Pharmaceutical Logistics Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Pharmaceutical Logistics Market Data

Pharmaceutical Logistics Market Trends & Drivers

Advancement in Technologies Is a Key Market Trend

• RFID enables pallet-level surveillance and identification of pharmaceutical products, thus contributing to supply chain authenticity by lowering cold chain transportation losses, sustaining optimum hygiene, and maintaining product integrity.
• The U.S. Food and Drug Administration (FDA) has issued guidelines that govern the data format of RFID sensors all along the medicine supply chain. The FDA mandated manufacturers and trading partners to establish entirely interoperable electronic track-and-trace systems in place by November 2023 according to the Drug Quality and Security Act (DSCSA).
• The European Medicines Agency (EMA) recommendations also center on the use of RFID tags to track the distribution of medication along the supply chain. This would encourage businesses to set in place the necessary security measures to safeguard patient privacy and stop counterfeiting.
• Leading pharmaceutical companies are resorting to industry clouds to speed up the migration of critical workloads to the cloud and address many of these challenges.
• Key aspects of the cloud for this industry are supply chain orchestration systems and control towers, ERP, MES systems, and quality control solutions for laboratories.

Growing Cold-Chain Industry

• In recent years, the pharma cold-chain industry size has skyrocketed, and cold-chain logistics accounted a significant growth in the pharmaceutical industry, with an increase in the demand for a wide range of drugs.
• During the COVID-19 pandemic, the industry performed admirably, despite the fact that most vaccine products demanded a strict temperature regime (−80 °C), which had hardly been seen before. To deal with the emergency, various pharma cold-chain companies boosted their capacity and elevated their service levels, and these modifications are now benefiting the pharma logistics business.
• Hybrid cold-chain solutions are expected to be the most-prominent type of cold-chain solutions in the future as they enable the management of the active prospects of temperature control, including electricity/battery-powered coolers, as well as passive prospects, including insulative panels and linings. This way they help in maintaining the ideal temperature inside an enclosure.
• in June 2023, Skycell and Marken signed a product utilization agreement for the former to use Marken's Monarch hybrid container.
• CSafe seeking expansion of supply chain options for cell and gene therapy products across multiple stages of development with collaborative support from Central Pharma in May 2023.

Challenges in Product Preservation and Transportation

• One of the key variables influencing the market is how drugs are preserved. A lot of medicines need to be kept at particular temperatures, of 15–25 °C, in dry, well-ventilated premises. The effective control of the temperature is vital to ensure the safety and efficacy of medicines, blood & tissue products, vaccines, and other pharmaceutical goods.
• If such items are not stored under the desired conditions, they might lose their effectiveness and even become dangerous. As a result, logistics firms must provide temperature-controlled freight transportation alternatives.
• The healthcare industry relies significantly on the supply chain, where disruptions constitute an enormous threat to the market. Several variables influence its trade, including the mode of transportation and the conditions during it. According to the Australian Bureau of Statistics, from June 2022, over two out of every five enterprises (41%) experienced supply chain disruptions. Intricacy, less visibility, a lack of innovation, and error-prone forecasting all contribute to a slower response to catastrophes.
• In present times, the Red Sea attacks jeopardize the supply chains of pharmaceutical goods, which encompass a vital industry across APAC (India and China) and the U.S. and Europe.

Pharmaceutical Logistics Industry Outlook

Logistics Type Outlook

• The cold-chain category is projected to grow at the highest CAGR, of around 9.7%, during 2024–2030, as well as holding the largest market share. The extensive export and import of vaccines have led to the growth in this category since the COVID-19 pandemic.
• The spike is essentially due to the increasing demand for COVID-19 vaccines, which require precise temperature control during logistics, to maintain their efficacy.
• Most biological and medicinal goods require a temperature-controlled environment during manufacturing and distribution to ensure their effectiveness and absolute purity. Thus, pharmaceutical businesses use temperature-controlled shipping and cold storage systems.
• The technological advancements in the cold-chain have increased the safety by offering real-time visibility and tracking of the products which extensively boosts the market.

During the study, we have analyzed two types of pharma logistics solutions in the report:

• Cold-Chain (Larger and Faster-Growing Category)
• Non-Cold Chain

Application Analysis

• The chemical pharma category held the largest market share, of around 45%, in 2023, primarily attributed to drug companies’ increasing requirement for APIs.
• The increasing incidence of chronic diseases has a huge impact on the growth in the demand for chemical pharmaceutical logistics. This is because the increased demand for medication significantly impacts their trade, which directly boosts the chemical logistics industry.
• In this regard, the growing inter-country trade of drugs will also make this category the fastest growing during the forecast period.

Below are the major applications in which pharmaceutical logistics plays an important role:

• Chemical Pharma (Largest and Fastest-Growing Category)
• Biopharma
• Specialized Pharma

Mode of Transport Outlook

• The seaways category held the largest market share, of around 50%, in 2023.
• Sea transportation can easily accommodate specialized refrigerated containers (reefers), enabling better supply chain organization. Overall, despite the high risk involved during drug handling, sea carriers seem best placed to control the whole pharma shipping process with refrigeration mechanisms.
• Smart shipping containers allow for consistent supervision over the conditions in which the pharmaceutical goods are kept, especially with respect to the temperature.
• The marine transportation mode’s carbon footprint is a lot more than that of planes, which supports the environment and sustainability initiatives; hence making it a better mode for carrying the drugs. In addition, the improvement in cold-chain equipment, stronger product safety during shipping, and lower costs have driven many drug companies toward the ocean for the transportation of their goods.

We have analyzed the following modes of transport:

• Seaways (Largest and Fastest-Growing Category)
• Airways
• Roadways
• Railways

Component Outlook

• As transportation is a crucial part of the logistics chain, it accounted for the largest revenue share, of around 55%, in the pharmaceutical logistics market in 2023. The rapid increase in the demand for drugs after the pandemic has driven inter-country trade volumes of drugs, which, in turn, supports the growth of the transportation sector.
• The transportation of goods has always been a crucial factor for pharmaceutical logistics; therefore, specific types of containers and different modes of transportation are utilized for safe and hassle-free transportation, depending on the product to be shipped.
• Crucial for this sector is to store and transport the goods safely, which can be achieved by recent advancements, such as cold storage and transit containers.
• New technologies, such as RFID, aid by minimizing the theft and loss of goods. This involves providing the package with a tag, which helps track the goods during transit, thus making the process safer and theft-proof.

During the study, we analyzed the components used for the following aspects of logistics:

• Transportation (Largest and Fastest-Growing Category)
• Storage
• Monitoring

Europe Holds Largest Market Share

• Europe is the largest market, and it is set to advance at a CAGR of 9.6% during 2024–2030. The significant increase in the trade of pharmaceutical products across key European countries, such as Germany, the U.K., and France, is responsible for the continent’s largest market share.
• The fastest-growing region in the industry is Asia-Pacific, primarily driven by the growing healthcare and pharmaceutical industries in countries such as Japan, China, and India.
• As a result of the COVID-19 pandemic's effects on the healthcare cold chain, as well as the restrictions imposed on commerce, cold chain firms emphasized more on storage, in order to extend the shelf life of their products.
  Foreign direct investments (FDI) in Japan's pharmaceutical industry have risen substantially over time, facilitating the country to build an international network. Four of the world's top 25 pharmaceutical companies have their headquarters in Japan.
• India is eyeing pharmaceuticals as a critical sector to secure itself against any future supply chain disruption, such as those encountered during COVID-19.

Further, regions and countries analyzed for this report include:

• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe (Largest Regional Market)
  • Germany (Largest and Fastest-Growing Country Market)
  • U.K.
  • France
  • Spain
  • Italy
  • Rest of Europe
• APAC (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan (Fastest-Growing Country Market)
  • India
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest and Fastest-Growing Country Market)
  • U.A.E.
  • South Africa
  • Rest of MEA

Competitive Analysis

The market is highly fragmented, with many companies operating globally. DHL, DB Group, and FedEx are the industry's major players. To maintain their market position, these companies constantly look for growth strategies, such as acquiring other businesses. Furthermore, they are investing in technological advances, such as telematics, remote sensing & monitoring, and cargo GPS & GIS integration, ensuring that consumers receive safe and convenient services.

Moreover, companies are showcasing their new offerings in the space and demonstrating their latest technologies at industry conferences, seminars, and trade shows. For instance, Fly Pharma Europe, a pharmaceutical logistics conference and exhibition, brought together regulators, industry leaders, and logistics service providers to showcase the best practices and most recent innovations for the transportation of pharma and life sciences goods.

Pharmaceutical Logistics Companies News

• Kuehne Nagel received its third IATA CEIV Pharma certification for its airborne logistics healthcare network on the trot.
• In September 2023, under a partnership, Cipla Limited and Skye Air Mobility launched a drone delivery service for some critical medicine to pharmacies and hospitals in Himachal Pradesh.