FedEx to make investments in Indianapolis hub expansion, wage increases

FedEx announced plans to invest about US$1.5 billion into expanding its FedEx Express Indianapolis hub over the next seven years, creating a modernized and enlarged “SuperHub,” as well as accelerate plans to increase hourly wages.

The company said the investment is one part of a larger $3.2 billion investment plan, resulting from the passage of the recent tax reform act passed by the U.S. Congress at the end of 2017. FedEx, along with fellow integrator and competitor UPS, praised the tax cuts back in December, saying that the Trump Administration’s tax reform plan “would modernize the U.S. tax code and increase America’s competitiveness.”

FedEx said it will announce more details of the Indianapolis expansion program later this spring.

In addition to the Indianapolis expansion, FedEx will set about $200 million aside for increased compensation for hourly and salaried employees. Two-thirds of the amount will be used for advances in scheduled 2018 pay increases for hourly workers from October to April, while the remaining one-third will be used for performance-based incentives for salaried employees. FedEx will also make an investment of $1.5 billion into its pension plan.

According to the company, there has been “no change to its fiscal 2018 earnings or capital expenditure guidance, as issued on Dec. 19, 2017, as a result of these actions.”