Pharmaceutical 3PL Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Pharmaceutical 3PL Market is segmented by Function (Domestic Transportation Management, International Transportation Management, and Value-added Warehousing and Distribution), Supply Chain (Cold Chain and Non-cold Chain), and Geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa). The report offers the market size and forecasts in value (USD billion) for all the above segments.

Market Snapshot

Global Pharmaceutical 3PL Market  Growth
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: >7 %

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Market Overview

The biopharmaceutical 3PL market is expected to register a CAGR of more than 7%. The rising trend of outsourcing logistics, the focus of pharmaceutical players on their distribution networks due to their strong sales numbers, and the rise in the number of biosimilar launches are some of the key factors driving the market.

The COVID-19 outbreak also had a major impact on global logistics in part due to reduced air freight capacity and reduced workforce at airports, ports, and warehouses. Small players in the biopharmaceutical third-party logistics market were hit severely as they usually do not have any recovery, backup, or intermittent operation plan.

Technological advancements are also one of the key factors driving the adoption of temperature management logistic services. Technologies such as warehouse robotics, mobile cloud solutions, data mining, and real-time monitoring have changed the overall logistics industry to a great extent. According to a global survey carried out in July 2021, cold chain services are important to third-party logistics providers (3PLs). More than 62% of 3PL service providers believe cold chain services are critically important for the future growth of their business.

Scope of the Report

Pharmaceutical 3PL refers to the safe and efficient delivery of pharmaceutical drug products to benefit patient health. The pharmaceutical 3PL market is segmented by function (domestic transportation management, international transportation management, and value-added warehousing and distribution), supply chain (cold chain and non-cold chain), and geography (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa). The report offers the market size and forecasts in value (USD billion) for all the above segments.

Function
Domestic Transportation Management
International Transportation Management
Value-added Warehousing and Distribution
Supply Chain
Cold Chain
Non-cold Chain
Geography
North America
United States
Canada
Mexico
South America
Brazil
Argentina
Rest of South America
Europe
United Kingdom
Germany
France
Russia
Spain
Rest of Europe
Middle-East and Africa
Saudi Arabia
United Arab Emirates
Qatar
South Africa
Rest of Middle-East and Africa
Asia-Pacific
India
China
Singapore
Japan
South Korea
Vietnam
Australia
Rest of Asia-Pacific

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Key Market Trends

Growth in Demand During the Pandemic

In 2020, the warehousing and storage segment dominated the market for biopharmaceutical third-party logistics (3PL) and held the largest revenue share of 43.6%. This is attributed to a large demand for 3PL services from the pharmaceutical and healthcare industries. To reduce the operating costs and the company’s overheads, the life sciences companies are opting for third-party logistic services.

With a surge in demand, the service providers have enhanced their offerings with many value-added services, such as warehousing and packaging. Moreover, to minimize the hassle and reduce the turnaround time, the providers have installed barcode scanners and robots for picking and aligning the products from distant locations.

Pharmaceutical companies pay a lot of attention to packaging quality in terms of purity, uniformity, shelf-life, integrity, and packaging standard of their products. This is expected to boost the market over the forecast period. The 3PL service providers are investing a lot in providing value-added services, which is another key market driver. For instance, Expeditors, a service-based provider of value-added services ranging from simple to complex, offers a range of logistics delivery models that enhance customer services while mitigating transportation and inventory costs. Growing pharmaceutical industries are also driving the market. According to industry sources, in 2021, most of the demand was generated from North America (mainly from the United States), followed by Europe, Africa, and Asia-Pacific.

Region-Wise Revenues of Global Pharmaceutical Markets

Top Regional Markets

North America dominated the biopharmaceutical third-party logistics (3PL) market and accounted for the largest revenue share of 41.5% in 2020. This is majorly attributed to the dominance of the region in the biologics and pharmaceutical drugs market and an increase in exports and imports of biopharmaceuticals.

Furthermore, owing to high healthcare expenditure, the adoption of advanced technologies is quite high in the region. Thus, for the improvement of warehousing and transportation, North America-based pharmaceutical companies are relying more on 3PL service providers, which is driving the regional growth. Additionally, the presence of major players is also responsible for the growth of the market for biopharmaceutical third-party logistics (3PL) in the region.

Moreover, in Asia-Pacific, the market for biopharmaceutical third-party logistics (3PL) witnessed the second-largest revenue of USD 15.4 billion in 2020, and it is also expected to witness the fastest CAGR of 7.2% over the forecast period. The growing demand for medicines among the aging population, adoption of technologically advanced services, and growing economic conditions in emerging countries such as China, Japan, and India are among the few factors responsible for its fastest growth rate.

Furthermore, due to the increased demand for healthcare, the pharmaceutical sector continues to grow, in turn, resulting in the growth of the 3PL market. Global pharmaceutical sales grew by 7.7% in 2021. In addition, in 2021, established markets saw an average revenue increase of 6.4%, and emerging markets' revenue grew by 11.9%. The United States, Japan, China, Germany, and France are the world’s top five pharmaceutical markets in terms of 2021 sales. In 2021, the United States had 46.8% of global sales.

World Pharmaceutical Sales

Competitive Landscape

The market for biopharmaceutical third-party logistics (3PL) is fragmented, with the presence of a large number of players. This fragmentation causes hindrances for big players to enter a few countries across the world. Thus, the big players are undergoing consolidation that will help them accept modern technologies from small or regional players and expand their global presence.

Companies such as FedEx, DHL, and DB Schenker are a few of the renowned companies in the pharmaceutical 3PL market across the world.

Recent Developments

February 2022: DHL Supply Chain (the global and North American contract logistics leader) announced that its Life Sciences and Healthcare (LSHC) sector is investing upward of USD 400 million to expand its pharmaceutical and medical device distribution network footprint by 27%, with 3 million additional square feet. This investment includes six new US sites by the end of 2022.

January 2021: XPO Logistics Inc. is continuing its strategy to consolidate third-party logistics (3PL) services, saying it has now finalized its previously announced acquisition of the majority of Kuehne + Nagel's contract logistics operations in the United Kingdom and Ireland.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Technological Trends

    3. 4.3 Government Regulations and Initiatives (Related to Transportation and Storage of Pharmaceutical Products)

    4. 4.4 Impact of COVID-19 on the Market (Including Short-term and Long-term Effects on the Market and the Economy)

    5. 4.5 Pharmaceutical E-commerce Market (Market Trends and their Impact on Logistics/Delivery Market)

    6. 4.6 Spotlight on Packaging of Pharmaceuticals (Global and Regional Trends)

    7. 4.7 Industry Supply Chain/Value Chain Analysis (includes Analysis on Distribution Models and Key Players in each step of the Value Chain)

    8. 4.8 Insights into Reverse/Return Logistics in the Pharma Industry

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

    4. 5.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 5.4.1 Bargaining Power of Suppliers

      2. 5.4.2 Bargaining Power of Consumers

      3. 5.4.3 Threat of New Entrants

      4. 5.4.4 Threat of Substitutes

      5. 5.4.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION (Market Size by Value)

    1. 6.1 Function

      1. 6.1.1 Domestic Transportation Management

      2. 6.1.2 International Transportation Management

      3. 6.1.3 Value-added Warehousing and Distribution

    2. 6.2 Supply Chain

      1. 6.2.1 Cold Chain

      2. 6.2.2 Non-cold Chain

    3. 6.3 Geography

      1. 6.3.1 North America

        1. 6.3.1.1 United States

        2. 6.3.1.2 Canada

        3. 6.3.1.3 Mexico

      2. 6.3.2 South America

        1. 6.3.2.1 Brazil

        2. 6.3.2.2 Argentina

        3. 6.3.2.3 Rest of South America

      3. 6.3.3 Europe

        1. 6.3.3.1 United Kingdom

        2. 6.3.3.2 Germany

        3. 6.3.3.3 France

        4. 6.3.3.4 Russia

        5. 6.3.3.5 Spain

        6. 6.3.3.6 Rest of Europe

      4. 6.3.4 Middle-East and Africa

        1. 6.3.4.1 Saudi Arabia

        2. 6.3.4.2 United Arab Emirates

        3. 6.3.4.3 Qatar

        4. 6.3.4.4 South Africa

        5. 6.3.4.5 Rest of Middle-East and Africa

      5. 6.3.5 Asia-Pacific

        1. 6.3.5.1 India

        2. 6.3.5.2 China

        3. 6.3.5.3 Singapore

        4. 6.3.5.4 Japan

        5. 6.3.5.5 South Korea

        6. 6.3.5.6 Vietnam

        7. 6.3.5.7 Australia

        8. 6.3.5.8 Rest of Asia-Pacific

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Overview (Market Concentration and Major Players)

    2. 7.2 Company Profiles

      1. 7.2.1 DHL

      2. 7.2.2 FedEx

      3. 7.2.3 UPS

      4. 7.2.4 Kuehne + Nagel

      5. 7.2.5 DB Schenker

      6. 7.2.6 Nippon Express

      7. 7.2.7 Ceva Logistics

      8. 7.2.8 Kerry Logistics

      9. 7.2.9 Agility

      10. 7.2.10 XPO Logistics

    3. *List Not Exhaustive
    4. 7.3 Other Companies (Overview/Key Information)

  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

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Frequently Asked Questions

The Pharmaceutical 3PL Market market is studied from 2018 - 2027.

The Pharmaceutical 3PL Market is growing at a CAGR of >7% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

DHL, FedEx, UPS, DB Schenker, Kuehne +Nagel are the major companies operating in Pharmaceutical 3PL Market .

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