning to build a $259 million, 608,000-square-foot distribution center on 237 acres. Company officials in October described the project as a hub spinoff of FedEx’s Northern Kentucky Hub.

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A new FedEx hub would have been in line with recent investments from other companies, including UPS Inc. and Inc., to beef up their facilities and operations in Central Indiana. The Indianapolis area has experienced rapid growth in warehousing, because of its proximity to other major cities and the growth of e-commerce.

UPS ranks No. 1 on the TT Top 100 list of for-hire carriers.

FedEx already has a 2 million-square-foot hub at Indianapolis International Airport. The company in January said the Republican-backed tax cuts, which passed in December, would fuel $1.5 billion in new investment at FedEx’s Indianapolis facility over seven years.

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A FedEx spokesman did not immediately respond to a request for comment on the company’s decision to abandon the Greenwood project.

A Greenwood spokesman declined to comment beyond a prepared statement that said the city is “disappointed in the decision” but appreciates “FedEx’s transparency and collaboration throughout the evaluation process.”

“The silver lining is that the initial decision by FedEx to explore such a large investment in Greenwood has led to interest from a number of other high-profile companies,” Greenwood said in a statement.

FedEx had applied for property tax abatements worth $17.2 million over a 10-year period from Greenwood.

“Incentives offered by the City of Greenwood were generous and very much a positive for our initial consideration of that location,” FedEx said in its statement.

FedEx’s initial announcement said a Greenwood hub would include 80 full-time jobs paying $24.55 an hour and 375 part-time jobs paying an average of $14.24 an hour.

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