FedEx exploring $199 million Kentucky expansion

Posted at 10:23 AM, Sep 25, 2015

CINCINNATI -- FedEx Ground Package System Inc. is considering a $199 million expansion of its Northern Kentucky distribution hub as part of a larger master plan to expand its shipping capacity.

Kentucky’s Economic Development Finance Authority on Thursday approved up to $1.75 million in tax incentives to encourage the expansion.

“We’re hopeful,” said Dan Tobergte, president of Northern Kentucky Tri-Ed, the region’s lead economic development arm. “It’s a step along the way, but the decision hasn’t been made yet.”

The KEDFA staff report said FedEx is looking to expand in Kentucky to address a projected increase in package volume and relieve another hub that is running out of shipping capacity. A KEDFA spokesman said Fedex would create 96 new jobs with the expansion.

Tobergte said Fedex is pondering an expansion of the Enterprise V Industrial Park where the company already employs hundreds.

FedEx opened its Northern Kentucky hub in 2005 with a $50 million investment that was projected to employ more than 235 office and clerical employees, 1,300 package handlers and 400 independent contractors at full capacity.

Tobergte isn’t sure what other airports are in the running for the FedEx facility. FedEx hasn't returned a call seeking comment.

But the Kentucky incentives were approved on the same day that the Wilmington Air Park confirmed it’s working with a new cargo client that is testing the material-handling and shipping capabilities of LGSTX Services, the logistical-services subsidiary of Air Transport Services Group, Inc.

“It’s a pretty small operation at this point,” said ATSG spokesman Paul Cunningham. “We have about three dozen people involved on our end.”

Launched 10 days ago, the new cargo-handling operation is running two flights a day into Wilmington for air-to-air shipments and air-to-truck. ATSG won’t name its new client, code-named Aerosmith, but local economic development boosters have speculated FedEx, Amazon and Pepsi as possible contenders.

Wilmington has been hungry for aviation expansions since 2008, when DHL Express left Clinton County for Northern Kentucky – eliminating 8,000 Ohio jobs and boosting the city’s unemployment rate to 12.8 percent.

A 250-job expansion in an aircraft maintenance hangar brought Air Park employment to 640 in 2014. Cunningham said “it’s really too early to say” how many jobs could be created because of the new cargo-handling client.