Parcel shipping: FedEx Ground opens up new Chicago hub

PITTSBURGH—In an effort to meet growing customer demand, FedEx Ground recently opened up a new distribution hub in Chicago.

The $125 million, 430,000 square-foot hub is located in Bedford Park, Illinois and is adjacent to the company’s original Chicago hub, which was one of the first three hubs built in 1985 when FedEx Ground’s predecessor Roadway Package Systems was formed, according to FedEx officials.

The FedEx Ground Chicago hub is part of a nationwide network expansion to boost daily package volume capacity and further enhance the speed and service capabilities of its network, a company spokesperson told LM. Since embarking on the multi-year expansion program in 2002, FedEx Ground has opened eight new hubs featuring advanced material handling systems and expanded and/or relocated more than 500 local facilities.

The new facility is nearly twice the size of its previous location and will provide increased processing rates of up to 30,000 packages per hour, additional loads and unload doors, and more scan tunnels and sorters, according to the company. The old Chicago hub processed 25,000 packages per hour and had 120 load doors compared to the 144 load doors in the new hub and 26 unload doors in comparison to the 32 unload doors in the new hub.

FedEx Ground has had its eye on this effort going back to 2002, said Erin Truxal, FedEx Ground spokesperson.

“In 2002, FedEx Ground bought 20 acres of land but did not begin construction until 2007,” said Truxal. “We knew that when we bought the land in 2002 that we would use it to build a new hub when additional network capacity was needed. We take a very fiscally responsible approach and build only when necessary to add package capacity to our network in response to customer demand.”

Truxal said the biggest benefits of this hub for shippers are the network enhancements which equates to faster delivery times.

“As a result of our nationwide network expansion, we have accelerated ground service delivery by one day or more in more than half of the United States,” she said. “Now, FedEx Ground delivers more than 50 percent of packages in two days or fewer and more than 80 percent of packages in three days or fewer. All of this has been achieved while we have increased average daily package volumes by more than 50 percent from 2.1 million in 2003 to more than 3.4 million today.”

The new Chicago facility is equipped with advanced material handling and scanning technology, which ensures customers have faster access to more information while enhancing the productivity and efficiency of FedEx Ground’s sorting operations, said Truxal.

The Chicago hub serves the Chicagoland area in addition to the entire country. And as a central distribution center, the Chicago hub serves customers all over the country. FedEx Ground operates a hub and spoke system where packages move from hub to hub and then to a local terminal for final delivery.

“Enhancing our distribution capability in the central region is an important step in our ongoing efforts to increase the size, speed and efficiency of our network,” said Jim Primm, vice president of the central division of FedEx Ground, in a statement. “This new facility demonstrates the region’s ongoing importance as a major distribution and logistics center, and will help us meet the increasing demand of local shippers as we transport shipments within the Chicago area and across the country.”

 

 

Source: Logistics Management