Pharmaceutical Logistics Market Size, Share & Trends Analysis Report By Type (Cold Chain Logistics, Non-cold Chain Logistics), By Component (Storage, Transportation, Monitoring Components), By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global pharmaceutical logistics market size was valued at USD 78.5 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.6% from 2022 to 2030. The short-term impact of the COVID-19 pandemic on the market is a crucial factor for the fast-paced growth of pharmaceutical logistics. Amid the pandemic, governments around the world are emphasizing 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 healthcare 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.

The emergence of the COVID-19 virus has enabled several key pharmaceutical players or vaccine producers to invest massively in research and trials for launching effective vaccines for the virus. More than 60 companies were doing clinical trials of COVID-19 vaccines across the globe, wherein few of the vaccines such as Sputnik V, Covishield, Covaxin, and mRNA have been approved for emergency use in key countries such as India, Russia, the U.K., and the U.S.

With the approval of the aforementioned vaccines for usage, key vaccine producers are actively looking to distribute these vaccines around the globe. It would need a resilient supply chain to make vaccines available across the globe for urgent usage. Therefore, it is estimated to drive the growth of the market at a significant pace during the forecast period. 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 further increases the demand for pharmaceutical logistics.

Many 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 packaging and labeling activities from third-party providers. Many pharmaceutical companies are expanding their operations in untapped regions, including Sub-Saharan Africa and South America. 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. due to 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 several regional and international companies. The industry is highly competitive due 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 ensure 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 during the forecast period. The transportation of pharma products by sea reduces the transportation cost by up to 80.0% and decreases the staffing requirements.

Additionally, it conserves 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 market growth further.

Type Insights

The cold chain logistics segment dominated the pharmaceutical logistics market with a revenue share of over 28.0% in 2021 and is expected to expand at a significant CAGR from 2022 to 2030. The growth is attributable to the rising demand for temperature-controlled products, such as the ongoing distribution of COVID-19 vaccines that require accurate temperature control logistics services to maintain the products’ efficacy.

Furthermore, the stringent government regulations regarding maintaining accurate temperature for highly temperature-sensitive pharmaceutical products are expected to boost the segment growth during 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.

Most 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 non-cold chain pharma medicines and other products.

Component Insights

The storage segment attained the largest market share of more than 64.0% in 2021. The rapidly rising demand for generic and branded pharma products' has surged the significant need for storage facilities to preserve and procure these products’ efficacy after production and their further distribution through multiple channels to the distributors and retailers.

Further, the ongoing pandemic of COVID-19 has generated the demand for temperature-sensitive storage facilities to store the vaccines at their requisite temperature during logistics. As a result, this is expected to bolster the segment growth over the coming years. Factors such as changing lifestyles of consumers and the dietary pattern are driving the demand for temperature-sensitive protein and nutritional supplements, which are expected to boost the demand for the storage segment during the forecast period.

The monitoring components segment is expected to witness the highest CAGR from 2022 to 2030, owing to the increasing need to ensure the efficiency, integrity, and safety of the cold chain products. The monitoring components segment is divided 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 sea-based pharmaceutical logistics is driving the growth of the market for pharmaceutical logistics as the sea freight logistics services can handle sensitive large molecule biologics and personalized medicines.

Regional Insights

Europe accounted for a market share of over 36.0% in 2021 and is estimated to expand at a significant growth rate from 2022 to 2030.  The high market share is due to the substantial growth in pharmaceutical products’ trades across key European countries. These countries mainly include Germany, the U.K., France, Nordics, and others. Additionally, growing production and demand for several categories of pharma products such as OTC medicines in the domestic region has further helped the market to gain a huge market share.

The Asia Pacific region is projected to be the fastest-growing region, owing to the rapid economic growth in emerging countries, such as China and India. High demand for OTC medicines among a huge population is expected to augment the market for pharmaceutical logistics in the 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.

Key Companies & Market Share Insights

To maintain their position in the market, the pharma companies continuously undertake strategic initiatives, such as mergers and acquisitions. For instance, in October 2018, FedEx acquired Manton Air-Sea Pty Ltd., a logistics service provider company. The acquisition helped FedEx to fortify its geographical footprints across the Asia Pacific region. Additionally, in January 2019, FedEx announced the acquisition of International Express Business from Flying Cargo Group in Israel. The acquisition is aimed at strengthening FedEx’s portfolio and regional presence, providing customers with the benefits of the company’s global network.

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 safe and convenient pharmaceutical logistics services. For instance, in May 2020, United Parcel Service of America, Inc. announced the expansion of the company’s healthcare capabilities with the launch of the new UPS Premier. UPS Premier aims to improve service reliability and improved visibility of healthcare packages by leveraging next-generation sensor technology and monitoring. Some of the prominent players in the global 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

• Others

Pharmaceutical Logistics Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global pharmaceutical logistics market report based on type, component, and region:

• Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Cold Chain Logistics

  • Non-cold Chain Logistics

• Component Outlook (Revenue, USD Billion, 2017 - 2030)

  • Storage

    • Warehouse

    • Refrigerated Container

  • Transportation

    • Sea Freight Logistics

    • Airfreight Logistics

    • Overland Logistics

  • Monitoring Components

    • Hardware

      • Sensors

      • RFID Devices

      • Telematics

      • Networking Devices

    • Software

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • South America

    • Brazil

  • Middle East & Africa (MEA)