FedEx-TNT Express merger will expand healthcare logistics options

Many parcel-delivery services have targeted the healthcare industry as a growth opportunity, and for clinical trial logistics, express delivery in particular has been an attractive market. FedEx, already a major player in both clinical and commercial healthcare logistics, is hoping to succeed where UPS failed in a bid to acquire TNT Express, a global parcel-delivery service based in The Hague, Netherlands. In 2013, European regulators stopped the UPS bid (of $6.9 billion) for anticompetitive reasons; UPS then proceeded to buy several regional drug distribution companies in the UK, Poland and elsewhere. But commentary from the financial press indicates that the FedEx bid of $4.8 billion) will succeed because it turns two laggard players in the European market into a one organization that can compete with UPS and DHL, which together own about two-thirds of the European market. (In the interim, the euro has fallen by about 19%, so the two bids are close in value.)

If FedEx succeeds, it will be acquiring a business that has been building out its healthcare logistics infrastructure. As recently as March, TNT Express announced the opening of a 2,000-sq. m. healthcare hub in Heerlen, Netherlands, primarily for medical devices. The company press release said that from there it can make next-day deliveries to 96% of the 16,000 hospitals in Europe. TNT Express has an extensive ground network and operates its own airline fleet, but that will need to be divested under FedEx ownership. TNT Express has had a PharmaSafe service for years, offering packaging, handling and delivery of pharma shipments, with real-time tracking of location and temperature (for cold chain shipments). It also has employed va-Q-tainer unit-load devices for pallet-scale, temperature-controlled air freight. In December, TNT Express announced an enhanced clinical-trial logistics service in Asia, TNT TrialDaT, for shipment tracking.

The deal is expected to close in early 2016.