Pharmaceutical logistics market to grow, Canadian companies key players
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The global pharmaceutical logistics market is projected to grow from US$93.23 billion in 2023 to US$140.83 billion by 2029, at a compound annual growth rate (CAGR) of 7.09 per cent.
This growth, according to a report from TechSci Research, is driven by increasing demand for efficient supply chain solutions, advancements in technology and the rising prevalence of temperature-sensitive products like biologics and biosimilars.
The report also says Canadian companies like VersaCold and Air Canada are key players in pharmaceutical logistics, and that North America dominates the market because of its advanced infrastructure, including well-developed transportation networks and state-of-the-art cold chain facilities, which enhances logistical efficiency.
Rising demand for pharmaceuticals
Aging populations and the growing prevalence of chronic diseases are pushing pharmaceutical companies to enhance supply chain efficiency. This heightened demand underscores the importance of specialized logistics services, such as temperature-controlled transportation and secure storage, to ensure medications are delivered promptly and safely.
For example, MD Logistics, a subsidiary of Nippon Express Holdings, announced in September 2024 the transformation of an 18,500-square-metre warehouse in Indiana into a state-of-the-art facility focused on life sciences and pharmaceuticals. This investment reflects the increasing need for logistics infrastructure tailored to the pharmaceutical sector.
E-commerce expansion
The rise of online pharmacies and direct-to-consumer models is reshaping the logistics landscape. Accelerated by the COVID-19 pandemic, this trend has increased demand for advanced supply chain solutions capable of managing real-time tracking, order fulfillment and last-mile delivery.
In 2022, Agility Logistics merged its digital freight forwarding division, Shipa Freight, with Barcelona-based iContainers. This move aimed to strengthen Agility’s digital logistics capabilities, streamline operations, and expand its reach, particularly in Europe. Such developments highlight the growing emphasis on technology and infrastructure investments to meet consumer expectations in a rapidly evolving e-commerce environment.
Technological advancements
Automation, artificial intelligence (AI) and the Internet of Things (IoT) are revolutionizing pharmaceutical logistics. These technologies enhance efficiency, reduce costs and improve service delivery. IoT-enabled devices provide real-time tracking of shipments, ensuring temperature-sensitive products remain within required conditions throughout the supply chain.
Blockchain technology is also gaining traction, offering enhanced traceability and security. This helps stakeholders verify product authenticity and comply with stringent regulatory standards, fostering trust among consumers and healthcare providers.
The rise of biologics and biosimilars
Biologics and biosimilars require highly specialized handling and storage conditions, creating demand for advanced logistics solutions. As the prevalence of chronic diseases grows, pharmaceutical companies increasingly rely on logistics providers capable of managing the complexities of these sensitive products.
Strict regulatory requirements for biologics and biosimilars further drive investment in temperature-controlled transportation and compliance with good distribution practices (GDP).
Temperature control
Maintaining the integrity of temperature-sensitive pharmaceuticals remains a critical challenge. Deviation from required temperature ranges can compromise product safety and efficacy, posing risks to patient health and financial losses for manufacturers. Logistics providers have responded by investing in temperature-controlled transportation, insulated packaging and monitoring systems to track temperatures in real-time.
Sustainability pressure
The pharmaceutical logistics sector faces increasing pressure to adopt sustainable practices. Logistics providers are exploring eco-friendly solutions, including energy-efficient warehousing, optimized transportation routes and biodegradable packaging materials, to reduce their environmental impact. Balancing these sustainability efforts with operational efficiency remains a key challenge, particularly for temperature-controlled logistics.
Regional and segment insights
North America currently dominates the pharmaceutical logistics market due to its advanced infrastructure, presence of major pharmaceutical companies and compliance with stringent regulatory standards. Meanwhile, the Asia-Pacific region is rapidly emerging as a significant player, driven by growing healthcare sectors and rising disposable incomes.
Cold chain logistics has become a dominant segment in the market, reflecting the critical need for maintaining the integrity of biologics, vaccines and other temperature-sensitive pharmaceuticals. Recent health crises, including the COVID-19 pandemic, have further underscored the importance of robust cold chain systems in ensuring the safe delivery of essential healthcare products.
Future outlook
The global pharmaceutical logistics market is set to evolve as stakeholders navigate regulatory requirements, technological advancements and sustainability challenges. Continued investment in infrastructure, technology and innovative solutions will be essential for ensuring the timely and safe delivery of medications, ultimately supporting patient health worldwide.
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