FedEx investing $450M more in $1B Memphis hub modernization

Dive Brief:

FedEx and Tennessee Gov. Bill Lee have announced that the company will invest an additional $450 million into its Memphis hub, bringing the total of its modernization program there to $1.5 billion.
During the next six years, in addition to outfitting its hub with new technology systems, FedEx will build a new sort facility and a new bulk truckload building in response to the growth in e-commerce.
Based at the Memphis International Airport, the Memphis hub processes 47% of FedEx's daily package volume, and the expansion should be complete in 2025.

Dive Insight:

FedEx originally announced its work at the Memphis hub in March 2018. A few months earlier, the shipping giant also said it would spend $1.5 billion on a seven-year program to expand its Indianapolis hub, which, at 2.4 million square feet, is FedEx's second-largest package processing center in the U.S

Still a big customer of all the major shipping companies, Amazon has become somewhat of a competitor, investing significant amounts of money in its own shipping and logistics centers.

In December 2018, Amazon announced that it was in progress with the construction of a regional hub at Alliance Airport in Fort Worth, Texas. Last month, the airport scored a $5.5 million grant from the Federal Aviation Administration’s Airport Improvement Program, money that will help pay for a taxiway to connect Amazon's operations to the rest of the airport.

Then, in May, the company broke ground on a $1.5 billion Amazon Air hub at the Cincinnati/Northern Kentucky International Airport in Hebron, Kentucky. The project will include a ramp tower, sorting facilities and enough space for up to 100 aircraft. Amazon hired AECOM to provide design services and Woolpert to provide planning, civil engineering and surveying for the project and expects that the joint venture of Whiting-Turner Contracting Co. and Kokosing Construction Co. will complete the facility in time for it to begin operations in 2021.

Amazon is also making a $100 million investment in an air cargo hub at Lakeland, Florida's Lakeland Linder International Airport. As part of the deal, Amazon will lease almost 50 acres at the airport, where it will build a seven-jet hangar. The airport will make runway improvements, upgrade its landing systems and install five new fuel tanks, according to The Ledger.

However, according to Goldman Sachs, Business Insider reported, Amazon's 70 planes, 10,000 vehicles and other logistical assets are no threat — yet —to FedEx, UPS and other major traditional shippers. The investment giant said that in order for Amazon to catch up to those transportation heavy hitters, the company would need to invest many years and around $122 billion, $15 billion of which would have to be spent on air cargo and sortation facility construction.