UPS and FedEx expand pharmaceutical shipping
channels to global market
In pursuit of a growing share of the lucrative pharmaceutical delivery market, U.S.-based parcel carriers are expanding their
specialty services for clinical trials and drug
research into a growing array of countries.
Pharmaceutical companies have traditionally run their drug trials in the U.S.,
using strict Food and Drug Administration
(FDA) regulations as a proxy for global
regulatory approval, but the industry is
preparing for much greater growth in international markets.
The allure of high profits from international express shipments was one factor
behind FedEx Corp.’s $4.8 billion acquisition of the Dutch delivery firm TNT
Express LLC. The transaction, which closed
in May, allowed Memphis, Tenn.-based
FedEx to complement its worldwide airfreight network with European ground parcel transportation capabilities.
More recently, Atlanta-based UPS Inc.
said it would expand its capabilities to provide temperature control, precision parcel
tracking, and other specialized services for
international shipments of pharmaceuticals
and biological specimens.
Both companies are in pursuit of a large
stream of revenue driven by the burgeoning global medical market. The U.S. pharmaceutical market will increase from an
estimated value of $395.2 billion in 2014 to
$548.4 billion by 2020, according to consulting firm GlobalData PLC. The numbers
are even greater worldwide, with global
pharmaceutical sales on track to soar from
$1 trillion in 2014 to $1.3 trillion by 2018,
according to the CMR International 2015
Pharmaceutical R&D Factbook.
Carriers attempting to serve this market
segment face a tough challenge, experts
say. They not only must provide a range of
specialized tracking, cooling, and import/
export services, but they must do it across
multiple geographies and different dialects.
Yet the potential rewards may make it worth
the trouble. The international drug market
is swelling rapidly to accommodate the 20
million to 30 million Americans
who have recently become insured
under the Affordable Care Act and,
more broadly, the growing medical
needs of an aging global population.
“This is a very lucrative area;
you’re moving high-priced goods,
so there are a lot of value-adds and
special services required. It pays a
lot better than moving candy and
canned goods,” said industry ana-
lyst Richard D. Armstrong, chair-
man of the research and consulting
firm Armstrong & Associates. “But
if you’re going to stay competitive,
you’re going to have to keep inno-
vative and keep moving.”
UPS has improved its ability to
support clinical-trials research by
building a network of more than 50
dedicated healthcare package-sort-
ing facilities around the globe and
supporting them with a stream-
lined shipping process dedicated
to healthcare parcels, the company
announced in July. The new pro-
cess includes a simplified shipping
website for clinical investigators; a
healthcare control-tower network
to enhance visibility during tran-
sit; and improved package-inter-
cept capabilities, which allow UPS
employees to divert delayed parcels
and add fresh supplies of dry ice so
delicate blood samples or vaccines
don’t spoil. p. 20
