UPS rolls out plans for new Arizona-based facility

UPS said this week it plans to open up a Goodyear, Az.-based package processing facility, leveraging the increasing amount of e-commerce activity in the Greater Phoenix area.

Goodyear is west of Phoenix and is a “rapidly growing commercial and residential community” in close proximity to the Loop 303 Freeway and I-10, according to UPS. The facility, which is expected to be completed in late 2019, will feature more than 970,000 square-feet of operational technologies and sortation equipment and add more than 1,500 jobs to the Goodyear area.

UPS said that the facility’s phased hub construction will modify 618,000 square-foot structure located on 140 acres in the PV303 Development, with part of the building to be in operation later this year for Peak Season in order to handle processing and automated sorting capacity for lightweight small packages that are common in e-commerce activity and are shipped throughout Arizona and the Southwest, it added.     

UPS Public Relations Manager Susan Rosenberg told LM that growth was the primary driver leading UPS to expand in Goodyear, with a large amount of that growth correlating to e-commerce.

“Population growth and density means not only the receiving consumer audience, but more growth of fulfillment operations and distribution centers to serve regional populations within 2-3 day ground territories,” she said. “We’ve talked over the past few years about the strategic investment we are making in facility modernization and expansion. This year, our capital expenditures are increasing to be 6-7% of revenues; that’s up from our historical averages.  There are places around the country where we can add larger automated facilities to complement the existing facilities in a metro and optimize regional processing within the network. You’ve already seen the announcements of larger regional facilities in Atlanta, Salt Lake City, Arlington (Dallas) and now Phoenix. But we’re expanding and modernizing existing major hubs that are either underway or completed in Louisville, Jacksonville, Columbus, Memphis, Chicago, Austin, San Antonio, Ontario (CA) and elsewhere. We’ll have more to come.”  

UPS said that over the next three years, its processing capacity is expected to increase as the Goodyear location build-out will be comprised of alternative fuels infrastructure, a UPS Customer Center, and a local dispatch for package delivery trucks.

Rosenberg said that UPS has horizon planning for capital investment, explaining that UPS looks at its needs, property in different areas, and incentive programs that may be available to help the company compare site selection. And she added that project timing and commitments may adjust based on when property becomes available and forecasted change from new customers in an area.

As for the initial benefits of the Goodyear location, she cited peak hub processing capacity this year and improvements from an advanced facility enhance service, speed and efficiency.

“This helps us hold a line on costs, but gives us flexibility,” she said. “That may be new operational technologies that allow us to change daily how we route volume within and through the building. We’re not reliant on only loading trailers coming from X destinations to use a certain bank of Y doors. Or, if we have a particular area with contingency needs of weather or a volume surge from a particular product launch or promotion, we can shift our volume flows to this building and better utilize all of the network to route processing around.”

UPS also has hubs in Phoenix and Tempe for in-transit sorts, as well as package centers there and in Mesa and Estrella, where there are local sorts and package car dispatch for longer distances to fast-growing residential areas.

“When the new facility is completed, we’ll be able to shift routes around within the metro area to handle growth while reducing mileage and improving service,” said Rosenberg. This facility will provide more optimization of the UPS ground network to gain efficiencies.”

UPS’s decision to expand into Goodyear was warmly embraced by Chris Camacho, president of the Greater Phoenix Economic Council.

"The decision by UPS to establish a regional operations center in Greater Phoenix is indicative of the growing e-commerce industry,” Camacho said in a statement. “The Goodyear location along the Loop 303 offers a strategic geography to placeUPS in proximity to a large consumer base, as well as add a considerable number of jobs to our market.”