UPS to Expand Columbus Facility With $176.5 Million Upgrade

John Taggart/Bloomberg News

UPS Inc., the world's biggest package-delivery company, plans to spend $176.5 million to overhaul its Columbus package and sorting operations to keep up with growing demand being spurred by e-commerce.

UPS received approval for state tax incentives on May 23 for the project that will include 75 new jobs with an annual payroll of $3.2 million. UPS has more than 800 workers at the site on the city's West Side.

The tax credits for UPS have an estimated value of $217,000. UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.

"UPS continues to invest in our integrated delivery network," spokesman Dan Cardillo said. "Business growth in the Columbus area is driving demand for UPS' services and this facility expansion exemplifies one aspect of our ongoing approach to meeting that demand."

UPS plans to nearly double the size of the building and install automated sorting equipment designed to move packages more efficiently.

The upgrades, for example, include label applicators that will place what are called "smart labels" on packages meant for local delivery. The labels will help workers load the trucks more efficiently and make sure the right package gets on the right truck.

The project will add parking and bay doors for UPS tractor trailers.

The 75 jobs that the company will be adding are mostly package handlers and some drivers. Hiring for those jobs is expected to begin closer to when the project wraps up in 2020.

The rapid growth of e-commerce is forcing UPS and other shippers to keep their operations updated, said Satish Jindel, president of ShipMatrix, which help customers more effectively manage their shipping. The upgrades also help customers track the delivery of their purchases and let them know where and when their package is at all time and if it has been delivered.

"The competition is doing it and customers are expecting it," he said.

The upgrades are especially critical during the holiday season. UPS and other shippers were criticized in December 2013 for not delivering gifts by Christmas morning.

"As a result, they have pressure to perform at levels that require systems and operations upgrades. ... It's expensive, but that's the nature of the business," Jindel said.

Jindel credited UPS with doing better last holiday in terms of getting packages delivered and managing costs at the same time.