Construction Projects

[UPSProbs]

Amazon competitive threat discussions never seem to go anywhere. I just want to know if we're spending money to move more volume peak 2016 than we did peak 2015. Money talks, so it should provide an insight into the thinking of senior leadership.

Does anyone see any meaningful construction under way or have you heard of any starting soon in your area?

 

[wkmac]

Amazon competitive threat discussions never seem to go anywhere. I just want to know if we're spending money to move more volume peak 2016 than we did peak 2015. Money talks, so it should provide an insight into the thinking of senior leadership.

Does anyone see any meaningful construction under way or have you heard of any starting soon in your area?

Oh yeah. Go to the UPS internal website, access the Plant Engineering homepage. Look down the menu for Weekly Updates with the latest calendar date and get an update of all the construction projects going on not just in the US but also in Europe and beyond. Pay close attention to the number of new automated sites being built and coming on line over the next couple of years. In the past years the number of new projects was typically only a handful, now they are coming in by the truck load.

The next thing to watch is the Sibus project (think the spelling is wrong but pronounced See-bus) UPS is working on in relationship with Siemans. This is an automated unloader with a capacity of 15k pph. Next phase testing about to start at Mesquite. This may be the future to capacity infrastructure expansion without expanding the real estate footprint as thru put capacity is increased. This isn't the Siemens design but the basic concept is the same. see video here

Also watch for existing facilities to be taken though what is called "Hub modernization" which is another word for automation. I've heard a goal of around 60% of existing major hubs over the next 3 years but I question if vendors can keep up with such demand. Just for normal maintenance needs, we're already seeing parts delays as vendors can't meet the demand of normal use and new construction.

Columbia SC Airhub for example just finished it's "Hub Modernization" and increased output capacity all within the 4 walls of the established building. We should have been doing this about 10 years ago but that's another argument for another time. I do know that discussions are taking place about building 2 mega hubs but I'm not prepared to say anything more than that for the moment. I'm a couple of years away from calling it a day but what I've seen over the horizon is just mind blowing. I'm glad to be heading for the exit but the technology and the chance to work with it makes me wish I was about 20 years younger. I think how we handle packages now verses how we will do it 10 or 15 years from now are going to be very different.

 

[Brownslave688]

There's some but how much sense does it make to pump millions of dollars into the system for what amounts to a few weeks worth of work.

 

[wkmac]

There's some but how much sense does it make to pump millions of dollars into the system for what amounts to a few weeks worth of work.

As verses the present model of spending millions for a few weeks worth of work?

 

[Brownslave688]

As verses the present model of spending millions for a few weeks worth of work?

I agree with what you posted. I just don't believe we are looking at wide scale upgrades. More along the lines of specific areas being upgraded.

I think the hubs where large amounts of volume will be upgraded and automized but individual buildings like mine will stay largely the same.


Could very well be wrong.

 

[wkmac]

I agree with what you posted. I just don't believe we are looking at wide scale upgrades. More along the lines of specific areas being upgraded.

I think the hubs where large amounts of volume will be upgraded and automized but individual buildings like mine will stay largely the same.


Could very well be wrong.

Depending on your building you may well be correct. But I can tell you this, it's only just beginning.

 

[worldwide]

Oh yeah. Go to the UPS internal website, access the Plant Engineering homepage. Look down the menu for Weekly Updates with the latest calendar date and get an update of all the construction projects going on not just in the US but also in Europe and beyond. Pay close attention to the number of new automated sites being built and coming on line over the next couple of years. In the past years the number of new projects was typically only a handful, now they are coming in by the truck load.

The next thing to watch is the Sibus project (think the spelling is wrong but pronounced See-bus) UPS is working on in relationship with Siemans. This is an automated unloader with a capacity of 15k pph. Next phase testing about to start at Mesquite. This may be the future to capacity infrastructure expansion without expanding the real estate footprint as thru put capacity is increased. This isn't the Siemens design but the basic concept is the same. see video here

Also watch for existing facilities to be taken though what is called "Hub modernization" which is another word for automation. I've heard a goal of around 60% of existing major hubs over the next 3 years but I question if vendors can keep up with such demand. Just for normal maintenance needs, we're already seeing parts delays as vendors can't meet the demand of normal use and new construction.

Columbia SC Airhub for example just finished it's "Hub Modernization" and increased output capacity all within the 4 walls of the established building. We should have been doing this about 10 years ago but that's another argument for another time. I do know that discussions are taking place about building 2 mega hubs but I'm not prepared to say anything more than that for the moment. I'm a couple of years away from calling it a day but what I've seen over the horizon is just mind blowing. I'm glad to be heading for the exit but the technology and the chance to work with it makes me wish I was about 20 years younger. I think how we handle packages now verses how we will do it 10 or 15 years from now are going to be very different.

Very interesting post. UPS is late to the game with automated buildings but they have the cash on hand to make it happen.

It will take years and a lot of CAPX, but automation is the future. The system below may not work with existing building set-ups, but new buildings could be built to use this system and there may be some buildings that could be retrofitted.

Again, huge CAPX but the savings from labor and workman comp claims would be huge. Not to mention that automation can work 24/7.

 

[oldngray]

I can't see it being cost effective to upgrade most of the old buildings but probably will be included in new construction. Maybe a few of the larger hubs being retrofitted but not all the smaller ones.

 

[Brownslave688]

Very interesting post. UPS is late to the game with automated buildings but they have the cash on hand to make it happen.

It will take years and a lot of CAPX, but automation is the future. The system below may not work with existing building set-ups, but new buildings could be built to use this system and there may be some buildings that could be retrofitted.

Again, huge CAPX but the savings from labor and workman comp claims would be huge. Not to mention that automation can work 24/7.

It can work work 24/7 but that's not really how our volume works. Our operation is very time sensitive.

 

[wkmac]

Good stuff @worldwide

No doubt in the years ahead as to what we will see or how our business structure takes shape.

 

[wkmac]

I can't see it being cost effective to upgrade most of the old buildings but probably will be included in new construction. Maybe a few of the larger hubs being retrofitted but not all the smaller ones.

Many of the upgrades are taking place in existing buildings. The goal at some point is to have all the hubs converted. As to automation down to the small center level, many of the new package centers are in fact being built automated. As this continues, in time so will existing small package centers also make the change.

It can work work 24/7 but that's not really how our volume works. Our operation is very time sensitive.

That may be about to change as well but I'll just leave it there for now.

 

[Brownslave688]

That may be about to change as well but I'll just leave it there for now.

Sorry I'm think my small center again. Yes hubs already run close to 24 hours a day don't they?



Here it's more like 7-8 hours.

 

[wkmac]

Sorry I'm think my small center again. Yes hubs already run close to 24 hours a day don't they?



Here it's more like 7-8 hours.

Your scenario "if" such should occur "may" likely be among the last but I use the word "may" advisedly.

As the old saying goes, location, location, location.

 

[worldwide]

It can work work 24/7 but that's not really how our volume works. Our operation is very time sensitive.

Of course it's time sensitive and some operations will not be impacted. Things change and systems evolve over time. Perhaps buildings that currently do not have day or twi sort could have automated sorts and loads could be advanced cutting down transit times (a current area of concern vs. FedEx Ground). I would not think about how the system is today but how it could be in the future.

 

[silenze]

Hey they did pave the gravel lot at cach. Now its easier to go back there and sleep

 

[Brownslave688]

Hey they did pave the gravel lot at cach. Now its easier to go back there and sleep

No pavement here yet. Hell we have guys parking in corn field next door if the preload hasn't wrapped before we get there. Lol

 

[wkmac]

Of course it's time sensitive and some operations will not be impacted. Things change and systems evolve over time. Perhaps buildings that currently do not have day or twi sort could have automated sorts and loads could be advanced cutting down transit times (a current area of concern vs. FedEx Ground). I would not think about how the system is today but how it could be in the future.

Good points but there is another advantage of automation that connects to what you said above.

In say a metro area for example with both hubs and centers located but where say at peak, hub volume exceeds hub capacity. With an automated package center in the area that has no day or midnight sort, it might be possible to crank up during those times and add more local capacity and not roll loads, thus keeping the network flowing and the hubs clean. Obviously there is a lot more too that but that is one added potential benefit.

There are many "what if" scenarios and likely scenarios we can't even think of yet that automation could be a solution for. I'm not discounting the negatives from a labor POV, I am a Teamster after all but working and maintaining conveyor systems, I can see the other side as well, self serving that it might be.

 

[wkmac]

No pavement here yet. Hell we have guys parking in corn field next door if the preload hasn't wrapped before we get there. Lol

Corn Field!

Corn fields, construction, grading, sorry but I could not resist!

 

[Dutch Dawg]

We were rumored to be getting much needed expanded paving at our center in 2015. Then IE came back in and realized with all the chuck hole infill occurring from skid debris and the boundary fence expanding out to the east on it's own with help from trailers being backed into it; it would be more cost effective to just let nature take it's course for the expansion.

 

[FrigidFTSup]

They put railings up by our clerk station last week. Good for the year.