UPS’ latest acquisition reflects increasing interest for European acquisitions

Right on the heels of two acquisitions by FedEx, UPS announced an impressive acquisition of their own last week (12/18/2014). The company purchased Polish pharmaceutical logistics company Poltraf Sp. z o.o.

According to the announcement, the acquisition will add three facilities and ten field stocking locations across Poland. Also, UPS will gain about 170 temperature-controlled vehicles for the transportation of both 2-8°C refrigerated and 15-25°C products. These vehicles provide a GPS and temperature-monitoring system.

“This acquisition brings greater capability to our global healthcare network,” said Cindy Miller, president, UPS Europe. “Poltraf complements our mainland Europe expansion plan and we are now able to provide healthcare companies access to a single source for logistics solutions across the continent, helping to achieve greater supply chain efficiencies and compliance with relevant guidelines.”

And this is what makes this acquisition impressive – the ability “to provide healthcare companies access to a single source for logistics solutions across the continent”. Since 2011, UPS has acquired specialized, niche healthcare logistics providers in the UK (Polar Speed), Hungary (CEMELOG) and in Italy (Pieffe).

However, as with any acquisition, UPS will need to be mindful of properly integrating this latest acquisition into its fold. For example, each of its healthcare acquisitions has brought such unique IT service offerings as tracking, monitoring and warehouse/inventory management. How it chooses to integrate these and other aspects of its acquisition will help determine its success.

Increasing regulations, expansion of manufacturing facilities, a more willingness to outsource within Europe and growing demand in Central and Eastern Europe are among the reasons for interest in the European healthcare logistics market.

In addition to a pan-European healthcare logistics offering, this latest acquisition may also be beneficial for any plans UPS may have for its multimodal transportation service connecting Asia to Europe. This service, announced in June, includes a rail service from Chengdu, China, to Lodz, Poland, and one from Zhengzhou, China, to Hamburg, Germany.

DHL Global Forwarding, which also operates a multimodal service between China and Europe, launched a temperature-controlled railcar service earlier this year that can keep products with a specified range between -25 and +25°C. The containers are individually powered, and designed to fit into normal train schedules. Customers can monitor and modify temperatures remotely and track the shipment through DHL’s communications systems.

Certainly a possibility for UPS and one it could also expand into other verticals such as consumer goods and high-tech.

Healthcare logistics and alternative trade patterns between Asia and Europe are among the trends cited in Ti’s recent report, European Logistics: Mergers and Acquisitions 2014. For additional information on this latest report, please click here for a description of it.

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