United Parcel Service Inc. (UPS:US) is expanding its health-care shipping network’s distribution-center space by 15 percent to take advantage of surging demand for prescription drugs and medical supplies.
The additional 800,000 square feet (74,000 square meters) brings UPS’s dedicated health-care distribution space to 6 million square feet globally spread across 37 centers, the Atlanta-based company said today in a statement.
Health care is one of the fastest-growing businesses (UPS:US) for UPS, with revenue jumping more than 20 percent in the fourth quarter, executives said on a Jan. 31 conference call. UPS is relying on rising health-care spending and patient needs for items such as dialysis equipment while a sluggish global economy weighs on demand for other goods such as financial documents.
“We have been able to exceed our growth expectations in this particular segment despite some of the challenges we’re facing in the global economy,” Bill Hook, vice president of global strategy for UPS Healthcare Logistics, said in a telephone interview. “We’re getting very solid growth.”
The new distribution centers are located in UPS’s hometown of Atlanta; its main air hub in Louisville, Kentucky; Reno, Nevada; Mira Loma, California; and Burlington, Ontario. All have temperature-controlled space and secure areas for handling controlled prescription drugs, Hook said.
Hook declined to say how much the world’s largest package- delivery company is investing in the new facilities. The company (UPS:US) is planning “more than a handful” of additional sites in the next 18 months as it broadens health-care offerings in Latin America, Europe and Asia, he said.
UPS rose (UPS:US) 1.1 percent to $80.80 at the close of New York trading. The shares have increased 9.6 percent this year.
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