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FedEx growth will pack economic punch
By Ray Weikal
The Northland could see an infusion of millions of dollars over the next few years thanks to expansion plans by a major delivery company.
FedEx Ground plans to roughly double the capacity and work force of its Kansas City North facility, converting it into a hub, according to company spokeswoman Allison Sobczak. Work on the expansion started in September.
“When we build that facility in 2006, we built it with expansion in mind,” Sobczak said.
The company’s growth will have a positive impact on the region’s economy, according to Wick Hollingsworth, senior manager of the Kansas City hub.
“Upgrading our automated facility to a hub is an extremely positive change for FedEx Ground and our community,” Hollingsworth said. “Our package volume will increase, and we will essentially double our work force.”
The automated FedEx Ground facility at 12501 N.E. 40th St. is 236,000 square feet and features advanced package-sorting systems that complement an existing hub in Shawnee, Kan., Sobczak explained.
Currently, 230 employees process approximately 55,000 packages every day at the Northland site. Shifting to a hub status will mean 240 more employees and a daily volume of about 130,000 packages, Sobczak said. The physical size of the facility will remain the same.
“What we’re really doing is decreasing transit times for our customers,” she said.
A recent study conducted by FedEx Ground indicated that the Northland hub will have a $2.6 million economic impact over 20 years on the area, Sobczak said.
The Northland expansion is part of a nationwide plan the company launched in 2002, according to a press release. FedEx Ground plans to spend billions of dollars through 2014 to add six new hubs, expand 31 existing hubs and relocate hundreds of pickup terminals.
“What’s driving this is the need to increase capacity,” Sobczak said. “We have been experiencing growth over the last few quarters.”
FedEx Corp.’s first quarter earnings report released Sept. 18 was a mix of good and bad news. Overall, revenue was up 8 percent, while operating income fell 23 percent and net income dropped 22 percent compared to the first three months of the previous fiscal year.
In their report, company officials blamed the negative numbers on “global economic weakness, higher fuel prices and the related negative effects of higher fuel surcharges.”
Unlike its larger parent corporation, FedEx Ground had very positive results in the first period of the fiscal year. The segment reported a 9 percent jump in revenue and 3 percent operating income increase compared to the same period last year. Ground package volume grew 4 percent.
Even with the stagnant economy, FedEx Ground continues to grow, Sobczak said.
“Our expansion plan is evolving,” Sobczak said.
Staff writer Ray Weikal can be reached at 389-6637 or rayweikal@npgco.com.
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FedEx Ground plans to roughly double the capacity and work force of its Kansas City North facility, converting it into a hub, according to company spokeswoman Allison Sobczak. Work on the expansion started in September.
“When we build that facility in 2006, we built it with expansion in mind,” Sobczak said.
The company’s growth will have a positive impact on the region’s economy, according to Wick Hollingsworth, senior manager of the Kansas City hub.
“Upgrading our automated facility to a hub is an extremely positive change for FedEx Ground and our community,” Hollingsworth said. “Our package volume will increase, and we will essentially double our work force.”
The automated FedEx Ground facility at 12501 N.E. 40th St. is 236,000 square feet and features advanced package-sorting systems that complement an existing hub in Shawnee, Kan., Sobczak explained.
Currently, 230 employees process approximately 55,000 packages every day at the Northland site. Shifting to a hub status will mean 240 more employees and a daily volume of about 130,000 packages, Sobczak said. The physical size of the facility will remain the same.
“What we’re really doing is decreasing transit times for our customers,” she said.
A recent study conducted by FedEx Ground indicated that the Northland hub will have a $2.6 million economic impact over 20 years on the area, Sobczak said.
The Northland expansion is part of a nationwide plan the company launched in 2002, according to a press release. FedEx Ground plans to spend billions of dollars through 2014 to add six new hubs, expand 31 existing hubs and relocate hundreds of pickup terminals.
“What’s driving this is the need to increase capacity,” Sobczak said. “We have been experiencing growth over the last few quarters.”
FedEx Corp.’s first quarter earnings report released Sept. 18 was a mix of good and bad news. Overall, revenue was up 8 percent, while operating income fell 23 percent and net income dropped 22 percent compared to the first three months of the previous fiscal year.
In their report, company officials blamed the negative numbers on “global economic weakness, higher fuel prices and the related negative effects of higher fuel surcharges.”
Unlike its larger parent corporation, FedEx Ground had very positive results in the first period of the fiscal year. The segment reported a 9 percent jump in revenue and 3 percent operating income increase compared to the same period last year. Ground package volume grew 4 percent.
Even with the stagnant economy, FedEx Ground continues to grow, Sobczak said.
“Our expansion plan is evolving,” Sobczak said.
Staff writer Ray Weikal can be reached at 389-6637 or rayweikal@npgco.com.