Dive Brief:

• FedEx Corp. announced that it is investing $1 billion to upgrade and increase the size of its Memphis, Tennessee, processing hub, according to the Times Free Press. The Memphis operation handles 47% of the company's package volume each business day.  
• As part of the construction project, which should begin in 2019 and wrap up in 2025, FedEx will build a new sorting facility, install new sorting systems, build a bulk truck loading facility and construct a new building that will be able to better handle the increasing number of oversized shipments, one of the results of the growing e-commerce sector.
• FedEx's headquarters is in Memphis, where it has 11,000 hub workers and 30,000 employees overall. The project will generate new automation and technology jobs, but the company did not provide specifics about how many and what kind of positions.  

Dive Insight:

In January, the Indianapolis Star reported that FedEx announced an even bigger investment — $1.5 billion during the next seven years — to expand its Indianapolis hub. The 2.4 million-square-foot hub is the second-largest FedEx package processing center in the country.

According to Urban Land Magazine, a CBRE report released in January revealed that the robust e-commerce market is not only driving a warehouse construction boom, but also is forcing redesign of the traditional warehouse to accommodate the logistics systems necessary for faster delivery to the end customer. This trend applies to "last mile" facilities, where packages start the final journey to consumers, and intermediate stops along the supply chain.

The average warehouse built between 2012 and 2017 was 185,000 square feet, 143% larger than those built between 2002 and 2007. Average warehouse height also increased almost four feet.

While e-commerce is a growth driver in the warehouse market, some construction companies specializing in traditional retail construction have seen it impact their businesses. Additionally, because brick-and-mortar retailers are feeling a pinch to their financials, some have opted for less expensive, smaller contractors to perform store renovations. Those firms, however, sometimes have less experience in retail construction, a situation that can lead to unsatisfactory results for the client.