Logistics companies make money by moving packages. However, nowadays, more and more of those packages need to stay cold the entire way, and that’s becoming a real business opportunity for United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX).
Why This Is Happening Now
The reason is simple, and that is more people are taking medications that spoil if they get too warm. Ozempic, Wegovy, Mounjaro, and Zepbound, the popular GLP-1 weight-loss and diabetes drugs, all need refrigerated shipping. A Gallup poll from July found that 11% of Americans took a GLP-1 drug for weight loss in 2026, up from just 3% in 2024. A separate, broader estimate from KFF found that about one in eight adults had used a GLP-1 for any reason, including diabetes, as of late 2025. Either way, demand is climbing fast. The Food and Drug Administration has warned that these drugs lose their effectiveness if they arrive “warm or with insufficient refrigeration.” The World Health Organization says temperature problems already cause half of all vaccine waste worldwide, costing $35 billion a year. Starting this month, Medicare is also making some GLP-1 prescriptions available for $50 a month under a new government program, which should push demand even higher.
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United Parcel Service, Inc. (NYSE:UPS): A Fast-Growing Piece of a Bigger Strategy
United Parcel Service, Inc. (NYSE:UPS) has been building this business for years. Healthcare revenue has gained market share every year since 2021, and the company posted its first-ever $3 billion healthcare revenue quarter earlier this year. In June, UPS announced a new $48 million investment in 27 temperature-controlled facilities aiming to capture more of a temperature-sensitive biologics market that research firm Growth Market Reports expects to grow to about $39.1 billion by 2033. UPS has also been buying its way into the space, acquiring European cold-chain firms Frigo-Trans and BPL in January, following its $1.6 billion purchase of Andlauer Healthcare Group late last year. Tomé told Reuters in April, “I would argue that healthcare is pretty recession-proof.” That’s the real appeal here. Package volumes can slow down when the economy weakens, but people don’t stop needing their medications.
UPS hasn’t reported its next earnings yet, but Wall Street is already leaning positive. Bernstein and Citi both raised their price targets on UPS this month to $133 and $132, respectively, noting tighter shipping capacity and improving demand across the transport market.
FedEx Corporation (NYSE:FDX): A Real Beat, Clouded by a Recent Spinoff
FedEx Corporation (NYSE:FDX) is chasing the same opportunity, launching a dedicated life sciences unit this month to serve pharmaceutical customers, and its healthcare transportation revenue reached nearly $10 billion in the fiscal year that just ended. FedEx’s president of healthcare, Nick Gennari, told CNBC the company is “ideally positioned” for the added complexity that comes with shipping GLP-1s in multiple forms, from injectables to pills, direct to consumers.
Unlike UPS, FedEx has already reported its most recent results, and it shows that it isn’t only healthcare that’s shaping the stock right now. Revenue for FY2026 rose 12.6% to $25 billion, beating estimates, and adjusted profit came in at $6.31 a share compared to the $5.96 expected. However, the stock still fell 6-7% because the operating margin in FedEx’s core delivery business dropped to 7.7% from 8.4% a year earlier. Investors are still trying to figure out what the firm looks like after spinning off its trucking unit, FedEx Freight, on June 1. FedEx’s new full-year guidance of $16.90 to $18.10 a share shows only the delivery business going forward, and Reuters reports that analysts don’t yet have models built that let them compare it cleanly to prior years. On top of the spinoff confusion, FedEx is dealing with headwinds that have nothing to do with healthcare: tariffs, the loss of duty-free treatment for low-cost shipments from Chinese retailers like Shein and Temu, and higher fuel costs from the Iran war.
The Real Question
That leaves a real question. Is healthcare logistics becoming a genuine growth engine for these companies, or is it a bright spot getting buried under bigger, messier problems?
For United Parcel Service, Inc. (NYSE:UPS), the case is fairly clean. Healthcare is a real, growing, high-margin business layered on top of a firm that isn’t dealing with a recent corporate breakup or major guidance reset.
For FedEx Corporation (NYSE:FDX), the healthcare story is just as real; nearly $10 billion in revenue is not small, but it’s currently competing for investor attention with margin pressure, tariff exposure, and the aftershocks of the Freight spinoff. Healthcare logistics alone won’t be enough to move FedEx’s stock if the core delivery business keeps losing margin. C.H. Robinson shows there’s real money in this even for a smaller player: the freight broker passed $1 billion in healthcare logistics revenue over the past year, mainly due to GLP-1 growth. However, the company’s VP of North American surface transportation, Ronnie Davis, told CNBC that cold-chain capacity is genuinely limited right now, “not unlimited, it’s constrained.”
Insider Monkey’s Hedge Fund Data Analysis
Insider Monkey’s hedge fund database shows a striking gap between how funds view these two stocks. FedEx Corporation (NYSE:FDX) was held by 86 hedge funds at the end of Q1 2026, up sharply from 68 the quarter before, with the dollar value held nearly doubling from $3.2 billion to $5.3 billion, a real accumulation even before this summer’s spinoff and mixed earnings reaction. UPS moved the opposite way. It was held by 59 funds, down from 67, with dollar value held falling from $1.9 billion to $1.5 billion. C.H. Robinson stayed roughly flat, with 48 funds versus 49 the quarter before.
Conclusion
UPS and FedEx Corporation (NYSE:FDX) are both making good money by shipping cold medicines, especially as popular drugs like GLP-1 weight-loss injections become more widely used. This is a great long-term business for both companies, but it looks much better for United Parcel Service, Inc. (NYSE:UPS) right now because the rest of its business is steady and doing fine. On the other hand, FedEx is struggling with falling profit margins and lingering spinoff confusion, which makes its healthcare success harder to notice. Healthcare logistics looks like a genuine long-term growth opportunity for both firms. Whether it’s enough to matter to the stock depends more on what else is going on at each one right now.
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