GLOBAL PHARMACEUTICAL LOGISTICS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Global pharmaceutical logistics market is estimated be valued at US$ 99.7 Bn in 2024 and is expected to reach US$ 183 Bn by 2031 growing at a compound annual growth rate (CAGR) of 9.1% during the forecast period of 2024–2031.

Global pharmaceutical logistics market deals with the storage and transportation of pharmaceutical products from the manufacturer to the consumer. There are primarily two types of pharmaceutical products that require careful logistics - cold chain and non-cold chain. Cold chain products such as vaccines and other temperature sensitive drugs require consistent refrigeration during transportation and storage to maintain their efficacy. This makes cold chain logistics quite complex as compared to non-cold chain logistics. However, cold chain logistics allows for delivery of life-saving drugs to all parts of the world.

Non-cold chain products on the other hand do not require refrigeration and are easier to transport and store. They comprise majority of pharmaceuticals such as antibiotics, vitamins, and other general drugs. The advantages of non-cold chain logistics include lower costs, less complexity and ability to reach remote locations without cold storage. However, proper packaging, transportation and storage are still required to maintain integrity, safety, and efficacy of the drugs. Both cold chain and non-cold chain logistics require strict compliance with temperature controls, real-time monitoring and traceability to deliver high-quality medicines to patients while ensuring maximum efficiency of operations for pharmaceutical companies.

Global Pharmaceutical Logistics Market Regional Insights

• North America is expected to be the largest market for pharmaceutical logistics during the forecast period, accounting for over 34.9% of the market share in 2023. The growth of the market in North America is led by the U.S., dominates the global pharmaceutical logistics market. The large size and high per capita healthcare spending of the U.S. market has made it crucial for logistics operations to streamline supply chains and provide reliable distribution networks across the vast geography. Many leading logistics companies have established sophisticated infrastructure and IT systems tailored to meet the stringent regulatory norms for transporting temperature-sensitive drugs. This is helping major pharmaceutical manufacturers to efficiently deliver their products from manufacturing facilities to warehouses and hospitals across the U.S. and Canada.
• The Europe market is expected to be the second-largest market for global pharmaceutical logistics, accounting for over 29.1% of the market share in 2023. The growth of the market is due to the growth of temperature-sensitive drugs and vaccines. According to the recent estimates provided by the European Centre for Disease Prevention and Control (ECDC) indicate that over 50% of new drugs in the (R&D) research and development pipeline require temperature-controlled storage and transport. This is pushing pharmaceutical companies and logistics providers to ramp up their cold chain capabilities across Europe.
• The Asia Pacific market is expected to be the fastest-growing market for global pharmaceutical logistics, with a CAGR of over 21.5% during the forecast period. The growth of the market in Asia Pacific is due to Countries like China, India, Japan, and Australia present tremendous opportunities for pharmaceutical companies as their healthcare sectors expand in sync with economic development. The Active Pharmaceutical Ingredients (API) manufacturing capabilities that many Asia Pacific countries possess are helping establish regional supply networks within Asia as well as with other parts of the world. Logistics providers are investing in specialized vehicle fleets advanced warehousing technologies and trained staff to address the diverse and complex logistical needs of multi-national drug makers in high-growth Asia Pacific export hubs. Cross-border transportation and free trade agreements also promise to streamline pharmaceutical logistics across many Asia Pacific nations, further propelling the market opportunities.

Figure 1. Global Pharmaceutical Logistics Market Share (%), By Region, 2024 

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Analyst View

Global pharmaceutical logistics market is primed for steady growth driven by the increasing demand for pharmaceutical products and the need for reliable logistics networks. Growing chronic disease burdens across major world regions will sustain high volumes of temperature-controlled shipments. However, strict transportation and storage compliance for medications also pose challenges to logistics providers in maintaining quality standards. North America remains the dominant regional market but emerging Asian economies are likely to drive future expansion as their healthcare infrastructures and incomes advance.

Areas facing demographic and epidemiological transitions are projected to witness  elevated transportation and warehousing needs. Meanwhile, advanced logistics technologies for real-time tracking, digital documentation and automated fulfillment are getting adopted to boost efficiency. This could offset rising operating expenses from compliance and labor. The last-mile delivery segment is foreseen to evolve through innovative approaches meeting customer expectations of speed and convenience. Still, a shortage of trained logistics staff may hinder the market's capacity.

Overall, while regulatory vigilance and rising costs impose constraints, innovative supply chain strategies tapping the opportunities in developing healthcare sectors should help logistics players sustain profitable growth. Globalization of clinical trials and cell/gene therapy supply chains also introduce promising prospects. Through insights into evolving sourcing/consumption trends and agile network optimization, industry analysts can help stakeholders proactively address challenges and maximize

Global Pharmaceutical Logistics Market Drivers:

• Growing need for cold chain distribution of temperature sensitive pharmaceutical products: One of the major drivers propelling the growth of the pharmaceutical logistics market is the growing need for cold chain distribution of temperature sensitive pharmaceutical products. A significant portion of pharmaceutical products such as vaccines, insulin, biologics, and other injectable require temperature-controlled transportation and storage to maintain their efficacy and safety. With the increasing availability of such thermo labile drugs and biologics, cold chain logistics plays a vital role in ensuring their quality and integrity from the manufacturing site to the point of administration. Pharmaceutical companies are actively investing in specialized transportation equipment, temperature monitoring devices, and cold storage warehouses to effectively manage cold chain operations. Government regulations also mandate strict adherence to cold chain protocols for temperature sensitive drugs. This growing emphasis on cold chain logistics from both industry and regulatory bodies is positively impacting the demand for pharmaceutical logistics services.
• Emergence of temperature-sensitive pharmaceuticals: Rise in medicines that require temperature-controlled supply chains have become a major driver for the pharmaceutical logistics industry. Strict regulations mandate ensures that temperature sensitive drugs be shipped and stored under carefully monitored conditions to preserve their efficacy. Any excursion from the required temperature range could potentially render the drugs ineffective or even unsafe for consumption. The categories of drugs vulnerable to temperature variations include biologics, biosimilars, vaccines, and other specialty medications. With the increasing use of biologics for treating complex diseases like cancer, demand for associated logistics services ensuring thermal protections at each supply chain stage has witnessed tremendous growth. Advanced internet-of-things (IoT)-enabled cold chain infrastructure has become indispensable for seamlessly transporting these fragile drugs between manufacturing sites, distribution centers, hospitals and pharmacies. Unique packaging solutions, real-time temperature tracking technologies and specialized fleet management optimized for sensitive cargo is presently in high use. At the same time, risk of temperature excursions during shipping cannot be undermined considering other environmental factors and human errors. This necessitates robust quality assurance processes and corrective measures if any divergences are flagged during transport.

Global Pharmaceutical Logistics Market Opportunities:

• Increasing globalization of clinical trials and manufacturing operations: Pharmaceutical companies are expanding their research and development (R&D) footprints and sourcing operations to low-cost regions in Asia, Latin America, and Eastern Europe. This necessitates effective coordination between international sites for transporting raw materials, investigational products, and documents. It also involves proper packaging, labeling, and delivery of clinical trial supplies and samples within required temperatures ranges. Moreover, the growing volumes of imports and exports of finished drug products between manufacturing and market regions are generating high demand for cross-border logistics capabilities. Pharmaceutical logistics providers are thus enhancing their distribution networks, customs-clearance support, and temperature-controlled transportation infrastructure to capitalize on this trend of global clinical and manufacturing operations.
• Advancements in packaging solutions: Advancements in packaging solutions can unlock tremendous opportunities in the global pharmaceutical logistics market in the near future. Pharmaceutical products are highly sensitive and require specialized packaging to ensure their safety and quality during transportation from manufacturing facilities to patients. Traditional packaging methods often face challenges in maintaining optimum temperatures, humidity levels and preventing damage, pilferage, and contamination. This is where new packaging technologies can make a defining impact. Innovative smart and active packaging solutions that leverage digital solutions, sensors and real-time tracking are being increasingly used. These smart packages are embedded with sensors, data loggers, and communication capabilities to monitor internal and external conditions like temperature, humidity, light exposure, tilt, and vibration during transit. They alert concerned stakeholders in case of any deviations via internet connectivity. This allows for timely corrective measures and avoids costly product spoilage. Such smart packaging powered by IoT holds immense potential for temperature sensitive drugs, vaccines and biologics. According to the World Health Organization, vaccine waste due to broken cold chain was approximately 50% in low and middle income countries in 2021. Adoption of smart packaging can significantly boost efficacy of vaccination programs in these regions.

Global Pharmaceutical Logistics Market Trends:

• Sustainability initiatives in logistics operations: Sustainability initiatives in logistics operations are increasingly influencing the global pharmaceutical logistics market. Pharmaceutical companies and logistics providers are placing greater emphasis on reducing their environmental footprint and operating in a more socially responsible manner. This focus on sustainability is being driven by pressures from regulators, investors, and customers. Companies are implementing various initiatives to enhance the sustainability of their logistics networks and operations. For example, many are transitioning their fleets to electric or hybrid vehicles to lower emissions from transportation. Pharmaceutical giant Pfizer Inc., a pharmaceutical company announced in 2021 that it aims to achieve net-zero logistics emissions by 2030, in part by electrifying 30% of its owned and contracted fleet. They are also partnering with logistics providers that are committed in utilizing renewable energy for warehousing and distribution facilities. Furthermore, logistics networks are being optimized through investment in digitization and automation technologies. This allows for more efficient routing and delivery of medicines while reducing waste

Global Pharmaceutical Logistics Market Restraint:

• Complex regulatory guidelines: One major restraint affecting the pharmaceutical logistics market globally is the presence of complex and stringent regulatory guidelines that shippers must adhere to. The logistics of pharmaceutical products is heavily regulated due to safety and quality requirements. Regulations cover all aspects of the supply chain from good distribution practices (GDP) to storage conditions, transportation qualifications, and shipment documentation. Even minor non-compliance can lead to huge financial and legal consequences like regulatory actions, delays in clearance, or returns. Complying with multi-jurisdictional regulations also increases operational expenses. The lack of harmonization across regions regarding coding, packaging, and labeling standards further compound regulatory issues. Ensuring adherence to this robust regulatory framework requires significant investments of time and resources which acts as a challenge, particularly for small logistics firms.
• Shortage of trained workforce: Another key restraint for the pharmaceutical logistics industry is the current shortage of trained personnel with necessary expertise. Pharmaceutical logistics is a specialized field necessitating a thorough understanding of compliance practices, shipment processes, storage guidelines, track and trace systems and handling of temperature-sensitive drugs. However, there is a lack of a qualified talent pool trained in nuances of these operations. Retaining existing staff and attracting new recruits also poses difficulties due to stressful work, shift requirements, and competitive job market. This skills gap and high employee turnover negatively impacts service quality and increases dependency on expensive third-party staffing. Pharmaceutical logistics players are investing heavily in training programs but the workforce challenge continues to hamper overall growth and efficiency of operations.

Counterbalance: To counterbalance this restraint, the key market players in the pharmaceutical market need to heavily invest in training programs to educated the personnel on using the intricacies of handling sensitive drugs and thus develop qualified and efficient trained personnel in the process.

Recent Developments

In March 2023, Dentons, global law firm advised transport and GEODIS, logistics company on the acquisition of logistics service provider trans-o-flex, which specializes in the temperature-controlled transport of pharmaceutical and high-tech products. With the takeover, GEODIS wants to further expand its integrated freight network in Germany.

In 2022, MTC Logistics, a leading provider of cold chain services, was acquired by Lineage Logistics LLC, the world's largest and most innovative temperature-controlled industrial REIT and logistics services provider. The addition of these facilities would expand Lineage Logistics LLC, 's  footprint, which already includes more than 400 carefully placed facilities with a total capacity of more than 2 billion cubic feet in 19 countries.

Figure 2. Global Pharmaceutical Logistics Market Share (%), By Service Type, 2024

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Top Companies in Global Pharmaceutical Logistics Market

• Maersk
• United Parcel Service of America, Inc.
• AWL India Private Limited
• DHL Group
• Kuehne+Nagel
• DB Schenker
• CEVA Logistics
• SLB Performance
• YUSEN LOGISTICS CO., LTD.
• NextPharma Logistics GmbH
• Skandi
• Movianto
• Continental Carriers
• Varuna Group
• Sugamgroup
• V-Xpress
• Avvashya CCI Logistics Private Limited
• Agility
• Cencora, Inc.

Definition: Pharmaceutical logistics constitutes a critical sector within the supply chain that deals with the procurement, storage, and distribution of pharmaceutical products, including medications, medical devices, and other related products.