UPS Invests US$48m Into Cold-Chain for Pharma Supply Chains

For global logistics organisations, having a strong and reliable cold chain operation is vital when demonstrating its abilities to meet consumer demand.

Cold chains are a necessity for vital operations, such as healthcare and pharmaceuticals. As a result, UPS is working to support global medical needs with an improved strategy.

Pharmaceuticals and other healthcare products need to be carefully temperature controlled in order to avoid spoilage and to arrive to the intended destination on time. UPS's investment shows a commitment to ensuring treatments can be carefully transported by the company.

Cold chain logistics

UPS is a leading provider of complex healthcare logistics, using its global network and experts in the field to safely and securely deliver vital products around the world. It is one of the largest companies, providing a range of integrated logistics solutions for customers across more than 200 countries and territories. 

Its healthcare branch ensures thorough healthcare logistics expertise can reach its global customers, making use of more than 19.2 million square feet of cGMP and GDP-compliant healthcare distribution space around the world. This includes inventory management, cold chain packaging and shipping, storage and fulfilment of medical devices, as well as lab and clinical trial logistics. 

Now, it is extending its capabilities with a US$48m investment into temperature-controlled freight cross-dock facilities. The investment is focusing on 27 facilities, located in key markets across Europe, Asia and the Americas. Through these, there will be a greater optimisation of speed and short-term storage across air and ground movements. 

This will all be contained within specifically controlled temperature requirements, strengthening the company's global cold chain network and helping meet demand. Medicines are expected to maintain a strict range of two to eight degrees Celsius, frozen capabilities, or 15 to 25 degrees Celsius. As a result of these further investments, UPS can ensure it will meet the varying demands with efficiency. 

According to Growth Market Reports, industry demand for temperature-sensitive biologics is anticipated to grow to US$39.1bn through 2033. Leading companies need to be able to meet demand and ensure products remain safe throughout the manufacturer-patient journey. 

“We have aligned our investments with our Healthcare customers’ specialised needs. Our global cross-dock facilities strengthen our end-to-end cold-chain capabilities to ensure critical treatments are delivered safely and reliably to patients around the world,” said Kate Gutmann, EVP and President of International, Healthcare and Supply Chain Solutions at UPS.

“This effort – and all of our work in healthcare logistics – extends from a deep understanding that we’re doing more than moving packages. We are helping patients access the medications and treatments they need.”

Meeting changing demands

As more innovative therapies are coming to market with new scientific breakthroughs, supply chains are facing even greater complexity than before. Cell and gene treatments, mRNA platforms and GLP-1 injectables are becoming more available in the market, but they have increasingly complex needs. The main worry is a failure to ensure temperature control – failures of such have an estimated annual cost of up to US$35bn. According to the World Health Organisation, temperature failures contribute towards up to 50% of global vaccine waste. 

An increasing number of drugs are requiring careful logistics planning. PharmaSource states that approximately one in three newly approved drugs is a biologic – created from living cells – and more than 85% of them require temperature-controlled handling as a result. 

"Biologics and personalised treatments are driving better, more targeted care for patients," adds John Bolla, President of UPS Healthcare.

"These investments reflect our commitment to strengthening our end-to-end supply chain that helps protect innovative treatments and diagnostics, supporting better patient outcomes."

The risk of mishandling comes from a fragmented network or increased handoffs. By using a single, integrated network, the risk is significantly reduced. UPS offers customers more accountability and real-time oversight for each shipment, meaning products are much more controlled. It makes use of a 24/7/365 control tower, which monitors shipments, looks out for risks and support intervention to ensure the products remain moving at all times. 

The investment and subsequent expansion builds on UPS's ongoing commitment towards healthcare logistics, with acquisitions of Bomi Group, Frigo Trans and BPL throughout Europe, as well as Andlauer Healthcare Group in North America. It has also expanded its Incheon, Korea air hub, making pharmaceutical trade flows much more efficient.