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FedEx Express Americas President Richard Smith announced that the parcel delivery giant is investing nearly $200 million in a new sorting facility at the Ted Stevens Anchorage International Airport.
It’s the latest public commitment amid a flurry of formal agreements and rumored developments for the growing cargo business at the airport.
“Right now cargo is king and we expect that trend to continue for some time, and Alaska, and in particular Anchorage, are only growing in importance over time,” Smith said.
FedEx initially expects to upgrade its main ramp and 12 aircraft gates by this fall in response to increased activity through Anchorage, according to Smith, with additional work coming after.
The rest of the new facilities are tentatively scheduled to be open by 2024.
He quipped that the investment could “go north” of $200 million if global supply chain issues persist.
Unusually long wait times for transporting goods via cargo ship and snarled logistics at some of the nation’s biggest ports have led to substantial growth in the air cargo trade as a workaround, even if it is more expensive .
A record 3.6 million tons of cargo passed through the airport — the fourth busiest cargo hub on Earth — last year, up 14% from 2020, the previous record.
“This is the first time they have said, ‘We are building the project; we are making the investment,’ ” Anchorage Economic Development Corp. CEO Bill Popp said in an interview. “It’s an exciting announcement. They are building a very large facility.”
Smith revealed the company’s plans at AEDC’s annual economic forecast luncheon.
Representatives for the Memphis-based company previously indicated an expansion to its Anchorage cargo handling facilities was being considered after public notices for a proposed lease agreements at the state-owned airport were published, though nothing was final.
A public notice issued in March 2021 regarding lease negotiations with FedEx outlined a $120 million project to add a new domestic operations center, warehouse improvements and added aircraft parking over approximately 22 acres. The proposed lease at the time had a 30-year term with options for up to 50 years.
Anchorage Airport spokeswoman Megan Peters wrote via email that the lease negotiations with FedEx are ongoing and referred additional questions about the project to the company.
FedEx has until April 3 to sign a lease, at which point a new public notice for negotiations would have to be issued if a lease is not finalized, according to Peters.
A statement from a FedEx corporate spokesman in response to questions about the details of the company’s plans in Anchorage reiterated that Alaska has been an important strategic location for FedEx for decades.
“As part of the company’s continued investment in technology and operations FedEx is investing $200 million to expand and upgrade our facilities in Anchorage to handle increases in international and domestic volume and meet growing customer demand,” the FedEx statement reads.
Even without a signed and sealed lease agreement, the fact that a large company in a highly competitive industry would make public statements about the specific size of a project is quite significant, according to Popp.
“It is a clear statement of confidence by FedEx in the value of Anchorage International Airport for their business,” he said.
The FedEx announcement is the latest of five major cargo storage and logistics projects at the Anchorage airport that could total upward of $1 billion in development activity if they all move forward.
While FedEx is building near the center of the airport, UPS is slowly working on its own large project estimated at $110 million at the north end of the airport.
Some of the cargo projects have been slowed by significant PFAS soil remediation work that must be done at the sites before construction can commence.
Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.