Global Biopharmaceutical Logistics Market Expanding

New study shows leading market companies are providing user-friendly shipping, e-commerce, logistics management and visibility tools.

Global Biopharmaceutical Logistics Market Revenue. Source: KOL Opinions, Company Annual Reports, Expert Interviews, Investor Publications, Press Releases & TMR Analysis, 2017.
Global Biopharmaceutical Logistics Market Revenue. Source: KOL Opinions, Company Annual Reports, Expert Interviews, Investor Publications, Press Releases & TMR Analysis, 2017.

Logistics represent a key component in the biopharmaceutical supply chain, according to Transparency Market Research’s new Biopharmaceutical Logistics Market Report Forecast from 2016 to 2024.

TMR says the combination of a dynamic business environment and a more complex supply chain have fueled the demand for a more precise and targeted approach to temperature control. Nations around the world are tightening their regulations to ensure secure and reliable transportation of pharmaceutical shipments. This has compelled key players to explore novel technologies to pace up with international standards.

Spurred by these factors, TMR predicts the global biopharmaceutical logistics market to show a Compound Annual Growth Rate of 6.2% between 2016 and 2024, reaching US$120.7 billion by 2024 from US$70.9 billion in 2015.

Air shipping holds majority share

In terms of modes of transportation, TMR’s report segments into air shipping, sea shipping, road shipping and rail shipping. Air shipping is set to dominate the biopharmaceutical logistics market, in terms of revenue share, however, sea shipping and road shipping are anticipated to garner maximum volume share of the market during the forecast period.

The expansion of the air shipping segment is attributed to air freight being the fastest way of transporting pharmaceutical products with negligible damage or product deterioration, which is desired for transporting temperature-sensitive vaccines and critical biologic drugs. However, air shipping has a limitation of volume which can be transferred, so sea shipping and road shipping will outpace air shipping in volume growth during the forecast period.

Based on type, the report divides global biopharmaceutical logistics into cold chain logistics and non-cold chain logistics. With an estimated share of nearly 80%, the non-cold chain logistics segment emerged dominant in the market in 2015.

With the increasing use of biologics, the demand for cold chain logistics is expected to increase in the coming years, says the report. However, the consistent demand for sophisticated delivery and tracking system is expected to seal non-cold chain logistics segment’s dominance through the forecast period.

Geographic markets

Regionally, the market is dominated by North America and Europe. These nations have a high number of exports and imports for biopharmaceuticals, and also are the first ones to introduce advanced technologies for the betterment of transportation and warehousing in the supply chain.

In terms of challenges, as the global market for clinical trials expands, there are a few obstacles that manufacturers need to be aware of and clear in order to make shipment arrive in an intact state, at the right temperature, and at the right time. TMR says manufacturers and logistics partners need to be dynamic in responding to changes and navigate through geopolitical hurdles to maintain a superior clinical and commercial supply chain.

In developing nations, says TMR, costly biopharmaceuticals going to waste due to lack of emphasis on cold chain supply is a challenge which can be overcome to further propel market growth. For instance, in India, it is reported that close to 25% of vaccines are wasted due to lack of quality supply chain and logistics management system. Improvements planned by the government in introducing more cold storage facilities in India, is likely to boost market growth in this region.

Key companies profiled in the report include FedEx Corp., Ceva Logistics LLC, Amerisource Bergen Corp., Panalpina Group, Kuehne + Nagel International AG, XPO Logistics, Inc., United Parcel Service, Inc., Deutsche Post DHL Group, DB Schenker and C.H. Robinson Worldwide, Inc.

Logistics providers create growth opportunities

TMR notes many logistics providers are making positive strides in the market and are seen enhancing their regional and local presence and expertise. The sound know-hows of logistics providers can help in reducing challenges for pharmaceutical companies especially those running critical trials in emerging markets, or shipping in politically and legally difficult zones. This is also driving the expansion of the global biopharmaceutical logistics market.

Cold chain carriers have invested in devices built into refrigeration units to monitor location and temperature aimed at meeting industry demands. The technology has also enabled drug manufacturers to access relevant data in real time. It also offers increased visibility and the opportunity to prevent or mitigate loss of a critical shipment. The advent of the technology, coupled with recent innovations in packaging, has provided significant impetus to the biopharmaceutical logistics market. Also with the increasing manufacture and usage biological drugs, the demand for biopharmaceutical logistics is expected to get spurred.

High cost poses threat

On the downside, according to TMR, the cost of transporting biopharmaceuticals, especially the ones that are temperature-sensitive and need rapid delivery to destinations, is very expensive. As with companies opting for air transport, they claim air shipping to cost considerably higher than transporting by sea. As fast shipping of highly temperature sensitive biopharmaceuticals is only possible by air transport, it has emerged as a major challenge for the market players. Also, regulatory concerns and region-specific temperature control challenges are posing threats to the global biopharmaceutical logistics market.

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