UPS to Manage Most of Merck's United States Distribution

Atlanta, January 06, 2009

UPS (NYSE:UPS) today announced it has been selected by Merck & Co., Inc. to manage a significant portion of its U.S. distribution of pharmaceuticals and vaccines as well as to provide package transportation services.

Through its subsidiary UPS Supply Chain Solutions, UPS has assumed control of two key Merck distribution centers, which provide Merck with temperature-sensitive storage, packaging and transportation services critical to its pharmaceutical and vaccine products.

The majority of Merck's U.S. vaccines and pharmaceutical volume flow through these two centers located in suburban Atlanta, Ga. and Reno, Nev.

The two U.S. facilities are cGMP-compliant and add more than 200,000 square feet of secure, automated healthcare logistics space to UPS's network. They join UPS's 23 existing compliant healthcare facilities in North America, and two soon-to-open healthcare facilities in Puerto Rico and The Netherlands. In total, UPS will have more than 3.5 million square feet of dedicated healthcare space globally.

This transaction allows UPS to leverage the new facilities for other healthcare customers and allows Merck to take advantage of UPS's existing healthcare distribution network. This also will allow Merck to utilize a broad spectrum of UPS services to gain additional supply chain flexibility needed for initiatives such as new product launches. Through this arrangement with UPS, Merck will be able to improve its cost structure while providing enhanced customer service.

In addition to shipping expertise, UPS services that now will be available to Merck include storage, warehousing, order fulfillment and shipping of pharmaceuticals and vaccines. UPS will assume responsibility for the movement of all package volume for product to the U.S. market.

"Our latest initiative with Merck marks the next step in our relationship to meet this customer's evolving needs," said Bill Hook, UPS vice president of global strategy, healthcare logistics. "UPS has invested heavily to provide healthcare customers such key advantages as integrated supply chain solutions combining multiple modes of transportation, plus dedicated healthcare facilities that help them speed new products to market, navigate regulatory compliance and respond to evolving industry demands."