UPS Healthcare Logistics and Merck expand their innovative distribution agreement

Pharmaceutical CommercePharmaceutical Commerce - July/August 2011

Big Brown will handle warehousing and transportation globally, on a non-exclusive basis

In late 2009, UPS and Merck shook up the pharma logistics business by forging an unusually close business relationship: UPS would take over two of Merck’s North American distribution centers (DCs)—including hiring their staffs—and be responsible for order fulfillment and transportation for the entire region. Now, the two companies have expanded that relationship globally to include “aspects of Merck’s global supply chain around the world . . . UPS will now provide these services in certain markets in Asia and Latin America, including the emerging markets of China and Brazil. UPS also is providing transportation services in Europe,” according to a UPS statement.

Earlier this year, UPS Healthcare Logistics announced an expansion of its worldwide network of DCs, bringing the total to over 4 million sq. ft.; with the Merck agreement, according to Bill Hook, UPS VP, “We will be able to accelerate this expansion, and shorten the timeline of our five-year strategic plan.” UPS services include temperature-controlled distribution, some repackaging and order-to-cash processes. Hook says that the company is in negotiations with several other multinationals to provide comprehensive, collaborative supply-chain services, but “Merck is at the leading edge of this type of partnership.”

"This expanded agreement with UPS allows us to focus on our core business as a global healthcare leader that looks for innovative ways to bring our medicines and vaccines to patients in emerging markets and markets around the world," said Willie A. Deese, executive vice president and president, Merck Manufacturing Division.

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