UPS Healthcare Logistics is undergoing a 20% expansion of its facilities

Having undergone a steady stream of expansions up to 2008, one might expect a logistics company to seek to ride out the current turmoil in the world economy and in life sciences in particular. But UPS Healthcare Logistics, a multibillion-dollar/year unit of Big Brown, has announced four new or expanded facilities that will come online during this year, bringing its total dedicated capacity to over 4 million sq. ft.

Bill Hook, UPS Healthcare Logistics VP, says that the expansions are based both on booked business and on an expectation of near-term growth. “We have a robust pipeline of healthcare business,” he says, adding that one of the more recently completed expansions, in the Netherlands, was essentially sold out less than a year after its opening. Another key ingredient in UPS’ optimism: “Life sciences companies are expressing a greater willingness to collaborate with business partners in supply chain management, and they are growing more confident that their partners—especially global ones—can maintain quality and service levels to meet increasing regulatory and business requirements.” On the economics side, UPS Healthcare Logistics promotes the idea that a multitenant facility (handling the warehousing and distribution needs of multiple clients) can be run more cost effectively than a dedicated facility that is subject to the ups and downs of a company or product line.

The new facilities are in:

• Singapore, where a 43,000 sq.-ft. regional facility will handle import/export needs of multiple nations in the region. The facility will have cold-chain storage as well as “postponement” services to allow relabeling of country-specific packaging, so that inventory requirements of the whole region can be met.
• Venlo, Netherlands, where a 245,000 sq.-ft. facility is being opened, following the capacity limits reached at the recently opened Roermond facility. Hook says that UPS business growth in Europe is strong, and includes import/export as well as managing intra-Europe distribution.
• Burlington, ON, where a second facility is being built next to an existing one on the company’s Burlington campus. The facility will be the 10th in Canada, and will have 177,000 sq. ft of capacity.
• Lousiville, KY, where another building is being added to several existing ones surrounding UPS’ Worldport global air hub. That hub allows for air shipment orders to be received as late as 11 pm, as well as UPS ground deliveries within two days or less to 70% of US locations. The new building will have cold chain and vault storage.