UPS 2013 Annual Report Download - page 15

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3
The health care industry faces complex challenges, including the continuing expiration of drug patents and the shifting
landscape of regulatory requirements and drug pricing controls that differ by country. The recent introduction of the Drug
Quality and Security Act in the U.S., and the earlier passage of new Good Distribution Practice guidelines in Europe, are two
examples of this. To counter these challenges, many pharmaceutical companies have embarked on global expansion strategies
that require infrastructure. UPS has aligned our resources to serve these needs through a well-developed supply chain
management capability that is designed to satisfy regulatory and compliance requirements. Over the past two years, we opened
14 new dedicated health care facilities on four continents. We also expanded our health care network in North America, and are
in the process of expanding our presence in Brazil and Mexico. In total, we currently operate nearly 6.5 million square feet of
dedicated health care distribution space across an integrated network of 42 facilities. These facilities allow us to provide
reliable, secure, cost-effective warehousing and distribution for pharmaceutical firms’ supply chains, which, in turn, allow them
to easily navigate across and within borders.
We also continue to invest in innovative health care focused transportation solutions, including "UPS Temperature True"
and "UPS Proactive Response Secure":
• UPS Temperature True - an air freight solution specifically designed to safeguard temperature-sensitive shipments
using a portfolio of specialized containers with passive, semi-active, or active refrigeration. This service incorporates
monitoring intervention capabilities and provides door-to-door transportation of sensitive products in accordance with
precise, measurable operating procedures. In 2013, UPS expanded its Temperature True offering with two additional
service levels:
1. “Temperature True Standard”, which provides an ideal solution for air freight passive containers requiring
either refrigerated or controlled room temperatures; and
2. “Temperature True Saver”, which is a pioneering temperature-sensitive solution for Ocean Freight shippers.
We also launched UPS Temperature True Packaging to help our small package and freight customers design, validate,
and procure their cold chain packaging.
• UPS Proactive Response Secure - safeguards the most valuable time- and temperature-sensitive items in the supply
chain with contingency plans and financial risk mitigation. In addition to our basic Proactive Response service,
insurance capabilities through UPS Capital are available; this is a unique offering in the marketplace.
We will continue to expand our sector offerings, growing not only our physical and market footprint, but also our
expertise and technologies to support industry-specific needs. Our growth strategy is to increase the number of customers
benefiting from these sector solutions and gain their associated transportation and logistics business.
Logistics Outsourcing
Outsourcing supply chain management is becoming more prevalent, as customers increasingly view professional
management and operation of their supply chains as a strategic advantage. This trend enables companies to focus on what they
do best. We can meet our customers’ needs for outsourced logistics with our global capabilities in customized forwarding,
transportation, warehousing, distribution, delivery and post-sales services. As we move deeper into customers’ supply chains,
we do so with a shared vision on how to best equip our customers with transportation and logistics solutions to better serve
their customers. We integrate our technology for efficiencies, visibility and control to ensure that we execute as promised and to
provide peace of mind for our customers.
Retail e-Commerce Growth
Throughout much of the world, e-commerce growth continues to outpace traditional lines of business. Our integrated
network puts UPS in an ideal position to capitalize on this shift towards residential deliveries. We continue to create new
services, supported by UPS technology, that complement the traditional UPS premium home delivery service to address the
needs of e-commerce shippers and consignees. Our offerings span a broad spectrum that supports retailers across their value
chain, from global sourcing to distribution and returns. We offer cost-sensitive solutions such as UPS SurePost, for shipments
where economy takes precedence over speed, and feature-rich solutions, such as our UPS My Choice service that provides
consignees with revolutionary visibility and control of their inbound shipments.