|Forecast Period :||2018-2026|
|Base Year :||2018|
|Leading Market Segments :||Non-cold Chain|
|Value in 2018 :||$82,564.8 Million|
|Research covered :||100+ Countries|
Global Statistics Representing Biopharmaceutical Logistics Market Scenario
Notable growth in the sales of pharmaceutical products and the trend of outsourcing logistics operations are driving the demand for logistics services globally. As per IQVIA’s report on Global Use of Medicines, the global pharmaceutical market was estimated at USD 1.2 trillion in 2018, around USD 100 billion more than 2017. The market is projected to grow at a CAGR of about 5% to reach USD 1.5 trillion by 2023. Global shipping processes are complex and require intensive management. Outsourcing logistics operations is advantageous for pharmaceutical manufacturers in terms of cost-effectiveness, harmonizing distribution process, and managing cold chains for the distribution of temperature-sensitive pharmaceutical products.
Stringent controls are required over the supply chain to tackle the issues of falsified drugs. Regulatory authorities globally have led the guidelines specifying clear identification, monitoring, and tracking of the pharmaceuticals. Management of these networks and processes require a high degree of IT competence and huge investments. Thus, the regulatory requirement for serialization and data aggregation issues for falsified products is further driving the trend of outsourcing logistics. As per the 22nd Annual Third-Party Logistics Study, out of the total respondents, 92% of third-party providers and 73% of third-party users agreed that third-party logistics enable innovations and new ways in improving the effectiveness of logistics services.
Global biopharmaceutical logistics market is expected to reach USD 131,554.1 million by 2026 from USD 82,564.8 million in 2018 at a CAGR of 6.2% during the forecast period 2019–2026
Cold Chain or Non-Cold Chain, which is Highly Preferred?
For a better understanding of the biopharmaceutical logistics market, we have segmented the market by supply chain and types of services.
By supply chain, the market is segmented into cold chain and non-cold chain. Non-cold chain accounted for the largest revenue share in 2018 and accounted for USD 67,293.14 million. This can be attributed to a high volume of drugs that do not require temperature control and are transported through general cargo. Third-party logistics services provide higher visibility, development of strong distribution network, and greater scalability with reduction in the operational cost. However, the cold chain supply chain is expected to grow at the fastest CAGR of 7.3% and offer potential growth opportunity for market growth in the years to come.
Key Services Provided by the Logistics Service Providers
By services, we have segmented the biopharmaceutical logistics market into transportation, warehousing, and others.
In 2018, transportation contributed 42.8% to the total services revenue due to most of the biopharmaceutical products are outsourced. In addition, the emergence of autonomous technologies for transportation such as platooning, driver assistance technologies are likely to fuel the market growth further by ensuring the safe transportation of cargo by reducing the chancer of accidents and improving fuel efficiency. By mode of transportation, the t market is further segmented into air, sea, and overland. Air transportation generated the highest revenue maybe because of higher prices of air freight. For instance, the prices of air freight are nearly triple than sea freight.
By volume of shipments, sea freight accounted for the highest share. However, a shift in the trend from air freight to sea freight is expected to change the market dynamics over the forecast period. As per the data reported by one of the market players in cold chain logistics, AstraZeneca, a pharmaceutical manufacturer has aggressively moved from air to sea shipping, owing to the high incidences of temperature excursion due to air freight. The company has planned to ship nearly 70% of its volume by sea freight.
We have segmented the global biopharmaceutical logistics market based on geography into North America, Asia Pacific, Europe, and Latin America and the Middle East and Africa (LAMEA).
North America dominated the market in 2018, and the U.S. was the largest contributor. Majority of the global pharmaceutical top companies are based in the U.S. In 2016, 6 of the top 10 pharma companies were from the U.S. in terms of revenue. This represents a huge demand for logistics operations for distribution. Moreover, nearly USD 60 billion are spent on pharmaceutical R&D annually in the U.S. Moreover, the accessibility to the treatment is more in the U.S., owing to the higher adoption of advanced technologies and favorable reimbursement policies. As per Adelante SCM estimates, nearly USD 45 billion to USD 55 billion were spent on transportation in 2015 in Canada. Increasing spending on logistics is also one of the key market drivers. In 2018, overall spending on logistics increased to 8% of total GDP as compared to 7.5% in 2017. Supportive initiatives to improve transportation infrastructure is also spurring the overall growth. For instance, nearly USD 2 billion were invested under The Trade and Transportation Corridors Initiative in Canada to develop efficient transportation infrastructure in the country.
Europe is another leading pharmaceutical market as it generated revenue of USD 215 million in 2018 and is the second-largest market for pharmaceuticals globally. This represents a high demand for pharmaceutical logistics services for distributing drugs and biologics. Moreover, as per 2016 Third-Party Logistics Study, third party logistics providers generate most of their revenue (nearly 38.5%) in Europe. Growing trade of pharmaceuticals in Europe also represents favorable market opportunities.
Asia Pacific is expected to grow at the fastest CAGR over the forecast period, owing to growing production of generics drugs in China and India, increasing trade of pharmaceuticals, and rising presence of contract research and manufacturing organizations in the emerging economies. Growing accessibility to the treatment also represents favorable market growth. On the other hand, LAMEA is witnessing sluggish growth. However, it is expected to represent favorable opportunities due to changing trade laws in these regions.
Some of the key players in the global biopharmaceuticals logistics market are DHL International GmbH., United Parcel Service of America, Inc, SF Express, DB Schenker, AmerisourceBergen Corporation, Kerry logistics Network Limited, Kuehne and Nagel, and Agility.
Our Report Covers
Biopharmaceutical Logistics Market Segmentation
By Supply Chain
By Type of Services