Express logistics providers bet big on health care business

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.