Market Review | Global customer connectivity

Hundreds of millions invested in UPS infrastructure further propels region’s capabilities

By Abby Laub

The $310 million expansion of the UPS Centennial Ground hub in Louisville doubled the company’s sort capacity to 85,000 packages per hour. The additional space will accommodate increased e-commerce and traditional retail package business.

Imagine processing 85,000 packages per hour nearly round the clock, heading to their destinations around the world. Thanks to the spring 2019 completion of the multiyear, $310 million expansion at the UPS Centennial Ground hub in Louisville, the region’s role as a national leader in global distribution and logistics is further solidified.

The expansion is one of many examples over the last five years alone of how Greater Louisville and Southern Indiana are more connected and capable than anywhere else in the nation to handle the demands of both logistics and transportation for business and pleasure.

The addition of 800,000 s.f. of space at the UPS Centennial hub will accommodate increased e-commerce and traditional retail package business. The project also doubles the company’s sorting capacity to 85,000 packages per hour thanks to additional automation equipment. The hub’s proximity to UPS Worldport at the Louisville Muhammad Ali International Airport allows UPS to provide end-of-runway express service to its customers in Louisville and surrounding areas.

“The significantly expanded Centennial hub will provide even more advantages to companies who have distribution centers and operations in Kentucky and surrounding areas, while also benefitting local customers,” said Joe Boyle, president of UPS’s Ohio Valley District at the April announcement. “UPS is grateful for the strong relationship we have built with the city of Louisville and the state of Kentucky. We are proud to be a partner in the economic growth of the region … This expansion is part of growing UPS’s smart logistics network to enable companies of all sizes to deliver products when, where and how their customers want them.”

UPS employs almost 29,000 people across Kentucky in package delivery operations, aircraft operations, ground freight, health-care logistics and contract logistics. Louisville is the home of UPS Worldport, the largest automated package handling facility in the world, and the center point of the UPS worldwide air network.

A key to regional growth

UPS is a big part of the region’s larger economic development picture and a key component of airport growth. The most recent economic impact report from 2014 states the two Louisville airports – Muhammad Ali International and Bowman Field – generated recurring impacts of almost 70,000 jobs, $2.6 billion in payroll, $8.1 billion in economic activity and almost $350 million in state and local taxes.

In a spring 2019 interview with The Lane Report, Louisville Regional Airport Authority Executive Director Dan Mann said activity is up since then.

“In 2014, the airport industry was still slow to recover from the Great Recession … We think we’re going to have some pretty good gains from the 2014 numbers,” Mann said. “Regarding the economic impact, when you look at our model of being self-sufficient and not taking money out of the tax system, to have the employment here creating $348 million in tax revenues is pretty significant and is going to the benefit of the state.”

A healthy airport and a healthy economy are inextricably linked.

“There is a relationship and strong link to the health of an airport and that of a community,” Mann said. “Regional factors to both of their successes include population growth, disposable income and a strong economy. An airport grows with the city and region. If one lags the other, neither will reach their full success.”


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He added that Louisville Muhammad Ali International Airport has been “aggressive and engaged to respond to the community and work in tandem with key stakeholders with the addition of new service with competitive fares.”

One of those met needs was the addition of nonstop service to Los Angeles International Airport (LAX) launched in early April 2019. In the past two years, nonstop service from Louisville has grown by nearly 50% to more than 30 destinations, including Houston and New Orleans. The airport now has 33 nonstop destinations, up from 21 in 2016.

In 2018 Louisville had nearly 1.94 million departing passengers, up about 11% over 2017. The last four months of 2018 were the best period in airport history, measured by the number of planes and passengers, and 2019 is expected to be even busier.

And, the airport in 2018 saw a total of 44,243 cargo landings, with UPS accounting for nearly 91% of all cargo operations in 2018 with 40,601 landings.

Honoring local heritage 

The bourbon-powered local tourism scene is advantageously situated very close to the airport – with proximity to downtown Louisville and regional attractions alike. With low-cost carriers like Frontier and Allegiant included in the airport’s carriers, travel is easily attainable – to and from Louisville.

“We’ve also taken strong steps to proudly represent the region as the ‘welcome’ out-of-town visitors experience immediately when they arrive,” Mann said. “The community is showcased throughout the terminal with vibrate imagery and a strong sense of place with representation of local brands and the bourbon industry.

“Plus, with the inclusion of Muhammad Ali in the airport’s name, we’re even further connected to one reason why visitors from around the world come to Louisville each year. Ultimately, we want folks to know what our community is about when they arrive, and depart with a positive, friendly impression of it when they leave.”

Infrastructure is also key to making the logistics and transportation scene work in Greater Louisville.

Key transportation improvements came in 2016 upon the completion of the Ohio River Bridges Project. Two stunning new bridges were completed, including the Abraham Lincoln Bridge downtown and the Lewis & Clark Bridge in the city’s East End, along with the rehab of the John F. Kennedy Memorial Bridge.

These bridges, combined with a complete redesign of the “spaghetti junction” interchanges of interstates 64, 65 and 71 near Louisville’s riverfront, cost $2.5 billion. This highway system puts the Louisville region in a transportation and logistics epicenter.

Consequentially, major growth ensued at industrial parks like River Ridge Commerce Center in Jeffersonville, Ind., which rely on solid access for their clients and goods. Located just off I-265 north of the Lewis & Clark Bridge on the east end, River Ridge and its swath of distribution centers continues to serve as an economic driver of local employment and investments.

The center’s 2018 Economic Impact Analysis, conducted by Policy Analytics, found that River Ridge helped create or sustain more than 16,000 regional jobs, which equates to an estimated $2.3 billion in annual economic output. River Ridge businesses generated $39.4 million in tax revenue for state and local governments, an increase of $6.8 million over 2017.

Elizabethtown, just south of Louisville on Interstate 65, also is experiencing growth in its logistics sector, including the 2018 opening of a state-of-the-art distribution facility for Netherlands-based Eurotrol. Eurotrol provides worldwide markets with artificial blood samples used to ensure the precision and accuracy of in-vitro diagnostics equipment.

The 11,000-s.f. logistics center will serve as the company’s principle distribution hub for North, Central and South America. Elizabethtown’s easy access to UPS Worldport in Louisville allows timely shipping of Eurotrol’s temperature-sensitive products.

Bus, barge, rail give key global connections

Business travelers and residents in Louisville and beyond benefit from a robust public transportation system whose central element is the Transportation Authority of River City.

TARC provides more than 12.5 million passenger trips covering more than 12 million miles annually. The buses – with comfort and productivity amenities such as on-board Wi-Fi, luggage racks, reading lights and other features – run 43 routes in five counties across Kentucky and Southern Indiana. TARC vehicles average more than 41,000 riders daily, and 83% of trips are for work or school.

TARC helps commuters avoid parking fees and buying gas. However, residents of Louisville and Southern Indiana also benefit from easy options to hoof it or take two wheels, thanks to the Big Four Pedestrian Bridge that connects Louisville’s picturesque Waterfront Park with downtown Jeffersonville, Ind.

Greater Louisville and Southern Indiana have the benefit of top-notch water, rail and logistics infrastructure to make their resident businesses highly competitive. 

The Port of Indiana-Jeffersonville is a part of America’s premier inland port system, the Ports of Indiana. Situated on two major North American freight transportation arteries – the Great Lakes and the Inland Waterway System – the state’s three-port system serves the world’s most productive industrial and agricultural regions.

More than 1,000 barges, 250,000 trucks and 16,000 railcars pass through the port each year, moving cargo to various states on the Inland Waterways System and to the world by transshipment with ocean vessels in the Gulf of Mexico.

Louisville Regional Airport Authority

600 Administration Drive

Louisville, KY 40209

(502) 368-6524

FlyLouisville.com

Louisville Muhammad Ali International Airport (SDF) and Bowman Field (LOU) are part of the Louisville Regional Airport Authority (LRAA). The LRAA is an autonomous municipal corporation established by Kentucky state statute that is responsible for owning, operating and developing both airports.

In 2019, SDF launched daily nonstop service to Los Angeles International Airport and passenger traffic is growing faster than it has is in over two decades. 2018 was the second busiest year ever with nearly 1.94 million departing passengers.

Six airlines serve SDF, offering flights to over 30 destinations. With one stop, travelers can reach more than 460 destinations.

Verst Logistics

300 Shorland Drive

Walton, KY 41094

(859) 485-1212

verstlogistics.com

Todd Johnson joined Verst Logistics as president and chief operating officer, effective March 25, 2019. In his new position, Johnson reports directly to Paul Verst, chief executive officer of Verst Logistics.

Johnson brings with him a broad spectrum of operational and commercial competencies, serving many industry segments across the full spectrum of logistics services. Prior to joining Verst, Johnson held various leadership positions with Kenco Logistics, Menlo Logistics (XPO), UPS Supply Chain and DHL Supply Chain.

Johnson has a bachelor’s degree in business administration and management from Indiana University, Bloomington, and is a member of Supply Chain Leaders in Action, The Council of Supply Chain Management Professionals, WERC and Transportation Intermediaries Association.

Transit Authority of River City

1000 West Broadway

Louisville, KY 40203

(502)585.1234

ridetarc.org

The Transit Authority of River City (TARC) provides mobility solutions for the Greater Louisville region.

TARC’s mission is to explore and implement transportation opportunities that enhance the social, economic and environmental well-being of its service area. This includes connecting residents of and visitors to the region with 102 paratransit vehicles and 223 buses traveling 43 fixed routes to locations within five counties across two states.

TARC is dedicated to moving the workforce of today and tomorrow. With an annual operating budget of $89.5 million, TARC’s team of 661 employees serve more than 41,000 daily riders, making possible $12.5 million annual customer trips traveling over 12 million total miles. With 63% of trips taken for work and another 20% for school, TARC is crucial in the region for delivering a qualified workforce to employers and for getting students to class.


AIRPORTS & GENERAL AVIATION

Atlantic Aviation

Louisville Muhammad Ali International Airport

atlanticaviation.com

Bowman Field

Louisville – flylouisville.com

Clark Regional Airport

Sellersburg, Ind. – flyjvy.com

Lebanon-Springfield Airport

Springfield, Ky. – lebanonspringfieldairport.net

Louisville Muhammad Ali International Airport

flylouisville.com

INTERNATIONAL SHIPPING COMPANIES

DHL

dhl.com

FedEx International

fedex.com

UPS

ups.com

PUBLIC RIVERPORTS & RAIL

Canadian Pacific Railway

cpr.ca

CSX

csx.com

Norfolk Southern

nscorp.com

Port of Indiana-Jeffersonville

portsofindiana.com

Jefferson Riverport International

Kentucky – jeffersonriverport.com

Meade County Riverport

meadeky.com/riverport-authority

TRANSIT SYSTEM

Transit Authority of River City

Louisville – ridetarc.org

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