UPS adds 27 cold transfer facilities for pharmaceutical shipping

The fast-growing popularity of advanced therapies, such as cell and gene treatments, mRNA vaccines and GLP-1 weight-loss drugs, has increased demand for precision cold-chain services. Next-generation medicines have a much higher value and have much less tolerance for shipping errors, say UPS officials. With so much at stake, the best practice in healthcare logistics is toward fewer handoffs, more integrated networks and greater door-to-door accountability. 

Demand for temperature-sensitive biologics is projected to expand at an 8.3% compound annual growth rate through 2033, reaching an estimated $39.1 billion, according to Growth Market Reports. Temperature deviations from defined parameters are a major concern for drug makers, with cold-chain failures costing up to $35 billion per year and contributing up to 50% of global vaccine waste, the World Health Organization estimates. 

“What’s new here is greater network integration across air and ground flows, more control at handoff points, historically a major risk area, and faster, more consistent movement of temperature-sensitive freight,” said Kiel Harkness, vice president of healthcare strategy, in an email. “It’s about closing gaps in how the network operates for complex healthcare shipments.  Every time a shipment changes hands or modes, there’s potential for delays, temperature excursions and loss of visibility.” 

Each shipment moving through a cross-dock is continually monitored with sensors, allowing staff members to quickly intervene if there are signs of temperature changes. 

Healthcare focus

As demand for traditional, low-yield parcel delivery slows and profit margins erode, UPS has targeted healthcare logistics as a primary avenue of growth because pharmaceutical and life sciences companies are willing to pay a premium for complex services required to maintain ultra-sensitive medicines and biologics at optimum temperature throughout their supply chain journey.

UPS began expanding its healthcare unit before the Covid pandemic and has since invested heavily in cold-chain distribution facilities, packaging and transport for handling goods with strict temperature requirements, ranging from 35.6 degrees to 46.4 degrees Fahrenheit, 59 to 77 degrees Fahrenheit and frozen. 

In November, UPS completed the $1.6 billion acquisition of Andlauer Healthcare Group, a large provider of logistics and temperature-controlled transportation in Canada. It acquired Italian healthcare logistics provider Bomi Group in 2022 and two German-based temperature-controlled logistics providers — Frigo-Trans and BPL — in January 2025. The recently expanded UPS air cargo terminal at Incheon airport in Seoul, South Korea, includes a temperature-controlled facility to support pharmaceutical and perishable food customers.

Two years ago, UPS said it planned to double revenue in healthcare logistics to $20 billion through organic growth and acquisitions by the end of 2026. The company recently topped $3 billion in healthcare revenue for a quarter for the first time, management said during the first-quarter earnings presentation on April 28.

Integrated logistics rivals FedEx and DHL are also aggressively competing for healthcare business.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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