For at least five years running, UPS Healthcare Logistics has been opening new warehousing/distribution centers around the world; now it’s coming back to North America to expand capacity on this continent. Five new or reallocated facilities are being added, totaling 800,000 sq. ft. and representing a 15% expansion of its global network of 37 facilities, now reaching nearly 6 million sq. ft. Bill Hook, VP, global strategy, says that UPS continues to attract customers from biopharma and med device manufacturers based on a trio of service attributes: regulation-compliant facilities; economics of multitenant facilities (as opposed to ones dedicated to single clients); and a standardized set of operational and performance attributes globally. “Industry wants the ability to grow or shrink its logistics capabilities based on market conditions, which our services allow them to do,” he says. Another driver is the industry’s growing willingness to explore alternative distribution strategies, “including direct-to-pharmacy and direct-to-patient.” The company has doubled the size of its internal order-management capabilities to accommodate this trend, he says.
The specific expansions are in the US and Canada:
- 200,000 sq. ft. in its Burlington, ON, campus, bringing the total there to 600,000 sq. ft., and near three international airports;
- 225,000 sq. ft. in Louisville, KY, bringing the total there to over 1 million sq. ft. Louisville, besides being the “flagship” Healthcare Logistics facility, is adjacent to UPS’ Worldport global air hub;
- 220,000 sq. ft. at Mira Loma, CA, bringing the total of this northern California facility to over 350,000 sq. ft.
- 90,000 sq. ft. of newly dedicated capacity in Atlanta, GA, now providing over 200,000 sq. ft of capacity;
- 55,000 sq. ft in Reno, NV, bringing the total there to over 150,000 sq. ft.
Hook says that UPS Healthcare Logistics is currently running at 80% capacity (including the newly opened space), which is very close to the 85% capacity figure that triggers new space commitments. Locations are already being scouted, he says.
UPS as a whole was consumed with the potential acquisition of TNT Express, the Dutch express-delivery company that it bid to acquire in early 2012. After months of negotiations with European Commission authorities, UPS withdrew its €5.2-billion offer, pre-empting the EC after the latter told UPS that it was “working on a decision to prohibit” the transaction. TNT will now go forward as an independent company, although its parent, PostNL, is reportedly still seeking to sell its stake.
“That acquisition would have been a nice complement to Healthcare Logistics in certain parts of the world,” commented Hook, “and its business in Europe and Asia would have added strengths to our company.”
Meanwhile, another part of UPS, UPS Ocean Freight Services, recently announced that it has added more than 300 less-than-container-load (LCL) lanes globally in the past year, reaching a total of over 1,700 lanes. “Expanded LCL lanes enable companies to continue to mode-shift from heavy air freight by reducing overall transportation spend as companies look for cost savings,” said Andy Huckbody, VP of Ocean Freight Services, in a statement. UPS operates as a non-vessel-owning common carrier (NVOCC), contracting with ship owners to manage its seaborne freight.