UPS Constructs New Distribution Center in Ontario as Part of Worldwide Expansion Effort

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). United Parcel Service, Incorporated (NYSE:UPS) (Atlanta, Georgia) is constructing a new logistics center in Burlington, Ontario, which will be the Canadian headquarters for UPS Supply Chain Solutions. The facility is being constructed by Giffels Design-Build, Incorporated of Toronto, Ontario. Construction began in the first quarter of 2005 and is expected to be complete in the first quarter of 2006. Once this facility is operational, several older and smaller offices and distribution centers in the region will be closed.

The 800,000-square-foot campus will consist of two buildings. The first is a 550,000 square-foot distribution center that will be geared to the logistical needs of consumer goods and high-tech business. The second will be a facility that accommodates the needs of the pharmaceutical and medical device industries. There is space for a third 350,000 square-foot building on an adjacent 9.6-acre site.

The new center will have a super flat finished floor, which will allow UPS to utilize its existing Radio Frequency and Warehouse Management System to rapidly and accurately retrieve orders at heights up to 30 feet. Between the two buildings the campus will have over 115 loading doors with space for an additional 35, if required.

UPS is currently undergoing an aggressive growth program both domestically and abroad. UPS has announced plans to expand its domestic air freight network, including an $85 million expansion of their Louisville, Kentucky Worldport Air Hub, see related article Worldport Air Hub Expansion Project Ready for Construction in Kentucky, in addition to the construction of five regional hubs at airports across the country, some of which host UPS facilities that will be expanded. The hubs will be located in Ontario, California; Rockford, Illinois; Dallas, Texas; Philadelphia, Pennsylvania; and Columbia, South Carolina; they are expected to come on-line in 2006. These six facilities are expected to form the backbone of the extensive air network for UPS Supply Chain Solutions.

UPS Supply Chain Solutions is also investing heavily in its international networks, especially in emerging markets such as China. In 2005, UPS opened three new distribution centers in Shanghai, Suzhou and Futain and has plans to open an additional twenty facilities within the next two years. The facilities in China are intended to distribute textile/apparel, high-tech, automotive and consumer goods for export and import. The investment is expected to bring extensive supply chain expertise, quality and capabilities to more Chinese businesses, which will further improve transit times, visibility and service levels for international trade according to UPS officials.

In Shanghai, the new 160,000-square-foot facility is located within the Wai Gao Qiao Free Trade Zone. Also, UPS has three additional distribution centers totaling approximately 400,000 square feet, including a large ocean container freight station, a sizeable airfreight facility at Pudong Airport and a customs office in downtown Shanghai. UPS is also constructing a logistics hub in Singapore within the Airport Logistics Park Singapore, also known as ALPS. The 425,000- square-foot facility is scheduled to open in 2006. ALPS is Singapore’s first logistics Free Trade Zone (FTZ) and was opened in March 2003. The facility is also close to the ocean port allowing UPS to provide air and ocean freight, in addition to logistics activities in a single hub. Large cargoes can be shipped to Singapore and then quickly broken down into smaller shipments for redistribution to their final destinations. The company’s logistic and distribution operations are expected to increase by 50 percent in Singapore.

The new 240,000-square-foot bonded warehouse and full distribution center in Futian is also located in a Free Trade Zone. In Suzhou, the 66,000-square-foot facility was designed specifically for the handling of freight for high-tech customers.

UPS has served needs of customers in China since 1988 and UPS Supply Chain Solutions’ offerings include freight forwarding, order and inventory management, shipment preparation, cross-dock operations, critical parts distribution, service parts logistics, international trade management, customs brokerage and domestic transportation services. The expanded facility and transportation network is expected to accelerate the movement of components and finished goods to and from the rapidly emerging provinces of China, especially in the Pearl River Delta and the Yangtze Delta River regions.

UPS was founded in 1907 as a messenger company in the United States and has grown into the world’s largest package delivery company and a global leader in supply chain services. Today UPS manages the flow of goods, funds, and information in more than 200 countries and territories worldwide. Its business unit, UPS Supply Chain Solutions, offers transportation and freight services, logistics and distribution, and international trade services.

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