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UPS Expands US Healthcare Distribution Network

FreightWaves

UPS Inc. (NYSE: UPS) said Monday it will add 1.3 million square feet of U.S. healthcare warehouse and distribution space by the end of 2020, a move that will increase its physical distribution footprint in the segment by more than 30%.

UPS said it has opened a 450,000-square-foot facility near its worldwide air hub in Louisville, Kentucky. It will open a 315,000-square-foot facility in Harrisburg, Pennsylvania, close to a local transport hub and a healthcare operations facility in Swedesboro, New Jersey. It did not state a date for the latter facility's opening.

The company will also expand healthcare warehouse operations in Atlanta; Columbus, Ohio; Reno, Nevada; and Tracy, California.

In a related development, UPS said its French and German networks received the European Union's Good Distribution Practice (GDP) certification for pharmaceutical shipping in France. The certification demonstrates the networks in the two countries follow proper standards for shipping pharmaceuticals, diagnostic products (including re-agents) and stable blood products.

EU guidelines describe the conditions a wholesale distributor must meet to ensure the quality and integrity of medicines throughout the supply chain.

UPS, which has always been a major player in healthcare logistics, has ramped up efforts in recent months to develop more "higher-quality" revenue. It has launched a nationwide drone company focusing on deliveries to hospitals and consumers through relationships with large partners. It has formed a business unit dedicated to the segment and is redesigning its facility network with Internet of Things systems to more effectively track healthcare packages.

Health care can command sizable price premiums over other verticals because it requires specialized handling, has highly time-sensitive delivery requirements and is populated with high-value products.

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