UPS turns solid 1Q, buys European healthcare firm

   UPS has acquired Budapest-based pharmaceutical logistics firm CEMELOG, a move that will help expand the integrator’s growing healthcare arm, for an undisclosed amount.
   Officials expect to close the deal in the second quarter.
   The 14-year-old European company boasts a number of large healthcare brands as clients and will help UPS gain a foothold in Central and Eastern Europe, according to a UPS release. The acquisition adds three distribution facilities, for a total of 255,000 square feet, to UPS’ European network.
   “This acquisition is a continuation of our ongoing growth strategy across our business units and allows us to create innovative solutions for our customers that leverage UPS’s global network,” said UPS Chief Executive Officer Scott Davis in a statement. “It will position us well to meet the needs of healthcare companies in a key geographic location as they strive to regionalize logistics operations as a way to increase efficiencies.”
   UPS opened three dedicated healthcare facilities in Asia in late 2012 and expanded five North American facilities earlier this year.
   In the first quarter, UPS’ domestic package volume rose by 4.4 percent on the strength of e-commerce and strong post-holiday sales, leading to a first-quarter domestic package revenue of $8.27 billion, a year-over-year rise of $267 million. UPS ground saw a 5-percent increase in daily package deliveries, and Next Day Air rose by 1.8 percent. Domestic revenue per piece also increased, inching up by 0.4 percent. 
   Internationally, an 8-percent rise in Asian exports propelled overall daily export volume up 3.8 percent. Europe daily exports were up by 3 percent, with little growth out of the U.S. Export yield, however, declined year-over-year by 2.5 percent due, in part, to lighter-weight products.
   Supply chain and freight revenue also improved in the first quarter, rising 0.9 percent, year over year, to $2.19 billion. Operating profit dropped from $166 million to $143 million because of pressure in the forwarding business coming from Asian overcapacity. Tonnage and yields both declined in the first quarter for the forwarding business. Freight tonnage and shipments-per-day were both up, rising 5.1 percent and 3.6 percent, respectively.
   Though some of UPS’ first-quarter results were mixed, the overall impression given by officials is one of optimism for the rest of 2013. UPS Chief Financial Officer Kurt Kuehn explained though January started strong, the rest of the quarter progressed as expected. He added economic uncertainty remains for the rest of the year.
   Davis saw the results as an overall positive development.
   “UPS demonstrated its ability to consistently deliver results,” he said. “The UPS product portfolio is in-tune with connected and empowered consumers, creating a competitive advantage that positions us well for sustained growth.” – Jon Ross