UPS Inc. (NYSE:UPS) said Monday that it has consolidated all its cold-chain logistics and delivery services into a dedicated global operation that falls under the Atlanta-based company’s UPS Healthcare umbrella.
The operation, called UPS Cold Chain Solutions, will more than double the company’s worldwide freezer storage capacity to 1 million square feet, and in particular expand the size of UPS’ European cold chain network, including a new facility in Italy. Dan Gagnon, UPS Healthcare’s vice president of global health care strategy and marketing, said UPS will broaden relationships with airlines with proven pharmaceutical delivery capabilities, as well as continue using its own freighter fleet.
Gagnon said UPS will also use more less-than-container load (LCL) ocean services to move specialized containers that don’t require the immediate urgency that typically justifies the use of airfreight services.
UPS has offered the cold-chain services on a relatively limited and ad hoc basis. However, the COVID-19 pandemic, and UPS’ crucial role in distributing COVID vaccines, convinced the company to establish a dedicated operation to meet what is expected to be a growing worldwide need for biologics and other temperature-controlled drugs to treat a wide range of diseases.
UPS cited data from the Biopharma Cold Chain Sourcebook that forecast 48% growth from 2018 to 2024 for the storage and delivery of drugs maintained at 2 to 8 degrees Celsius, the traditional range for most biologics. The COVID-19 vaccine manufactured by Pfizer Inc. (NYSE:PFE) needs to be kept at around minus 70 degrees. A comparable vaccine produced by Moderna Inc. (NASDAQ:MRNA) can be kept at minus 20 degrees.
Last summer, UPS opened freezer farms in Louisville, Kentucky, the site of its global air hub, and in the Netherlands to accommodate the ultra-cold temperatures. UPS subsequently built another freezer farm in Singapore.
UPS Healthcare operates within the Supply Chain and Freight division, one of UPS’ three main operating divisions.
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