Pharmaceutical Logistics Market: Global Industry Analysis and Forecast (2023-2029) by Type, Component, Application, and Region

Pharmaceutical Logistics Market size was valued at USD 88.89 Bn. in 2022 and the total Pharmaceutical Logistics revenue is expected to grow at a CAGR of 9.2% from 2023 to 2029, reaching nearly USD 164.61 Bn.
Pharmaceutical Logistics Market Overview:
Transporting healthcare materials across various modes necessitates the construction of complex logistical systems to ensure pharmaceutical delivery integrity. It demands specialized equipment, storage facilities, defined handling procedures, and, most importantly, strong collaboration among cold chain members. Pharmaceutical companies are increasingly outsourcing packaging and labeling to third-party vendors.

Many pharmaceutical businesses are venturing into previously untapped regions including Sub-Saharan Africa and South America. In this scenario, pharmaceutical companies put significant importance on local logistics providers with substantial pharmaceutical expertise. This factor is expected to boost the demand for the pharmaceutical logistics market during the forecast period. However, with outsourcing operations, decreasing service standards and loss of control are major concerns.

The rising demand for over-the-counter (OTC) medications such as vitamins, minerals, and supplements (VMS), common cough and cold remedies, gastrointestinal pharmaceuticals, and dermatological products are driving the growth of the pharmaceutical logistics industry during the forecast period. The growing necessity of expedited assistance in the healthcare industry is also driving the pharmaceutical logistics industry. Additionally, lowering distribution costs by establishing a single source distribution channel increases demand for pharmaceutical logistics across the end-users and drives the pharmaceutical logistics market revenue.

Many businesses are pursuing mergers and acquisitions in order to increase their geographic presence and specialized information. They are also working to reduce their products' total packaging costs. The biotechnology and pharmaceutical supply chains are especially vulnerable to the hazards of product adulteration during transportation, as well as noncompliance with federal rules, standards, and recommendations. As a result, market participants are actively investing in cutting-edge technologies like telematics and remote monitoring to provide safety and comfort during transportation operations, hence driving the pharmaceutical logistics market growth.

The requirements for pharmaceutical logistics are increasing in the United States as a result of rising generic medicine sales and healthcare changes that favor generics. as a result, the North American pharmaceutical logistics market is expected to generate the highest revenue share during the forecast period. The pharmaceutical logistics industry in North America is highly fragmented, owing to the presence of several regional and multinational players. Because of the existence of numerous local and global corporations, the market is highly competitive.

Organizations aim to provide cloud-based supply chain solutions and secure supply chain activities in order to assist producers in ensuring the authenticity of medications. These methods inhibit the manufacture of counterfeit pharmaceuticals and medical devices. Increased demand for pharmaceutical logistics through sea and air is expected to drive the pharmaceutical logistics industry growth during the forecast period. The shipment of pharmaceutical items by water saves transportation costs by up to 80% while also reducing manpower needs.

The rising demand for pharmaceutical logistics by sea and air is expected to drive industry growth during the forecast period. The transportation of pharmaceutical products by water reduced transportation costs by up to 80% while also reducing manpower needs. Likewise, it reduces the carbon footprint of logistical operations by lowering packaging and storage requirements. The growing usage of air freight logistics for long-distance and intercontinental distribution of important vaccines and pharmaceuticals is expected to drive significant growth in the pharmaceutical logistics market.To know about the Research Methodology :- Request Free Sample Report
Pharmaceutical Logistics Market Dynamics:
Growing pharmaceutical sector around the world

Pharmaceutical companies are increasingly concerned with product quality and sensitivity. Factors such as the creation of advanced biological-based medications and the transfer of hormone therapies, vaccinations, and complex proteins need the use of specialized transportation and storage.

Temperature-controlled transportation of pharmaceuticals and medical devices is a rapidly growing segment of health supply chain management. Besides that, the growing demand for effective cold-chain logistics services to ensure product quality drives the growth of the pharmaceutical logistics market.

Likewise, the pharmaceutical industry's cold chain supply and logistics are becoming more strategic and dependable. For example, the quantity of heat-sensitive healthcare items delivered rose by 45% between 2011 and 2017, and one out of every two healthcare products is shipped via the cold chain. Global sales of biotechnology pharmaceuticals and biological products were expected to reach $500 billion in 2023. These high-value pharmaceutical items are generally supplied via cold chain solutions throughout the whole distribution network, driving pharmaceutical logistics market growth.Increasing demand for temperature-sensitive pharmaceutical drugs

As the pharmaceutical sector progresses, more attention is being placed on cell and gene treatments. As a result, there is a greater demand for more effective and advanced storage solutions. Temperature monitoring is becoming increasingly important in the pharmaceutical and healthcare cold chain sectors, as temperature-sensitive items enter the market. Additionally, the temperature requirement varies depending on the medicinal medication. The major issue driving the demand for cold chain monitoring systems is the degradation of medicine or vaccine life under temperature changes encountered in the supply chain.

For example, DHL Global Forwarding, a subsidiary of the DHL group, announced technology advancements to its life sciences services business in September 2020 to suit the increasing pharma logistics demands. It has released the New LifeTrack user interface, a temperature-controlled cargo tracking platform that provides real-time analytics, digitalized standard operating procedures (SOP) information, and the lane risk assessment tool to its clients.

As a result, an increase in demand for temperature-sensitive pharmaceutical products potentially provides an opportunity for the pharmaceutical logistics industry to grow during the forecast period.

High growth in refrigerated warehouses

Hundreds of cold chain warehouses are being constructed to provide the greatest possible storage and transportation conditions for temperature-sensitive commodities. The critical linkages provided by the cold chain solutions system are critical to a range of export sectors. Security is the weak link in the cold chain; organizations devote millions of dollars to establishing efficient, effective, and trustworthy systems.

A single disturbance in the logistics chain can cause capital losses and catastrophic product failure. Also, the need for cold storage is growing as the number of internet pharmacies grows. As a result, the growth in refrigerated warehouses is driving the pharmaceutical logistics market during the forecast period.

Lack of standardization in pharmaceutical logistics and storage

Pharmaceutical logistics and storage demand originates from a wide range of sources, each with its own set of requirements. The lack of standards and accreditations provides substantial difficulties to the pharmaceutical market, which is now concerned about the quality and flexibility of available warehouse space. In many circumstances, enterprises must pay more to modify the space and its specifications to pharmaceutical industry requirements that support their operations. The policymakers' criteria, as expected, put more pressure on manufacturers.

It is not straightforward to upgrade the facility in terms of temperature compliance or accommodating automated equipment. Training and growing employees in technology and product handling require significant financial expenditure. As a result, the lack of standardization in pharmaceutical logistics is expected to restrict pharmaceutical logistics market growth.

High operational cost of cold chain logistics

The cold chain logistics business uses a significant amount of electricity regularly. Cold chain service companies are finding it harder to minimize their operational expenses as the cost of used energy rises. Additionally, high energy and property investment costs are expected to complicate planning and execution. Thus, the high operating expenses of cold chain logistics provide a significant barrier to the pharmaceutical logistics market's growth throughout the forecast period.
Pharmaceutical Logistics Market Segment Analysis:
Based on Type, the Cold Chain Logistics segment held the largest share of about 72% and dominated the Pharmaceutical Logistics market in 2022. The segment is further expected to grow at a CAGR of xx% during the forecast period. Pharmaceutical cold chain logistics refers to a complicated systematic project in which perishable pharmaceuticals and those needing a low-temperature environment are always gathered in an environment with certain temperature ranges in each phase before being consumed by customers.

Temperature control in cold chain logistics is critical not only for producing high-quality products but also for reducing transit waste and lowering transportation-storage-shipping and marketing expenses. Advances in logistics and transportation have driven the rise of pharmaceutical cold chain logistics, which is based on refrigeration technology, medication, and pharmacology. Pharmaceutical cold chain logistics include nearly the whole transit procedure for vaccines, injections, tinctures, oral pharmaceuticals, treatments for external use, and blood products. These factors drive the segment revenue growth during the forecast period.

Cold chain systems are crucial to the operations of pharmaceutical companies in the United States. Modern retail sales have been rising at a 10 to 15% annual pace internationally, and have attained a 50% market share in most significant emerging nations. Quality and safety are synonymous with American franchise ideals across the world. Franchisees must have dependable and secure ways of transporting items to their retail locations to keep their reputations.

Cold chain services often have extensive vertical coordination with their retail and franchise customers, allowing those customers to assure the quality and safety on which their reputations are founded. As a result, the demand for cold chain logistics is rapidly increasing in the U.S. market.

Besides that, stringent government regulations governing particularly temperature-sensitive pharmaceutical products to be kept at specific temperatures are expected to drive market growth throughout the forecast period. The increasing use of telematics in cold-chain pharmaceutical logistics is assisting businesses in improving the efficiency, connection, and safety of transport commodities.

Most biological and medical goods require a temperature-controlled environment during the manufacture and distribution stages, which aids in the preservation of the medications' effectiveness and purity. As a result, pharmaceutical industries utilize temperature-controlled shipping and cold storage systems.

The non-cold chain logistics segment is expected to grow at a CAGR of about 8.2% for the Pharmaceutical Logistics market during the forecast period. The rising demand for non-cold chain pharmaceutical medications and other goods is expected to be the segment's primary driver of segment growth.
Pharmaceutical Logistics Market Regional Insights:
The global pharmaceutical industry has witnessed a significant transformation in recent years, competition is fiercer than ever and an efficient, quality supply chain is one way to gain and maintain a strategic advantage. Because of the global nature of the pharmaceutical supply chain, it is highly vulnerable to a variety of internal and external risks. Companies must be prepared to overcome the growing challenges of supply chain integrity, product security, and regulatory compliance as supply chain complexity grows.

North America has the largest single pharmaceutical market around the world, with the United States contributing the largest revenue share in 2022. While developed markets such as the United States and Europe are saturated with growth based mostly on new goods and services, developing regions such as Latin America, Asia, and Africa continue to provide significant growth potential with existing portfolios in the pharmaceutical logistics market.

Pharmaceutical organizations are consequently keeping a careful eye on them. Despite these encouraging advances, pharma distribution remains a significant problem, encompassing a variety of region-specific market risks and concerns. Pharmaceutical prices in the United States are high due to a lack of governmental pricing limits and restricted access to lower-cost drugs from others.Europe accounted for a market share in 2022 and is expected to grow at a significant growth rate during the forecast period. The significant rise in pharmaceutical product transactions across important European countries is responsible for the high market share. These countries mostly include Germany, the United Kingdom, France, Nordic countries, and others. Additionally, increased domestic production and demand for multiple categories of pharma drugs, such as OTC medications, have aided the industry in gaining a significant market share during the forecast period.

The Asia Pacific region is expected to become the fastest-growing region, because of the rapid economic growth in developing countries, such as China and India. The Asia Pacific pharmaceutical logistics industry is expected to grow because of the high demand for OTC medications among a large population.

Additionally, the pharmaceutical sector is seeing a regional change in terms of manufacturing and sales regions. Market participants are finding profitable possibilities in growing economies in Asia and South America, which is expected to drive market growth in these regions.

The Indian pharmaceutical sector is increasing through the development and improving pharmaceuticals. Pharmaceutical items are developed through significant research and clinical testing for global distribution. As a result, pharmaceutical organizations have invested in effective logistics and supply chain management systems in order to attract client loyalty in the market. Drugs are known to be temperature and moisture sensitive.

As a result, the Indian pharmaceutical industry must pay close attention to pharmaceutical product storage and transportation. Cold chain logistics is generally acknowledged by the logistics business as a popular mode of transit for delivering high-quality pharmaceutical items to customers. Due to poor logistics, Indian pharmaceutical businesses confront a number of issues. As a result, pharmaceutical logistics providers find lucrative opportunities in the region.

Regions like Latin America, Africa, and Russia still struggle with geopolitical risks, corruption, and illicit medicine. Likewise, the African continent must deal with security difficulties, and volatile political circumstances and about 30% of the items are counterfeit. Although these hurdles are clear, they highlight that pharmaceutical companies must conduct extensive research before entering these industries.
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Pharmaceutical Logistics Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2018 to 2022
Market Size in 2022:
US $ 88.89 Bn.


Forecast Period 2023 to 2029 CAGR:
9.2%
Market Size in 2029:
US $ 164.61 Bn.


 Segments Covered:
by Type
1. Cold Chain Logistics
2. Non-cold Chain Logistics


by Component
1. Storage
1.1 Warehouse
1.2 Refrigerated Container
2. Transportation
2.1 Sea Freight Logistics
2.2 Airfreight Logistics
2.3 Overland Logistics
3. Monitoring Components
3.1 Hardware
3.2 Software



by Application
1. BioPharma
2. Chemical Pharma
3. Speciality Pharma


by Operation
1. Seaways
2. Roadways
3. Railways
4. Airways
5. Storage and Services


by Product
1. Generic Drugs
2. Branded Drugs



Pharmaceutical Logistics Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)
Pharmaceutical Logistics Market, Key Players are
1. FedEx (United States)
2. United Parcel Service of America, Inc. (United States)
3. Abiomed (United States)
4. BioVentrix (United States)
5. C. R. Bard (Unites States)
6. LifeConEx (United States)
7. Abbott Vascular (Unites States)
8. Abiomed (United States)
9. AtriCure (Unites States)
10. UPS (United States)
11. Air Canada (Canada)
12. VersaCold Logistics Services (Canada)
13. World Courier (Europe)
14. Biotronik (Germany)
15. Deutsche Post DHL (Germany)
16. DB Schenker (Germany)
17. CEVA Logistics (United Kingdom)
18. Agility (Kuwait)
19. SF Express (China)
20. Biosensors International (Singapore)
21. CWT Ltd. (Singapore)
22. Yusen Logistics (India)
23. Pharma Logistics (India)
24. Marken (India)
25. CJ Century Logistics (Malysia)
26. Gemadept (Vietnam)

FAQs:

1. What are the growth drivers for the Pharmaceutical Logistics market?
Ans. The rising importance of fast-track assistance in the healthcare sector, and decreasing the distribution cost by creating a single source distribution channel is expected to be the major driver for the Pharmaceutical Logistics market.

2. What is the major restraint for the Pharmaceutical Logistics market growth?
Ans. The Lack of standardization in pharmaceutical logistics and storage and the high operational cost of cold chain logistics is expected to be the major restraining factor for the Pharmaceutical Logistics market growth.

3. Which region is expected to lead the global Pharmaceutical Logistics market during the forecast period?
Ans. The North American market is expected to lead the global Pharmaceutical Logistics market during the forecast period due to the increasing sales of generic drugs, as well as reforms in the healthcare sector favoring generics.

4. What is the projected market size & growth rate of the Pharmaceutical Logistics Market?
Ans. The Pharmaceutical Logistics Market size was valued at USD 88.89 Bn. in 2022 and the total Pharmaceutical Logistics revenue is expected to grow at a CAGR of 9.2% from 2022 to 2029, reaching nearly USD 164.61 Bn.

5. What segments are covered in the Pharmaceutical Logistics Market report?
Ans. The segments covered in the Pharmaceutical Logistics market report are Type, Component, Application, and Region.