The global pharmaceutical logistics market involves the distribution of various pharmaceutical products including biopharmaceuticals, vaccines, prescription and OTC drugs, medical devices, and various clinical trial materials. These products must be maintained within stringent temperature and humidity parameters to ensure the quality and effectiveness of drugs and vaccines. Rise in demand for temperature-controlled logistic services and packaging products is enabling efficient transportation of pharmaceuticals across the globe. Key players operating in the pharmaceutical logistics market are Maersk, United Parcel Service of America, Inc., AWL India Private Limited, DHL Group, Kuehne+Nagel, DB Schenker, CEVA Logistics, SLB Performance, YUSEN LOGISTICS CO., LTD., NextPharma Logistics GmbH, Skandi, Movianto, Continental Carriers, Varuna Group, Sugamgroup, V-Xpress, Avvashya CCI Logistics Private Limited, Agility and Cencora, Inc.
The Global Pharmaceutical Logistics Market is estimated to be valued at US$ 99.7 BN in 2024 and is expected to exhibit a CAGR of 9.1% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in The Pharmaceutical Logistics Market are Maersk, United Parcel Service of America, Inc., AWL India Private Limited, DHL Group, Kuehne+Nagel, DB Schenker, CEVA Logistics, SLB Performance, YUSEN LOGISTICS CO., LTD., NextPharma Logistics GmbH, Skandi, Movianto, Continental Carriers, Varuna Group, Sugamgroup, V-Xpress, Avvashya CCI Logistics Private Limited, Agility and Cencora, Inc. The increasing government spending on healthcare globally coupled with increasing number of hospitals in emerging countries has significantly increased the demand for pharmaceutical products which is driving the pharmaceutical logistics market.
Major players in the pharmaceutical logistics market are expanding their global footprint by investing in logistics infrastructure such as warehouses and transportation fleets. For instance, DHL offers GDP-certified temperature controlled facilities in 60+ countries to enable storage and transportation of pharmaceuticals under predefined temperature ranges.
Market drivers
The key driver for the pharmaceutical logistics market is the increasing demand for temperature controlled packaging and transportation of pharmaceuticals. Maintaining integrity of chemical composition and potency of drugs and vaccines during transportation is critical. Rise in demand for temperature-sensitive drugs and stringent regulations regarding the handling of pharmaceuticals are compelling logistics companies to invest in modern cold chain infrastructure and specialized packaging solutions. This is expected to drive the growth of pharmaceutical logistics market during the forecast period.
The current geopolitical situation is significantly impacting the growth of the global pharmaceutical logistics market. Various trade wars, sanctions, and supply chain disruptions caused by the ongoing Russia-Ukraine conflict are hindering the free movement of medicines and medical supplies across international borders. Many European countries that were previously heavily dependent on Russian and Ukrainian suppliers for active pharmaceutical ingredients and raw materials are now facing severe shortages. This is forcing drug makers to look for alternative sourcing options in other geographies like North America and Asia Pacific which is driving up costs. Additionally, sanctions imposed on Russia are restricting access to the Russian market which was emerging as a lucrative growth area for many pharmaceutical logistics players. Going forward, logistics providers will need to diversify sourcing and increase regionalization of manufacturing and distribution networks to reduce dependency on conflicts zones and volatile geopolitical environments. Operators will also have to invest more in advanced tracking technologies and multi-modal capabilities to effectively manage complexities arising from trade issues and disruptions.
In terms of value, North America currently represents the largest regional market for pharmaceutical logistics, accounting for over 35% share of the global market in 2024, estimated at around US$ 35 billion. This is due to presence of well-established logistics infrastructure, sophisticated Cold chain network, proximity to major pharma hubs and high per capita healthcare spending in the region which drives demand for medicines. However, Asia Pacific is expected to be the fastest growing regional market, with countries like India, China, Japan & South Korea seeing exponential increase in pharma production and consumption. Rapid infrastructure development, rising incomes, growing medical tourism, investments by logistics majors and evolving regulatory environment are fueling market expansion in Asia Pacific.
The fastest growing geographical region for the global pharmaceutical logistics market is Asia Pacific. Asia Pacific is projected to be the fastest growing regional market, with countries like India, China, Japan & South Korea seeing exponential increase in pharma production and consumption. Rapid infrastructure development including expansion of road networks, rail lines, free trade zones, sea ports and airports in Asia Pacific has substantially enhanced connectivity and reduced logistics costs. Additionally, rising incomes, growing medical tourism, focus on manufacturing by global drug makers and evolving regulatory environment supporting pharmaceutical logistics are fueling stronger demand and market expansion opportunities across Asia Pacific.
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