UPS to spend $48 million on cold-chain healthcare sites
The package carrier is upgrading 27 temperature-controlled facilities as drugmakers ship more medicines that require strict handling.
By Daniel Okafor · Business Editor
3 min read
UPS plans to invest $48 million in 27 temperature-controlled facilities, CNBC reported, as more medicines require tightly managed shipping conditions. The spending targets a fast-growing part of health care logistics where delays or temperature swings can affect drugs, vaccines and diagnostics.
The facilities are spread across the Americas, Europe and Asia, according to CNBC. UPS said the upgrades are meant to improve speed and chain-of-custody controls for shipments that must remain within specified temperature ranges.
Those needs have become more prominent as pharmaceutical companies sell more biologic medicines and GLP-1 drugs, CNBC reported. Some GLP-1 treatments, including Novo Nordisk’s Wegovy and Ozempic, require refrigeration and temperature controls during transportation.
Cold-chain demand grows with new drugs
UPS said many newer medicines must be stored at defined temperatures to preserve their effectiveness, according to CNBC. The company said its investment will support products such as certain GLP-1 drugs, a category that has grown quickly in recent years.
Growth Market Reports projects demand for temperature-sensitive biologics to rise at an 8.3% compound annual growth rate through 2033, reaching about $39.1 billion, CNBC reported. The World Health Organization has said as much as 50% of vaccines worldwide are wasted each year, with cold-chain storage problems accounting for a significant share of that loss.
Kate Gutmann, UPS’ president of international, healthcare and supply chain solutions, said in a statement reported by CNBC that the company’s global cross-dock facilities expand its cold-chain network so critical treatments can reach patients safely and reliably. She said the company views health care logistics as more than package movement.
UPS Healthcare President John Bolla said the investments show the company’s effort to align its supply chain with the handling needs of newer treatments and diagnostics, according to CNBC.
Health care remains a UPS growth target
The investment follows earlier comments from UPS Chief Executive Carol Tomé, who told analysts on the company’s April first-quarter earnings call that health care is one of UPS’ top priorities and largest growth opportunities, CNBC reported.
Tomé said UPS’ global health care portfolio had gained market share each year since 2021, according to CNBC. She also said the company produced its first $3 billion health care revenue quarter in the first quarter, with all three company segments posting year-over-year revenue growth in the category.
A November KFF poll found that 1 in 8 U.S. adults were taking GLP-1 drugs for weight loss, diabetes or another condition, CNBC reported. That level of use has added pressure on distribution networks that must keep products cold from origin to delivery.
UPS’ planned upgrades show how carriers are putting more money into specialized logistics as pharmaceutical shipping becomes more complex. For the company, CNBC reported, health care is a central part of its plan to expand beyond standard parcel delivery and capture higher-value supply chain work.
This story draws on original reporting from CNBC.