New Horizon Apartments is located just 5 minutes from this $1 Billion Dollar Modernization.
FedEx Investing $1 Billion in Memphis Hub Modernization
By Bill Dries
FedEx founder Fred Smith and Tennessee Gov. Bill Haslam announced Wednesday, March 14, the $1 billion modernization of the Memphis hub. (Daily News/Bill Dries)
Memphis-based FedEx Corp. will spend $1 billion on a modernization of its Memphis hub over a six-year period, company founder, chairman and CEO Fred Smith announced Wednesday, March 14.
The announcement on the tarmac at Signature Air with the FedEx Super Hub in the background follows a January announcement by the company of a larger overall package of $3.2 billion in expansions, pay hikes, bonuses and pension fund expansion as a result of federal tax reform.
The Memphis hub expansion is the second $1 billion or greater capital expansion in the city following the announcement of the expansion of the St. Jude Children’s Research Hospital last year.
“Modernization and expansion of the Memphis hub will ensure that we continue to provide outstanding service to our customers around the world and make this an even better place to work,” Smith said.
David L. Cunningham, president and CEO of FedEx Express, the oldest and original division of the company, described the Memphis hub renovation and expansion as “transformational.”
“We will be investing in new sort systems, new automation, new capabilities, modernization of this facility, expanding our truck and unloading capabilities substantially. But we are also going to be making this a much better place to work for our employees,” Cunningham said. “Our growth in our business is what is driving this investment. What we see happening with e-commerce and large, oversize shipments is a key part of this investment.”
Cunningham said the expansion and renovation will also change the nature of jobs in the Super Hub.
“You are talking about jobs that are going to be much more oriented toward technology, automation, modernization and it’s going to be transformational for Memphis and for the state,” he said.
FedEx announced in January that it would invest $1.5 billion in a similar overhaul of the FedEx Express hub in Indianapolis.
But Cunningham says the larger dollar figure doesn’t mean the Memphis hub becomes a lesser hub in the process.
“The Indy hub is an important hub to us. It’s a hub that’s much smaller than the Memphis hub,” he said. “This will remain the largest, most complex, most capable hub that we have anywhere in the world.”
Cunningham started with the company working in the hub in the early 1980s. Before the press conference, he told Tennessee Gov. Bill Haslam that when he started the hub moved 100,000 packages a night, which compares to 185,000 packages an hour currently.
“You cannot overstate their importance,” Haslam said of FedEx’s economic impact on the state and the city. “They could land these planes and transfer these packages anywhere in the country.”
“There is no direct state incentive in this,” he told reporters later. “We did have a program where we addressed the amount of fuel tax FedEx is paying several years ago. But this is not tied to that.”
FedEx is among major U.S. corporations making such investments as a reaction to federal tax reform that allows them to repatriate money they have overseas at a lower tax rate.