UPS to invest $48 million in temperature-controlled facilities amid healthcare boom

United Parcel Service is investing $48 million in 27 temperature‑managed facilities because the trade sees a boom in healthcare logistics, CNBC has realized completely.

The facilities, positioned throughout the Americas, Europe and Asia, are optimized for transferring round shipments that want to be saved at sure temperatures. The corporate mentioned the funding will assist it keep forward of a boom in medicines and prescription drugs — like some GLP-1s — which have to be saved at sure temperatures by enhancing velocity and end-to-end chain of custody.

“Our world cross-dock facilities strengthen our end-to-end cold-chain capabilities to guarantee vital remedies are delivered safely and reliably to sufferers around the globe,” mentioned Kate Gutmann, UPS’ president of worldwide, healthcare and provide chain options. “This effort – and all of our work in healthcare logistics – extends from a deep understanding that we’re doing greater than transferring packages.”

The demand for temperature-sensitive biologics is projected to develop at an 8.3% compound annual development fee by 2033 and attain a market worth of roughly $39.1 billion, in accordance to Development Market Studies. Many new medicines are required to be saved at particular temperatures to keep efficacy, UPS mentioned, making healthcare logistics extra essential than earlier than.

In accordance to the World Well being Group, up to 50% of worldwide vaccines are wasted yearly, with a good portion of that coming from cold-chain storage points.

“These investments replicate our dedication to proceed to align our main end-to-end provide chain to shield progressive remedies and diagnostics, supporting higher affected person outcomes,” UPS Healthcare President John Bolla mentioned in a press release.

UPS’ transfer comes because the trade general has seen rising investments in the house, particularly with the meteoric rise of GLP-1 medication. Medicines like Novo Nordisk‘s Wegovy and Ozempic require strict refrigeration and temperature management throughout transit. A November KFF ballot discovered that 1 in 8 Individuals are taking GLP-1s.

UPS CEO Carol Tomé mentioned on the corporate’s first-quarter earnings name in April that healthcare stays one of many firm’s high priorities and largest areas of development.

“Our world healthcare portfolio has gained market share yearly since 2021,” she mentioned on the decision. “And in the primary quarter of this 12 months, we generated our first $3 billion healthcare income quarter ever, with all three of our segments delivering year-over-year income development.”

Tomé added that UPS is dedicated to persevering with to “lean into that house in a significant manner.”