Pharmaceutical Logistics Industry Growing Despite Challenges


In 2015, spending in the United States’ logistics and transportation industry totaled $1.48 trillion, roughly eight percent of the nation’s gross domestic product.

An important part of that industry is pharmaceuticals and pharmaceutical logistics. Globally, the pharmaceutical industry does over $1 trillion in business and that number is steadily rising, expected to rise by 41 percent between 2015 and 2021.

While pharmaceutical logistics can safely and effectively get medications to manufactures and customers, there are several problems facing pharma logistics as the industry becomes increasingly complex.

Lack of Coordination: As a global industry, having a coordinated supply chain is important, but this is far from easy. As people are always in need of medications, they may turn to cheaper or fake alternatives if they are available and the authentic brands will be hurt.

Controlling the Temperature: Many pharmaceutical products must be kept at a certain temperature while in transit and can decrease in effectiveness if they are not. A popular method of transportation for pharmaceuticals is through cold-chain logistics. Cold-chain logistics involves transporting of frozen or refrigerated products and this is a growing industry. In 2017, cold-chain logistics was a $13.4 billion industry for pharmaceuticals transportation and has seen steady growth in recent years.

Supply Chain Management: Currently the pharmaceutical industry doesn’t really rely on logistics to handle supply chain management and markets in places like South America and Asia are expected to dominate this aspect of the industry.

Warehouse Management: The growth of the global pharmaceutical market has led to an increase in supplies and the need for more warehouses. While warehouses help house supplies, the need for logistics is becoming more important in this area. If logistics operations are outsourced, this gives a company less direct control over operations, which leads to fears of deteriorating service. The use of IT and management systems are a growing trend in pharmaceutical logistics, but are not at high levels.

As the global pharmaceutical industry continues to grow, so too will the need for effective pharmaceutical logistics. Having a coordinated supply chain is important as is a working method of controlling the temperature of pharmaceutical products when they are transported. As the need for supplies grows, so does the need for warehouses and both supply chain management and warehouse management will have an increased need for logistics in the future.

Depending on your needs, companies such as Kenco is one of many companies that can offer many forms of transportation including LTL freight services, expedited freight services, flatbed freight services and refrigerated freight services as well as rail freight services.


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