Pharmaceutical Warehousing Market Size 2024-2028

The pharmaceutical warehousing market size is estimated to increase by USD 14.50 billion, at a CAGR of 4.36% between 2023 and 2028. The market for pharmaceutical warehousing services is experiencing substantial growth due to increasing outsourcing requests. This trend is primarily driven by pharmaceutical manufacturers expanding their production capacities and global footprint. As these companies scale up, there is a heightened demand for logistics services from retailers and distributors, aimed at effectively managing storage for both raw materials and finished goods. Technological advancements, including RFID tags and RF-directed inventory management systems, optimize inventory control and traceability, enhancing efficiency and accuracy throughout the supply chain. This underscores the critical role of efficient warehousing in supporting the seamless flow of pharmaceutical products through supply chains. By outsourcing warehousing, manufacturers can focus on core operations while benefiting from specialized storage solutions that ensure compliance, security, and optimal inventory management. This evolving landscape reflects a strategic shift towards enhancing operational efficiency and meeting growing global demand within the pharmaceutical industry.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

By Application

The market share growth of the pharmaceutical factory segment will be significant during the forecast period. Pharmaceutical warehouses are located in provinces and provide products to pharmacies as soon as they are needed. Additionally, these organizations that send medicines to medical facilities continue to grow in the pharmaceutical field. Pharmaceutical warehouses store or stock numerous products such as tablets, syrups, vaccines, medical devices, OTC products, diagnostic products, and diet products. This segment held the largest market share in 2022, and it is expected to continue to increase its market share during the forecast period.

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The pharmaceutical factory segment was valued at USD 22.62 billion in 2018. Pharmaceutical factories develop, manufacture, and market pharmaceutical drugs for use as medications to be administered to patients (or self-administered) to cure, immunize, or alleviate symptoms of various diseases. A pharmaceutical factory may manufacture generic or branded drugs, as well as medical devices. They are governed by several laws and regulations related to drug patenting, testing, safety, efficacy, and marketing.

By Regions

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APAC is projected to contribute 57% by 2028. Another region offering significant growth opportunities to companies is North America. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America will grow steadily during the forecast period. This market is nearing maturity in North America. The North American pharmaceutical market is largely dominated by the US. This is because of an increase in the development of new pharmaceutical drugs in the US. This development encourages various clinical trial supply and logistics companies to expand their existing distribution channels in North America. The rising prevalence of chronic diseases, an aging population, and a shift toward home-based treatment in the US are some of the factors influencing the growth rate of the market in the country. In 2020, the US accounted for 68%-73% of the market volume in North America. In 2020, the US had 156 million cubic meters of cold storage and was the largest country for refrigerated warehouses used for various purposes, including pharmaceuticals. 

Market Dynamics and Customer Landscape

The market is driven by stringent regulatory standards enforced by bodies like the Food and Drug Administration (FDA), ensuring adherence to Current Good Manufacturing Practice (CGMP) standards. This necessitates temperature-controlled warehousing and monitoring equipment to maintain product integrity, especially for cold chain products like vaccines. Moreover, there's a growing demand for Over-the-Counter (OTC) and supplement medications, prompting the need for efficient warehousing and distribution networks to cater to consumer preferences for self-medication. System integrator and intermediaries play a pivotal role in logistics optimization, utilizing advanced tools to ensure timely delivery to licensed healthcare providers and end-users, driving the market's growth in line with the expanding healthcare landscape. 

Key Market Driver

The market is experiencing substantial growth due to the increasing demand for outsourcing pharmaceutical warehousing services. This trend is primarily driven by pharmaceutical manufacturing companies expanding their production capacities and operations globally. As these companies scale up, there's a heightened need for logistics services among retailers and distributors to store raw materials and finished goods efficiently. Outsourcing warehousing services offers significant cost savings, including reductions in logistics, inventory, and fixed asset costs, further incentivizing companies to leverage third-party providers.

Moreover, the complexity of supply chain management (SCM) in the industry has led manufacturers to outsource certain SCM functions to specialized warehouse and storage service providers. These providers offer value-added services such as high-pressure processing post-packaging and non-thermal pasteurization methods to ensure product safety during transportation. The demand for efficiency, visibility, and product safety is pushing cold chain third-party logistics (3PLs) to offer a wider range of value-added services. Consequently, the market for outsourcing warehousing is expected to witness sustained growth as companies prioritize operational efficiency and compliance with regulatory standards.

Significant Market Trend

Increased provision of end-to-end integrated services is the primary trend driving the market growth. Several cold chain service providers have now started offering end-to-end integrated services to end-users in the market. They are providing cold chain management services to customers and participating in their decision-making processes. Many service providers offer end-to-end cold chain management services like inventory management, order scheduling, order forecasting, warehousing, and delivery management.

Moreover, disaster recovery services that enable customers to track consignments and help them communicate with the entire supply chain are also offered by companies. In addition, some companies provide training sessions for all the personnel involved in the cold chain logistics network. Thus, the increase in the provision of end-to-end integrated services by companies is a key trend that is expected to have a positive impact on the market during the market forecast period. 

Major Market Challenge

Lack of efficient logistics support in emerging economies is the major challenge impeding the market growth. An efficient logistics support system can reduce the chances of product recalls and wastage of the products, which results from drawbacks in the cold chain logistics for these products. However, many companies receive only minimal logistics support.

Further, cold chain logistics begins with transferring pharmaceutical products from the manufacturer to the end-user and involves continuous point-to-point handling of these goods between the different intermediaries. It also involves inter-state and inter-region transit of these items or products. companies in this market are, therefore, obliged to comply with stringent government regulations present in the regions of transit. Any anomaly in the cold chain process could result in the cold chain logistics process becoming ineffective, leading to the wastage of pharmaceutical products. Hence, the lack of efficient logistics support is proving to be a hindrance to the market's growth. 

Key Market Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Market Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Deutsche Post AG - The company operates under multiple segments, including Express, Global Forwarding, Freight, Supply Chain, eCommerce Solutions, etc., with a high focus on the Express segment. The company offers pharmaceutical warehousing such as life sciences products warehousing.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:

• CJ Logistics Corp.
• CMA CGM SA
• DACHSER SE
• DB Schenker
• EFW Warehousing LLC
• FedEx Corp.
• GEODIS SA
• Hellmann Worldwide Logistics SE and Co KG
• KRC Logistics
• Kuehne Nagel Management AG
• NFI Industries
• Penske Truck Leasing Co. LP
• PSA International Pte Ltd.
• United Parcel Service Inc.
• XPO Logistics Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Application Outlook
  • Pharmaceutical factory
  • Pharmacy
  • Hospital
• Service Outlook 
  • Non-cold chain warehousing
  • Cold chain warehousing
• Region Outlook
  • APAC
    • China
    • India
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • South America
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is critical in ensuring temperature-controlled storage for temperature-sensitive medications across cold-chain warehouses and non-cold chain warehouses. It supports pharmaceutical supply chains and logistics chains by providing controlled environments essential for storing finished products like OTC medications and treatments for chronic diseases such as diabetes and cancer. Despite challenges like lack of standardization and poor infrastructure, the industry is advancing with technological growth and the adoption of blockchain technology to enhance reverse logistics and last-mile delivery. Professional opinions and industry statements highlights the importance of product literature and segmental analysis to optimize pharmaceutical warehousing modes and meet global regulatory standards effectively.

Additionally, the market plays a crucial role in the pharmaceutical supply chain by providing controlled environments essential for storing medications used in treating chronic diseases like diabetes and cancer. It serves hospitals, clinics, and pharmaceutical companies, facilitating temperature-controlled logistics to ensure the integrity of products throughout the logistics chain. Companies are expanding their operations to meet the increasing demand, enhancing production capacities, and optimizing pharmaceutical warehousing modes to maintain product efficacy from the port of origin to final destination. Perspectives on industry trends highlight the importance of strategic expansions and efficient contract management in meeting global healthcare needs.

Moreover, the pharmaceutical warehousing mode, particularly in cold chain warehouses, plays a crucial role in maintaining controlled environments essential for storing medications critical for chronic diseases in hospitals and clinics. Regional variations in pharmaceutical warehousing practices underscore the need for stringent controls and contracts to ensure the integrity of enzymes and the reliable increase in production. Such factors will increase the market growth during the forecast period.

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What are the Key Data Covered in this Market Forcast Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market's competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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