New $109M FedEx facility in Cedar Rapids to open in late 2022, hire hundreds

CEDAR RAPIDS — When the new FedEx Ground distribution center opens later this year in southwest Cedar Rapids, it will process thousands of packages an hour and create hundreds of new jobs, a FedEx executive said Thursday.

The construction is part of FedEx’s expansion nationwide as e-commerce continues to grow, Marc Williams, senior vice president of operations for FedEx Ground, said at the Cedar Rapids Metro Economic Alliance’s annual meeting

“Our facilities are strategically located near major highways and customer distribution centers, as well as in areas where there's a strong local community workforce for recruiting employees, and Cedar Rapids is definitely one of them,” Williams said at the meeting at the DoubleTree by Hilton convention complex.

Construction of the $108.6 million, 479,000-square-foot warehouse on Commerce Park Drive SW is expected to be finished in the fall.

The opening is expected to create 359 part-time jobs and 75 full-time positions, with 35 of those jobs at the state’s high-quality wage threshold of $23.20 an hour.

The southwest quadrant has experienced what officials call an “explosion” in development in the past five or so years, amounting to an estimated $1 billion in investment.

With The Eastern Iowa Airport, Interstate 380 and Highway 30 nearby, FedEx is among several companies staking claim to sites in Cedar Rapids.

“As is the case in our new facility here in Cedar Rapids, we typically locate in industrial parks, where we're close to some of our high-volume customers,” Williams said. “The closer they are to us, the later in the day we can get their packages, and we ensure that they're moving to the next destination late into the night and early in the morning.”

City Manager Jeff Pomeranz said Cedar Rapids is seeing growth throughout the community and region, but particularly around the airport.

“As you drive out in that area, it's impossible to miss the number of projects that are happening,” Pomeranz said.

Those projects, he noted, include BAE Systems’ 200,000-square-foot classified defense aerospace facility worth more than $170 million.

‘State-of-the-art’

The new FedEx Ground warehouse is about a mile away from an existing facility that has provided ground pickup and delivery services in Cedar Rapids since 2008.

The new building will augment the existing facility on Capitol Drive SW, Williams said.

According to Williams, the new “state-of-the-art” facility will incorporate advanced material handling and sorting technology.

The facility will be able to process up to 15,000 packages an hour when it opens this fall. A year later, that processing is expected to reach 22,000 packages an hour, Williams said.

This facility will employ hundreds of local citizens, support dozens of locally owned businesses that contract with FedEx and serve thousands of commercial and residential customers throughout the region, Williams said.

Pulling off such a project involves collaborating with partners, including the city, state and FedEx Ground, Williams said, as well as matching available jobs with the local workforce and increasing customer demand.

Pomeranz said Cedar Rapids was “excited” when FedEx first expressed interest in building a warehouse and distribution facility the city, and the city was eager to compete and secure the development. Ultimately, he said, the agreement they reached was a “win-win” for both entities.

“They wanted something that would work for their company, and they wanted something that would work for our region, our community and our state, and that was the most encouraging,” Pomeranz said.

FedEx growth

The growth in e-commerce amid the COVID-19 pandemic has driven FedEx Ground’s expansion nationwide, Williams said.

The company’s average daily volume of more than 10 million packages has more than doubled in the last decade, he said, with much of that growth seen during the public health crisis.

Since June 2021, Williams said FedEx has added about 14 million square feet of sorting capacity — the equivalent of 300 football fields. The company opened 20 new facilities in those six months, while expanding existing operations.

In the last six years or so, Williams said FedEx Ground has added nearly 43 million square-feet to its network, including more than 65 new, fully automated facilities, and expanded delivery services to seven days a week.

In Iowa, Williams said FedEx operates 10 facilities that employ 1,500 people as operations managers, engineers, maintenance technicians, administrative staff and package handlers.

The company contracts with more than 70 local businesses in the state to provide transportation services for tens of millions of packages a year, he said.

“These strategic investments in our network and technology has helped us to disrupt the ground shipping industry,” Williams said.

“We now operate in a highly flexible and responsive network that allows us to handle an e-commerce boom that has accelerated beyond anybody's expectations during the pandemic,” he said. “… We saw it coming, and we've been investing in the future.”

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