FedEx Plans to Nearly Double Ground Volume Capacity

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FedEx Corp. announced yesterday a $1.8 billion, six-year expansion for its FedEx Ground that will nearly double the ground service's daily package volume capacity from 2.5 million to 4.8 million by the end of fiscal year 2009.


In a statement, the Memphis, TN, company said the plan includes 10 new and 23 expanded central distribution hubs as well as the expansion or relocation of more than 300 existing facilities.


The company plans new hubs in Memphis, Dallas, Cincinnati and Hagerstown, MD, by 2006, with six more in place by the end of the 2009 fiscal year. FedEx said these facilities will feature the most advanced material handling and scanning technology.


FedEx Ground has grown from handling almost 1.4 million packages daily three years ago to nearly 2.1 million packages daily in the fiscal quarter ended Aug. 31, 2002. It is second in North American ground volume to United Parcel Service Inc., which handles 10 million packages a day. Revenue for FedEx Ground was $2.7 billion for the fiscal year ended May 31, up 21percent from the previous year.


The company said its worldwide air and ground network at FedEx Express, built over the past 10 years, is "essentially complete." FedEx said it will reduce capital investments for additional aircraft for the rest of the decade while continuing to spend on its operating infrastructure and information systems.


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