Number of pages: 100 | Report Format: PDF | Published date: April 05, 2023
Historical Years – 2021 | Base Year – 2022 | Forecasted Years – 2023-2031
According to the deep-dive market assessment study by Growth Plus Reports, the global pharmaceutical logistics market was valued at US$ 87.5 billion in 2022 and is expected to register a revenue CAGR of 8.5% to reach US$ 182.34 billion by 2031.
Pharmaceutical Logistics Market Fundamentals
Pharmaceutical logistics refers to managing the transportation, storage, and handling of pharmaceutical products, such as drugs, vaccines, and medical devices, from manufacturers to distributors, wholesalers, and, ultimately, end-users. The pharmaceutical industry is highly regulated, and strict guidelines & regulations govern the transportation and storage of these products. Pharmaceutical logistics requires specialized knowledge, infrastructure, and equipment to ensure products are transported safely and efficiently.
Pharmaceutical logistics ensures that drugs and other medical products are delivered to patients promptly and safely. This is particularly important for life-saving drugs requiring special handling and transportation to maintain efficacy. Pharmaceutical logistics also plays a crucial role in managing inventory, reducing waste, and ensuring that products are distributed most cost-effectively. With the increasing globalization of the pharmaceutical industry, pharmaceutical logistics has become increasingly complex, requiring the coordination of multiple stakeholders across different countries and regions.
Pharmaceutical Logistics Market Dynamics
The global population is growing, and with it comes an increasing demand for pharmaceutical products. This, in turn, drives the need for efficient pharmaceutical logistics to ensure that drugs and other medical products are delivered to their intended recipients on time and in good condition. The pharmaceutical industry is highly regulated, with strict guidelines and regulations governing the transportation, storage, and handling of drugs and other medical products. This drives the need for specialized pharmaceutical logistics providers who can ensure compliance with these regulations and guidelines. Additionally, the use of advanced technology, such as temperature-controlled packaging and tracking systems, has greatly improved the efficiency and safety of pharmaceutical logistics. This has also driven the demand for logistics providers who can offer these advanced services and thus leading to the growth of the global pharmaceutical logistics market revenue. Moreover, e-commerce has created new opportunities for the pharmaceutical industry, with consumers increasingly purchasing drugs and medical products online. This drives the need for logistics providers who can handle the complex logistics of delivering these products directly to consumers.
However, pharmaceutical product transportation, storage, and handling can be expensive due to the stringent regulations and specialized equipment required. This can make it difficult for smaller logistics providers to compete. Furthermore, pharmaceutical products are valuable and can be targeted by thieves, which poses a significant security risk during transportation and storage. Complex supply chains, variable storage conditions, and regulatory compliance impede overall market revenue growth.
Pharmaceutical Logistics Market Ecosystem
The global pharmaceutical logistics market is analyzed from three perspectives: mode of operation, component, and region.
Pharmaceutical Logistics Market by Mode of Operation
Based on the mode of operation, the global pharmaceutical logistics market is segmented into the cold chain and non-cold chain.
The cold chain segment dominated the market with the largest revenue share in 2022. Cold chain refers to transporting temperature-sensitive pharmaceutical products, such as vaccines, biologics, and other specialty drugs, requiring specific temperature-controlled environments to maintain efficacy and safety. With the rise of biologics and other complex pharmaceutical products, there is a greater need for temperature-controlled transportation and storage to ensure that these products are delivered to their intended recipients in optimal condition. This has led to the development of specialized cold chain logistics providers who can offer the necessary infrastructure, equipment, and expertise to ensure that products are transported and stored at the appropriate temperature. These factors contribute to the revenue growth of the cold chain segment.
The non-cold chain segment dominated the market with the second-largest revenue share in 2022. The non-cold chain segment refers to transporting pharmaceutical products that do not require temperature-controlled environments during transport or storage, such as over-the-counter drugs or common prescription medications. While the non-cold chain segment of the pharmaceutical logistics market may not require the same level of specialized equipment and infrastructure as the cold chain segment, it still requires a high level of expertise and attention to detail to ensure that products are delivered promptly and safely. This includes proper packaging, secure transportation, and compliance with regulatory guidelines. These factors contribute to the growth of the non-cold chain segment.
Pharmaceutical Logistics Market by Component
Based on the component, the global pharmaceutical logistics market is segmented into storage and transportation.
The storage segment dominated the market with the largest revenue share in 2022. The storage segment refers to the physical facilities and equipment for storing pharmaceutical products. This includes warehouses, cold storage facilities, and specialized storage facilities for hazardous materials. The storage segment is a critical component of the pharmaceutical logistics industry, as the safe and secure storage of pharmaceutical products is essential to ensure their efficacy and safety. Proper storage conditions, such as temperature and humidity control, are necessary to maintain the integrity of pharmaceutical products and prevent degradation. The storage segment also plays a significant role in inventory management, enabling efficient tracking and monitoring of pharmaceutical products. Effective inventory management ensures that pharmaceutical products are available when and where needed, reducing the risk of shortages or wastage. These overall factors contribute to the revenue growth of the storage segment.
The transportation segment had a prominent revenue share of the market. The transportation segment refers to the movement of pharmaceutical products from one location to another. This includes air, land, and sea transportation and specialized transportation for hazardous materials and temperature-sensitive products. The transportation segment is critical to the pharmaceutical logistics industry, ensuring that pharmaceutical products reach their destination safely and efficiently. Proper transportation methods and conditions, such as temperature control and security measures, are essential to maintain the integrity of pharmaceutical products and prevent damage or theft. This results in the overall segment's revenue growth.
Road shipping involves transporting pharmaceutical products by road in standard temperature-controlled trucks or specialized vehicles designed for cold-chain transport. Many pharmaceutical companies prefer it because of its flexibility and cost-effectiveness. Similarly, air shipping is a critical component of the pharmaceutical logistics market, providing a fast, efficient, and reliable transportation option for pharmaceutical products. Air shipping is particularly important for time-sensitive pharmaceutical products, such as vaccines, that require rapid delivery to ensure their efficacy. Speed is one of the main advantages of air shipping in the pharmaceutical logistics market. Airplanes can quickly transport pharmaceutical products across long distances, reducing transit times and ensuring that products reach their destination on time. These overall factors contribute to the revenue growth of the transportation segment.
Pharmaceutical Logistics Market by Region
The global pharmaceutical logistics market has been segmented based on region into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.
North America dominated the global pharmaceutical logistics market with the largest revenue share in 2022, attributed to the presence of key market players and increased drug import and export activities. Additionally, companies across the region are continuously involved in expanding their presence which is also helping in the growth of the market. For instance, in October 2022, UPS plans to establish a "first-of-its-kind" global healthcare facility in Dublin, Ireland. The new facility, expected to open in late 2023, will comprise almost 6,000 m2 of space designed to connect Ireland's booming pharmaceutical and medical technology businesses to UPS's worldwide logistics network. According to UPS Healthcare, the facility will help Ireland's pharmaceutical and medical device firms transport next-generation biologics, important vaccinations, and vital healthcare equipment to patients worldwide.
Competitive Landscape of the Global Pharmaceutical Logistics Market
The prominent players operating in the global pharmaceutical logistics market are:
Strategic Developments in Pharmaceutical Logistics Market
Pharmaceutical logistics refers to managing the transportation, storage, and handling of pharmaceutical products, such as drugs, vaccines, and medical devices, from manufacturers to distributors, wholesalers, and, ultimately, end-users.
The expected size of the global pharmaceutical logistics market in 2031 is US$ 182.34 billion.
The revenue CAGR of the pharmaceutical logistics market during the forecast period will be 8.5% from 2023 to 2031.
The complex supply chains, variable storage conditions, and regulatory compliance restrict global market growth to its full potential.
Some prominent players operating in the global pharmaceutical logistics market are United States Cold Storage, Inc., Air Canada Cargo, Aspen Technology Inc., Agility, DB Schenker, and Kerry Logistics Network Limited
*Insights on financial performance are subject to the availability of information in the public domain