Within a matter of two years, UPS has acquired its second European healthcare logistics company. With both acquisitions, UPS has acquired additional dedicated healthcare warehousing space that now totals over 6m sq. ft in Europe alone.
Indeed, Ti estimated Europe’s pharmaceutical logistics market was the third largest in 2011, behind North America and Asia Pacific (excluding Japan and China). As patent expirations and European healthcare reforms continue to rise, many drug manufacturers are retooling their operations as many face financial pressures in this region. These changes, among others, within the European healthcare industry have resulted in opportunities for logistics providers as healthcare providers outsource non-core services such as transportation and logistics services.
UPS’ 2011 acquisition Pieffe Group along with its recent acquisition of Cemelog brought a combined five specialized warehouses located in Italy and Hungary into UPS’ fold. These facilities are industry-compliant, offering various temperature-controlled areas along with value-added services including re/packaging, light manufacturing, labeling and controlled substances distribution. According to Cemelog’s website, the company also handles marketing materials, medical devices, consumer goods and more. Also, it handles veterinary products for not only the Hungarian market but for neighboring countries. In fact, Cemelog distributes additional goods throughout Eastern Europe, a big plus for UPS.
The Pieffe Group and Cemelog acquisitions have also allowed UPS to extend services to its existing life sciences customer, Merck, as well as possibly extend services to other life sciences companies that rely on other UPS solutions such as Bayer AG, Pfizer and GlaxoSmithKline.
Still, UPS is competing in a crowded field of logistics providers. So far this year, a number of European life science logistics activities have occurred. For example, Menlo Worldwide Logistics gained a contract from Physio Control. Menlo will utilize its multi-user facility in Maastricht, Netherlands to manage and stage Physio Control's inbound inventory for Europe, coming mostly from the US. At the Maastricht Logistics Center Menlo will then carry-out light assembly work, managing warehouse services and fulfill orders for delivery throughout Europe.
Norbert Dentressangle was recently awarded a major chemicals warehousing contract with Ecolab. Its COMAH Euroterminal site at Trafford Park in Manchester will act as a national hub for the storage and distribution of Ecolab products throughout the UK. In fact, the company made a financial investment to extend and upgrade the Euroterminal site, including a new MHRA licensed area for the storage of up to 6,000 pallets of medical and pharmaceutical products.
And finally, in March, DHL Global Freight Forwarding opened a new Life Science and Health Center in Barcelona, Spain. The facility covers 1,000 sq. m. and will provide services for the industry in Spain and Southern Europe.
Although the European life sciences logistics market is crowded, there are quite a few opportunities available. As contract wins continue for many, others continue to build out specialized logistics networks whether organically, through acquisitions or a combination of both.