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Old Posted Jan 22, 2010, 4:49 PM
Johnny Ryall Johnny Ryall is online now
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Hub Expansion on horizon for FedEx

ERIC SMITH | The Daily News

At the FedEx World Hub, 15,000 employees greet thousands of flights and sort millions of packages each month, making it the heart and soul of the Memphis economy. Those impressive numbers could soon grow now that FedEx Express has taken its first step toward a major hub expansion. FedEx has filed a $28 million building permit with the city-county Office of Construction Code Enforcement to bring a new two-story sort facility to its existing hub at 2903 Sprankle Drive, on the north side of Memphis International Airport and south of Democrat Road. The addition would expand current capacity at FedEx’s hub, the oldest and largest in its massive global network, which sees five sorts and 1.5 million packages per day while connecting Memphis with every one of FedEx’s markets. But how much the addition would expand FedEx’s package sorting ability remains to be seen. Jim McCluskey, spokesman for FedEx, said he couldn’t provide any specific details about the expansion plan because no contracts had been executed, but should the company decide to move forward with the project, the new facility would be built adjacent to the existing hub structure. “We are planning a new building addition to our existing sort facility,” McCluskey said. “But because the project is many months down the road, and no contracts have been executed, it’s premature to provide details until we have contracts in place.”

Bluff City value
Even the news of a potential expansion is welcome in Memphis, which saw FedEx recently pump more than $200 million into upgrading and enlarging its Indianapolis hub while beefing up other facilities around the nation as well. Dexter Muller, the Greater Memphis Chamber’s senior vice president for community development and logistics council director, said this expansion is further proof the company sees strategic value in growing its Memphis infrastructure. “When FedEx was investing in other hubs, like Indianapolis and Greensboro (N.C.), and Forth Worth (Texas), some people questioned, ‘Well, does this mean they don’t have as strong a commitment to Memphis?’ Clearly, that’s not the case. This is evidence of that,” Muller said. “Their three-continent hub strategy is evidence of that. Memphis is still their global distribution headquarters, and obviously it’s a real important piece for us to see them continue to invest in that.” FedEx’s “three-continent hub strategy” revolves around Memphis International Airport for North America, Charles De Gaulle International Airport in Paris for Europe and Guangzhou Baiyun International Airport in China for Asia. Each one of those airports and their cities are considered as the premier aerotropolis for their respective continent. And in the Memphis region, the airport is especially vital to overall commercial prosperity. “From the logistics standpoint, we talk about our airport as being the largest single economic generator in the state – it has more impact than some of the much larger airports from a passenger side,” Muller said.

‘Encouraging note’
Muller specifically was alluding to airports such as Hartsfield-Jackson Atlanta International Airport, which dwarfs Memphis when it comes to passenger traffic but lags in terms of cargo and overall economic impact. Memphis International Airport generates $28.6 billion and provides, directly or indirectly, 34.3 percent – or one in three – local jobs. And the most recent traffic numbers show FedEx is by far the biggest single contributor to Memphis International’s stellar performance. The airport handled 669.8 million pounds of cargo last month, up 4.9 percent from 638.7 million in November 2008. Almost all of that tonnage was handled by FedEx, whose contributions have helped Memphis earn the honor of world’s busiest cargo airport for 17 straight years, according to Airports Council International. In fact, Memphis has ranked No. 1 in the world since the organization began ranking cargo statistics.

Though McCluskey said the purpose of filing the permit was the first step in what could be a long process, the fact the company has the wheels in motion is a positive sign for the company. “Any kind of property development plan takes a lot of time; it’s a very lengthy process,” McCluskey said, adding that the few details included on the permit are subject to change. “That’s why we can’t provide information or details until we have the contracts in place.” McCluskey said more details would become available “down the road” as the company gets contracts in place. Still, the writing is on the wall that more space to employ more workers, welcome more flights and sort more packages will be needed when the economy improves. “That’s an encouraging note to see them investing at this time,” Muller said.
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