DHL Group’s contract logistics arm has tentatively agreed to acquire Tampa, Florida-based SDS Rx, a provider of specialized final-mile delivery to medical establishments, as part of the company’s strategic focus on building capabilities in the high-margin healthcare logistics.
SDS Rx provides delivery services for long-term care facilities, hospitals, laboratories, drug distributors, specialty pharmacies and nuclear pharmacies. SDS Rx operations will be integrated into DHL Supply Chain’s North American Life Science & Healthcare business, and will continue to operate under local leadership, DHL said in a news release on Tuesday.
The life sciences and healthcare sector is projected to grow 11% per year through 2030, pulling along the logistics market that supports it. Next year, the healthcare logistics market is estimated to reach $152 billion next year, up from $130 billion in 2023 as an aging global population needs more drugs and biological medical products to deal with chronic disease, say industry experts.
Specialty pharmacy firms account for about 50% of total prescription drug spending in the U.S. and the number of patients served by specialty pharmacies grew by 12% between 2018 and 2022, according to market research platform Gitnux.
It is the second healthcare transaction for DHL Supply Chain this year following the acquisition of Nashville, Tennessee-based CryoPDP, a white-glove courier service with operations in 15 countries that focuses on clinical trials, biopharma, and cell and gene therapies with cold chain requirements.
SDS Rx, formally known as Strategic Delivery Solutions, supports healthcare system networks from 200 locations nationwide. The combination with DHL will enable SDS to scale its business to meet increased demand for time-sensitive specialty pharma transportation, while DHL will be able to support a wider range of healthcare customers, DHL said.
In April, DHL Group said it planned to invest $2.2 billion to upgrade its logistics portfolio in the life sciences and healthcare sector, with half the money earmarked to the Americas. The investment is part of DHL’s recent strategy to double health care logistics revenue to $10.8 billion by 2030, with an extensive temperature-controlled network, first- and last-mile specialty courier coverage, and integrated service offerings.
“The increasing demand for specialty pharma and healthcare solutions presents significant opportunities for DHL to leverage its scale, expertise, and commitment to operational excellence. With this acquisition, we are expanding our healthcare logistics capabilities, attracting a new segment of healthcare customers, and reinforcing our position as a trusted partner in building resilient and connected healthcare supply chains,” said Mark Kunar, CEO of DHL Supply Chain North America, in the announcement.
Terms of the deal were not disclosed.
Integrated logistics competitors FedEx and UPS have also focused on healthcare logistics as major profit centers.
In January acquired Frigo-Trans and sister company BPL, which provide temperature-controlled warehousing and transportation in Europe for pharmaceutical and biotech companies.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
Write to Eric Kulisch at ekulisch@freightwaves.com.
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