The fate of a United Parcel Service Inc. logistics operation in Ontario for dot-com companies,still without a client three months after its launch,is up in the air.
Officials are struggling to decide how best to use space that has remained empty since the new service, UPS e-Logistics, began searching for clients in September. The Ontario operation is housed in a portion of a 250,000-square-foot building completed last summer, sharing space with UPS Logistics Group, a subsidiary that creates customized shipping and provided other services for major corporations.
Atlanta-based UPS e-Logistics is a wholly owned subsidiary of United Parcel Service Inc. and the first rollout of a UPS corporate incubator called e-Ventures. The Ontario location is one of three in a nationwide network the company deployed to provide warehousing, shipping, order fulfillment, inventory control, returns management, customer call centers and other services specifically for online businesses and divisions of companies that sell products over the Internet.
UPS officials were hoping to land a client in the Ontario building by the end of December. However, no deals were finalized,and by the first week of January, the Ontario project was on hold until the end of March, when the company will make a decision about what to do with the space, e-Logistics spokesman Jeff Asher said.
The building could continue as an e-Logistics operation if a client is found. Otherwise, it could be folded into the existing UPS Logistics operations or used for some other UPS function, Asher said.
A transportation analyst, however, sees a positive future for the e-commerce endeavors of UPS, a $40 billion-plus company.
“There’s a place in e-commerce for UPS,” said Doug Rockel of New York City-based ING Barings. “I don’t think it will be a complete reversal (of e-Logistics’ plans). They’re in it for the long pull, and they can afford to be in it for the long pull. It’s going to be a viable network.”
UPS may have expected too much too quickly at the Ontario site, he said.
The company began looking for e-Logistics clients in November and talked with several potential users, Asher said. He declined to name them.
In October, e-Logistics announced it would build a 400,000-square-foot Logistics and Technology Center in Elizabethtown, Ky. Construction is slated for completion by mid-year. Also, an existing facility in Louisville
is handling services for four clients, Asher said in November.
Asher said another facility will be built this year, in either the Southwest or Northeast.
Oracle Corp., PricewaterhouseCoopers and EXE Technologies Inc., a maker of warehouse management systems, are partners in the e-Logistics venture. n
Tucker is a staff reporter at the Business Press, Ontario.
