UPS building $200 million facility, adds Saturday delivery to meet e-commerce demand

UPS announced today plans to build a US$200 million package operations facility in Arlington, Texas, just one day after it confirmed that it’s pilot Saturday-pickup project would be expanded nationwide through 2018. These developments point to an ongoing pivot towards more extensive and faster coverage by UPS in the context of growing e-commerce demand.

“This project is part of our ongoing efforts to keep pace with rapidly evolving demands of e-commerce customers in Texas, across the U.S. and around the globe,” said Craig Wiltz, president of UPS’ Red River District.

The Arlington project, about ten miles south of the Dallas-Fort Worth International Airport (DFW), will span more than 1.1 million square feet, on more than 110 acres. The hub will improve network efficiency and flexibility for business services and consumer-directed package services for the Dallas-Fort Worth Metroplex.

Consumers now expect next-day delivery, the weekend notwithstanding, and UPS is implementing one of its biggest shipping-time changes in its 109-years of operation, before upstarts like Amazon’s Prime Air steal its lunch money.

But weekends are already competitive. FedEx currently delivers on Saturdays, and the U.S. Postal Service is now making Sunday Amazon deliveries in some markets.

UPS began testing Saturday deliveries in Atlanta, Philadelphia and Los Angeles in 2016. Broader rollout begins this month in 15 additional metropolitan areas, including New York, Chicago and Boston.

By November, UPS expects to reach nearly 4,700 cities and towns. In 2018, that number will be 5,800.

For online retailers, increased deliveries mean fewer lost sales due to abandoned online shopping carts, which UPS found happens at a rate of 46 percent, in part due to deliveries taking too long.

UPS said it expects the additional day to require 6,000 additional hires nationwide by the end of 2018 and 1,400 full-time-equivalent jobs in Arlington. Teresa Finley, UPS’s chief marketing officer, noted that adding more hours to extant equipment, “utilizes our existing delivery network and offers customers an even faster ground delivery solution.”

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