DHL Supply Chain Sets 40-Percent Expansion Of U.S. Life Science, Health Care Footprint

DHL Supply Chain, the contract logistics unit of German firm Deutsche Post DHL Group, said it will add nine U.S. pharmaceutical, biotechnology and medical device distribution sites by the end of the year, a $150 million investment that will boost its domestic presence in the fast-growing life sciences and healthcare vertical to 30 locations.

The DHL unit will enter the Indianapolis, Indiana and Raleigh, North Carolina markets, and add sites in Memphis, Tennessee and south central Pennsylvania. It will also build sites in California and Virginia, the unit said Thursday.

The expansion "helps us leverage differentiated routes to market, driving even greater efficiency and productivity across the supply chain for our customers," said Scott Cubbler, the unit's president of life sciences & healthcare.

Life sciences and healthcare accounts for 10 percent of the unit's North American business and is growing at about 15 percent per year, the unit's fastest growing sector. Over-the-counter products represent 45 percent of the business, followed by pharmaceuticals at 30 percent and medical devices at 25 percent, according to the unit's estimates.

DHL Supply Chain, whose North American headquarters are in Westerville, Ohio, was the world's largest third-party logistics (3PL) provider in 2017 with gross revenues of $27.6 billion, according to data from consultancy Armstrong & Associates, Inc. Gross revenues are revenues before the cost of purchased transportation.

Third party logistics providers like DHL Supply Chain provide transport and logistics support for shipper customers without transport assets of their own. However, there are more than a few asset-based 3PLs operating today. In its calculations, Armstrong combines gross revenues of DHL Supply Chain and DHL Global Forwarding, DHL's air and ocean freight forwarding unit.

Healthcare and life sciences have become big and lucrative businesses for shipping and logistics specialists given the specialized nature of the business and the importance of the products being shipped and the information being communicated.

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