The global biopharmaceutical third-party logistics market size was valued at USD 117.25 billion in 2021 and is predicted to reach USD 195.75 billion by 2030, increasing at a CAGR of 5.86% from 2022 to 2030. Logistics services provided by third-party organizations for pharmaceutical businesses are known as biopharmaceutical third-party logistics (3PL). For example, it includes receiving small molecule pharmaceuticals into the warehouse; fulfilling orders; and managing inventory of the commodities using a warehouse management system. For example, by decreasing unnecessary overhead costs, ensuring continuous product supply, optimizing transportation and improving the overall efficiency of the organization, 3PL helps pharmaceutical and medical institutions maintain logistics for the delivery of medical therapies.
One of the main reasons for the market's optimistic outlook is the rapid expansion of the pharmaceutical industry. In addition, the growing trend of medical organisations outsourcing logistics in order to improve their distribution network is propelling the growth of the market. The introduction of warehouse robots, mobile cloud computing, real-time monitoring and data mining technologies, as well as other technical breakthroughs, are all contributing to the expansion of the economy. Logistics-related tasks can be automated with the help of these technologies, reducing the complexity of operations, human errors, and damage to products in transit. Also, in line with this, temperature-sensitive pharmaceutical products are managed and notifications about shipments are received in real-time via cold chain monitoring solutions based on Near Field Communication (NFC) and Internet of Things (IoT).
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The expansion of the biopharmaceutical third-party logistics (3PL) market is expected to be driven by the growing demand for efficient logistics solutions that can securely carry temperature-sensitive medications. The introduction of a wide variety of biologics and biosimilars, all of which call for temperature-controlled logistic service in order to be distributed, is anticipated to be the driving force behind the expansion of the biopharmaceutical third-party logistics market. Demand for third-party logistics services is being driven by the increased adoption of automation in manufacturing facilities, which is being done in an effort to minimize operational costs. Additionally, the increasing demand for biologics as a result of the rising frequency of chronic diseases is contributing significantly to the expansion of the biopharmaceutical third-party logistics (3PL) market. Over the course of the projection period, the market will be driven by increasing environmental concerns among pharmaceutical companies and their efforts to decrease their carbon footprint.
The proliferation of temperature management logistic services is also being driven in large part by technological improvements, which is one of the most important drivers. The logistics business as a whole has been significantly impacted by the introduction of new technologies such as warehouse robotics, mobile cloud solutions, data mining, and real-time monitoring. According to a poll that was conducted all around the world in the month of July 2021, third-party logistics providers place a high value on cold chain services (3PLs). More than sixty percent of service providers who offer third-party logistics (3PL) believe that cold chain services are extremely crucial for the development of their company in the years to come.
Companies are investing more money in research and development in order to come up with efficient value-added services so that they can meet the growing demand for advanced logistic services in the biopharmaceutical business. The technology that measures the ambient conditions inside the car is termed smart sensor technology. DHL is able to make improvements to its distribution network thanks, in part, to the implementation of technologically advanced devices.
The development of logistics services in developing countries continues to lag behind that of industrialized countries. The shortage of skilled workers in the biopharmaceutical third-party logistics sector is to blame for this increase in demand for services. It's also difficult to expand the biopharmaceutical third-party logistics industry because of the shortage of qualified personnel. Consequently, the global market for third-party logistics for biopharmaceuticals has been hindered.
A biopharmaceutical third-party logistics service's competency is also critical to the shipper or manufacturer of pharmaceuticals and medications that utilize it. Due to the lack of direct management, the shipper has to work with an outside logistics agency. Due to their lack of oversight, producers are putting their product's quality at danger. Due to shippers' lack of control over logistics services, the global biopharmaceutical third-party logistics market development is stymied.
As a direct result of greater globalization, an expansion of many different trade-related activities has taken place. As a result, wholesalers and manufacturers have a hard time maintaining accurate records of these operations in a timely manner. Businesses offer assistance to manufacturers in this regard by helping them maintain accurate records of their control over these activities. In addition to this, the growth of the global market is a significant factor that is propelling the biopharmaceutical third-party logistics industry forward. As a direct consequence of this, increasing globalization and commercial exchange activities are providing support for the expansion and growth of the global biopharmaceutical third-party logistics market.
The global biopharmaceutical third-party logistics market share is divided into different segments according to the Supply Chain, Service Type, and Region.
By Supply Chain, the global biopharmaceutical third-party logistics market is segmented into Cold Chain and Non-cold Chain. In 2021, non-cold chain logistics accounted for more than 75% of global revenue due to rising pharmaceutical distributor sales. 3PL services give more scalability, and higher visibility decreases operational costs and helps build a stronger logistics network with higher returns and fewer risks. Therefore, pharmaceutical businesses use 3PL as part of their business strategy. Another element driving the non-cold chain segment's growth is the increased number of SKUs per distributor that do not require temperature control transportation, unlike biologics.
The cold chain is expected to have the highest CAGR over the projection period. This is due to the increased demand for biologics, a novel class of medications that has grown rapidly in recent years. These pharmaceuticals require temperature and time-controlled distribution, but the market has seen other precision medicine breakthroughs, including as biomarker testing, cellular therapies, blood products, specific vaccines, and regenerative medicine in the form of stem cells.
Currently, the temperature during transport is regulated via temperature data loggers affixed to shipments. Advances in data recorders that can measure vibration, humidity, temperature, and shock are expected to boost demand. The logistics businesses are also employing RFID hardware and software to obtain information easily. Continuing advances and increased investment in temperature control technologies will propel the cold chain industry.
By Service Type, the global biopharmaceutical third-party logistics market is segmented into Transportation, Warehousing & Storage, and Other Services. The warehouse and storage segment accounted for more than 45% of global sales in 2021. The pharmaceutical and healthcare industries demand a lot of 3PL services. Life sciences firms use 3PL to cut operating costs and overhead. Due to increased demand, service providers have added warehousing and packaging to their products.
To save bother and turnaround time, providers use barcode scanners and robots to pick and position merchandise from far away. Others will have the highest CAGR over the projection period. Packaging, custom & duty management, procurement, and other value-added services are covered. Packaging is a key feature of pharmaceutical logistics because the transfer of pharmaceuticals relies on it more than on storage facilities.
Pharmaceutical firms focus on purity, homogeneity, shelf life, integrity, and packaging standard of their medicines. So, the market should grow in the forecast time. 3PLs providing value-added services is another industry driver. Expeditors, a provider of simple to complicated value-added services, offers a range of logistics delivery models that improve customer service and save transport and inventory costs.
By Region or Geography, the global biopharmaceutical third-party logistics market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. In 2021, North America dominated the global market with more than 45% of global sales. This is due to the region's dominance in the biologics and pharmaceutical drug markets and increased exports and imports of biopharmaceuticals. Due to increasing healthcare costs, innovative technologies are often used.
Growing demand for pharmaceuticals among an aging population, acceptance of technologically enhanced services, and economic situations in rising countries like China and India are among its fastest-growing elements. A rise in diseases is also driving demand for biologics and drugs. Due to the significant number of type 2 diabetes patients in Asia Pacific, insulin demand is considerable.
The global biopharmaceutical third-party logistics market is segmented by geography into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
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In 2021, the market in North America was the most lucrative and held the largest share, accounting for more than 42.0 percent of the total revenue generated worldwide. This is primarily attributable to the region's dominant position in the market for biologics and pharmaceutical medications as well as an increase in the number of biopharmaceuticals that are shipped out of and brought into the region. In addition, because of the high cost of medical treatment, the region has a relatively high rate of implementation of various cutting-edge technology. As a result, pharmaceutical businesses situated in North America are increasingly depending on third-party logistics (3PL) service providers for the purpose of improving warehousing and transportation, which is driving the expansion of the region. Additionally, the presence of big companies in these locations is another factor that contributes to the largest market share for this product. Over the course of the projected period, it is anticipated that Asia Pacific would see the highest CAGR.
In the Asia-Pacific region, there are a few variables that are responsible for its fastest growth, and some of those elements include an increasing need for pharmaceuticals among an ageing population, the adoption of technologically enhanced services, and the developing economic conditions in emerging countries like China and India. In addition, the fact that there will be an increasing number of patents that will run out in the next years indicates that there will be a significant change in the market share of medicine sales away from the original brand manufacturer and toward generic ones. It is projected that the sales of pharmaceutical items, as well as their import and export, will increase as a result of this aspect. The demand for pharmaceuticals and biologics is being fuelled in part by the prevalence of an increasing variety of ailments. For instance, because of the high prevalence of type 2 diabetes patients throughout Asia-Pacific, there is a greater need for insulin in those regions.
By Supply Chain
By Service Type