The global pharmaceutical logistics market size was valued at USD 69.0 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 7.3% from 2020 to 2027. The short-term impact of COVID-19 on the market is the crucial factor for pharmaceutical logistics’ fast-paced growth across the globe. Amid the pandemic, governments around the world are emphasizing on healthcare facilities and ample medicinal supply for the patients. As such, the trade of conventional medicines is increasing from country-to-country. Additionally, the U.S. Food and Drug Administration (FDA) has approved Emergency Use Authorization for hydroxychloroquine, which is to be used by licensed health care providers to treat teens and adults hospitalized with COVID-19, who weigh more than 50 kg. As such, the trade of hydroxychloroquine is increasing in countries, including the U.S. and India.
Many pharmaceutical companies, such as Amgen Inc.; Adaptive Biotechnologies Corp; and CalciMedica Inc., are actively engaged in the research and development of treatments for COVID-19. This research includes the use of various drugs and medicinal compounds that need to be transported using a secure cold chain solution, which in turn is expected to boost the market for pharmaceutical logistics. Additionally, the companies, including BioNTech SE; Heat Biologics Inc.; and Pfizer Inc., are focusing on the development of the COVID-19 vaccine. The market is expected to witness considerable growth once the vaccine is successfully developed and deployed worldwide. Along with this, the demand for medicines used for curing the novel coronavirus disease is also expected to boost the market growth.
The growth of the market is also attributed to the increasing demand for Over The Counter (OTC) medicines such as Vitamins, Minerals, and Supplements (VMS), common cough and cold drugs, gastrointestinal drugs, and dermatology products. The rising importance of fast track assistance in the healthcare sector is also driving the market for pharmaceutical logistics. Moreover, decreasing the distribution cost by creating a single source distribution channel is further boosting the demand for pharmaceutical logistics. A large number of companies are entering into mergers and acquisitions to expand their geographical presence and proprietary knowledge. They are also focusing on reducing the overall packaging costs of their products. The biotechnology and pharmaceutical supply chains are particularly prone to the risks associated with product adulteration during transport as well as non-compliance with federal regulations, standards, and guidelines. As a result, the players are actively investing in state-of-the-art technologies such as telematics and remote monitoring to provide safety and convenience during transportation operations, which is, in turn, propelling the market growth.
The pharmaceutical manufacturing companies are increasingly outsourcing the packaging and labeling activities from third party providers. Many pharmaceutical companies are expanding their operations in the untapped regions including Sub-Saharan Africa and Latin America. Herein, the preference for local logistics providers with high expertise in pharmaceuticals is of great importance to drug manufacturers. However, the deteriorating service levels and loss of control are significant threats that are faced in outsourcing operations.
The demand for pharmaceutical logistics is growing in the U.S. on account of increasing sales of generic drugs, as well as reforms in the healthcare sector favoring generics. The market for pharmaceutical logistics in North America is significantly fragmented owing to the presence of a large number of regional and international companies. The industry is highly competitive, owing to the presence of many local and global companies.
Major companies strive to offer cloud-based supply chain solutions and secured supply chain functions as it helps manufacturers in verifying the authenticity of the drugs. These solutions prevent the production of counterfeit drugs and medical devices. The increasing demand for sea and air freight pharmaceutical logistics is anticipated to propel industry growth over the forecast period. The transportation of pharma products by the sea reduces the transportation cost up to 80.0% and brings down the staffing requirements. Additionally, it conserves on the packaging and storage needs while reducing the carbon footprint of logistics operations. The increasing use of air freight logistics for long-distance and intercontinental distribution of valuable vaccines and medicines is expected to fuel the growth further.
In terms of value, cold chain logistics dominated the market with a share of 26.3% in 2019. This high share is attributable to the rising demand for temperature-controlled products. The cold chain segment is expected to continue its dominance over the forecast period. The growing adoption of telematics in cold chain pharmaceutical logistics is helping the companies to enhance the efficiency, connectivity, and safety of transport cargoes. Furthermore, the increasing adoption of cloud computing solutions and new IoT devices in refrigerated trucks and containers allows pharmaceutical logistics companies to provide real-time remote temperature monitoring while transporting temperature-sensitive drugs and vaccines.
Most of the biological and medical products require a temperature-controlled environment during the stage of manufacturing and distribution, which helps in maintaining the effectiveness and quality of the medicines. Thus, pharma companies are using temperature-controlled transportation and cold storage systems. The non-cold chain segment is expected to have a considerable share in the next seven years owing to the increasing demand for the non-cold chain products.
In terms of value, the storage segment dominated the market with a share of 64.7% in 2019. This high share is attributable to the increasing focus on the storage of temperature-sensitive supplements to make sure that the pharmaceutical products are safe during transportation. Factors such as changing lifestyles of consumers and the dietary pattern are driving the demand for temperature-sensitive protein and nutritional supplements, which is expected to boost the demand for the storage segment over the forecast period. The storage segment is further segregated into the warehouse and refrigerated container.
The monitoring components segment is expected to witness the highest CAGR from 2020 to 2027 owing to the increasing need to ensure the efficiency, integrity, and safety of the cold chain products. The monitoring components segment is further segregated into hardware and software components. The transportation segment is likely to reach a considerable growth pace over the forecast period. The transportation segment is further divided into sea freight logistics, air freight logistics, and overland logistics. The increasing adoption of the sea-based pharmaceutical logistics is driving the pharmaceutical logistics market as the sea freight logistics services are capable of handling sensitive large molecule biologics as well as personalized medicines.
North America dominated the market with a share of 36.1% in 2019. This is attributable to significant fragmentation in North America owing to the presence of a large number of major industry participants. Moreover, an increasing number of mergers and acquisitions among pharma companies, such as Bristol-Myers Squibb and AbbVie Inc., is likely to drive the regional market further. Based on region, the market for pharmaceutical logistics is also segmented into Europe, Asia Pacific, South America, and the Middle East and Africa.
Asia Pacific is projected to be the fastest-growing region owing to rapid economic growth in emerging countries, such as China and India. High demand for medicines due to the growing geriatric population will also augment the market for pharmaceutical logistics in Asia Pacific. Moreover, the pharmaceutical industry is undergoing a geographic shift in production and sales locations. The market players are finding lucrative opportunities in the developing economies in Asia and South America, which is in turn expected to boost the market growth in these regions.
To maintain the position in the market, the pharma companies continuously undertake strategic initiatives such as mergers and acquisitions. For instance, in October 2019, Pharma Logistics acquired the pharmaceutical reverse distribution division of Stericycle, Inc to expand the geographic footprint as well as expand the service portfolio. Furthermore, the companies in the market are investing in technologies such as telematics, remote sensing and monitoring, and GPS and GIS integration in transport cargo, thereby providing the customers with a safe and convenient pharmaceutical logistics services. Some of the prominent players in the pharmaceutical logistics market include:
Agility
Air Canada
CEVA Logistics
DB Schenker
Deutsche Post AG
FedEx
LifeConEx
Marken
United Parcel Service of America, Inc.
VersaCold Logistics Services
Report Attribute |
Details |
Market size value in 2020 |
USD 72.8 billion |
Revenue forecast in 2027 |
USD 118.9 billion |
Growth rate |
CAGR of 7.3% from 2020 to 2027 |
Base year for estimation |
2019 |
Historical data |
2016 - 2018 |
Forecast period |
2020 - 2027 |
Quantitative Units |
Revenue in USD million and CAGR from 2020 to 2027 |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors, and trends |
Segments covered |
Type, component, region |
Regional scope |
North America; Europe; Asia Pacific; South America; Middle East & Africa |
Country scope |
U.S.; Canada; Mexico; U.K.; Germany; France; China; Japan; India; Brazil |
Key companies profiled |
Agility; Air Canada; CEVA Logistics; DB Schenker; Deutsche Post AG; FedEx; LifeConEx; Marken; United Parcel Service of America, Inc.; VersaCold Logistics Services |
Customization scope |
Free report customization (equivalent up to 8 analyst’s working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global pharmaceutical logistics market report based on type, component, and region:
Type Outlook (Revenue, USD Million, 2016 - 2027)
Cold Chain Logistics
Non-Cold Chain Logistics
Component Outlook (Revenue, USD Million, 2016 - 2027)
Storage
Warehouse
Refrigerated Container
Transportation
Sea Freight Logistics
Air freight logistics
Overland Logistics
Monitoring Components
Hardware
Sensors
RFID devices
Telematics
Networking devices
Software
Regional Outlook (Revenue, USD Million, 2016 - 2027)
North America
The U.S.
Canada
Mexico
Europe
The U.K.
Germany
France
Asia Pacific
China
India
Japan
South America
Brazil
Middle East & Africa
b. The global pharmaceutical logistics market size was estimated at USD 69 billion in 2019 and is expected to reach USD 72.8 billion in 2020.
b. The global pharmaceutical logistics market is expected to grow at a compound annual growth rate of 7.3% from 2020 to 2027 to reach USD 118.9 billion by 2027.
b. North America dominated the pharmaceutical logistics market with a share of 36.1% in 2019. This is attributable to the presence of a large number of major industry participants in the region as well as an increasing number of mergers and acquisitions among pharma companies such as Bristol-Myers Squibb and AbbVie Inc.
b. Some key players operating in the pharmaceutical logistics market include Agility, Air Canada, CEVA Logistics, DB Schenker, Deutsche Post AG, FedEx, LifeConEx, Marken, United Parcel Service of America, Inc., and VersaCold Logistics Services.
b. Key factor that is driving the market growth include the increased demand and transportation of medicines, drugs, gloves, PPE kits, and so on owing to the impact of COVID-19 pandemic. The rising demand for a variety of drugs as a result of increasing cases of chronic and lifestyle-related diseases is also crucial factor that is driving the market.
This report has a service guarantee. We stand by our report quality.
We are in compliance with GDPR & CCPR norms. All interactions are confidential.
Design an exclusive study to serve your research needs.
Get your queries resolved from an industry expert.
"The quality of research they have done for us has been excellent..."
Unavailability of a proper vaccine against COVID-19 is increasing the burden on the healthcare ecosystem worldwide. Researchers and clinical scientists worldwide are experimenting with drugs to find a cure for COVID-19. Will demand for pharmaceutical logistics services surge in wake of increasing need to test, manufacture, and launch preventive & treatment medicines? We are currently working on our analysis to capture the exact cumulative impact of the COVID-19 outbreak on the pharmaceutical logistics market. The report will account for Covid-19 as a key market contributor.