DHL buys Lufthansa's stake in cold chain joint venture

DHL Global Forwarding has bought out partner Lufthansa Cargo’s share of their cold chain logistics joint venture, LifeConEx, for an undisclosed sum. Deutsche Post DHL said its forwarding unit now had 100% ownership of the US-based cold chain unit, and would integrate it into its own cold chain service.

Lufthansa Cargo said relinquishing its 50% stake in LifeConEx would allow it to focus on airport-to-airport business, but it would continue to work in partnership with DHL’s cold chain unit.

Dr. Andreas Otto, a member of the Lufthansa Executive Board, said: “Lufthansa Cargo aims to further expand the segment for temperature-controlled shipments, amongst other things by developing our international pharma hubs.”

LifeConEx, which was established in 2005 and has its global headquarters in Plantation, Florida, will maintain its neutrality in use of carriers, forwarders and packaging providers, DHL said, and the company’s CEO, David Bang, will remain place.

For LifeConEx customers and employees it will be “business as usual”, although the company will seek to broaden partnerships with different airlines and there will be more integrated and broader service offerings available in future.

The DHL ownership will also mean there will be closer working with other Deutsche Post DHL units.

LifeConEx is also currently working with DHL Express for their cold chain specialty courier business, and with DHL Freight for cold chain road transportation in Europe for a biotech company. LifeConEx is also in discussion with DHL Supply Chain Latin America to expand its partnership Brazil.

LifeConEx is also currently working with DHL Express for their cold chain specialty courier business and with DHL Freight for cold chain road transportation in Europe for a biotech company.  LifeConEx is also in discussion with DHL Supply Chain Latin America to expand its partnership Brazil.

Roger Crook, CEO of DHL Global Forwarding and Freight, said: “After running the innovative specialized logistics service together for six years, DHL Global Forwarding and Lufthansa Cargo agreed that a change in ownership would best prepare LifeConEx to further grow its market position.”

Strengthening demand

DHL’s acquisition comes as the company is building up its life sciences services in the face of strengthening demand from customers in that segment.

Earlier this month, the company issued a white paper charting the growing trend of life sciences companies outsourcing their distribution operations to third-party logistics partners.

As of last month, six of the top 10 global pharmaceutical manufacturers have outsourced at least part of their US distribution operations, the DHL paper stated.

After interviewing life sciences customers the paper stated that one reason for the increasing trend toward outsourced logistics is that the big manufacturers are starting to see patent protection running out on their branded drugs, leaving their in-house distribution infrastructure under-utilised, and supply chain managers looking to more cost-effective means of distribution.

Increasing regulatory requirements around the world on the transport of drugs and medicines has also led to companies preferring to work with external logistics providers, using their regulatory expertise.

There were also various country-specific reasons, while regionally the attraction of the Latin American market for medicines was particularly favourable towards use of third-party logistics providers, DHL said.

Luis Felipe Martinez, DHL Supply Chain’s senior director of operations for the Life Sciences & Healthcare industry, said: “These industry-wide opportunities and risks, combined with unique local factors, are pushing the evolution of supply chain models — now more than ever.”

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