The big three integrated parcel and logistics carriers are aggressively targeting the high-margin health care vertical as a profit center, with DHL on Monday announcing a $2.2 billion investment over five years and FedEx expecting to capture $400 million in business from new health care customers.
Not to be outdone, UPS (NYSE: UPS) in January acquired Frigo-Trans and sister company BPL, which provide temperature-controlled warehousing and transportation in Europe for pharmaceutical and biotech companies.
The companies are interested in health care because the high technical and compliance requirements allow for lucrative value-added services beyond basic parcel transportation. The health care 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, according to industry experts.
DHL Group (DXE: DHL) on Monday said it planned to invest $2.2 billion to upgrade logistics capabilities and footprint in the life sciences and health care sector. Half of capital expenditures will be allocated to the Americas, with the balance split between Asia-Pacific and the Europe, Middle East and Africa region.
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. Last week, DHL agreed to acquire Nashville, Tennessee-based CryoPDP, a specialty courier that provides logistics services for clinical trials, biopharma, and cell and gene therapies, for $195 million.
Investments will concentrate on improving infrastructure and technology from factory to patient, including temperature-controlled storage, order fulfillment, distribution, global shipping and last-mile delivery. DHL said the enhancements will allow it to deliver integrated health care solutions, while improving delivery speed and reliability for pharmaceutical, biopharma and medical device customers, as well as patients.
DHL, headquartered in Bonn, Germany, recently created DHL Health Logistics to serve as an umbrella brand for end-to-end capabilities available across the DHL Express, Global Forwarding and Supply Chain divisions. Life sciences and health care contributed more than 5 billion euros ($5.4 billion) in revenue to the group in 2024.
A significant part of the investment will be budgeted for new cross-divisional pharma hubs for transporting multitemperature shipments, expanding cold chain capacity in existing facilities, ordering new temperature-controlled vehicles and enhancing insulated and refrigerated containers, DHL said.
