The 3PL market is predicted to experience exponential growth in the healthcare sector. The continuous evolution of technology and increased requirement for shipping healthcare products will ensure this growth continues steadily. Here’s an overview of how third-party logistics impacts the healthcare industry and what the future looks like.
The third-party logistics market size for the healthcare industry has been exponentially expanding. There is a growing trend among healthcare companies to outsource the logistical part of their operations. In turn, the logistics companies gather information from the wholesalers, manufacturers, retailers, and suppliers. Third-party logistics (3PL) companies use this information for seamless operations, leading to tremendous growth. The introduction of various automated technologies to retrieve and store pharmaceutical products garner a lot of interest in using 3PL companies.
What is Healthcare 3PL Logistics Market
Electronic commerce or eCommerce is the act of buying and selling products on an online platform. The onset of the pandemic has hastened the growth of the eCommerce industry and resulted in its astronomical growth. A recent addition to the eCommerce market is healthcare products. Nowadays, consumers demand that their healthcare products be delivered at their convenience. Consequently, healthcare industries are outsourcing their logistics requirements to concentrate on other aspects such as production, sales, and marketing.
Third-party logistics companies have various advantages, enabling them to expand into the healthcare market. Moreover, globalization has made healthcare options available worldwide and has, in turn, increased opportunities for the expansion of 3PL companies. They provide services such as freight forwarding, packaging, and warehousing that have helped healthcare companies fulfill their orders seamlessly.
Third-party logistics for healthcare companies is crucial in logistics and healthcare services. Logistics for healthcare services require transporting, warehousing, and distributing pharmaceutical products, various medical equipment, and other accessory medical products. Being cost-effective, on-time, and providing strict quality measures are key factors for the healthcare industry. For their clients in healthcare industries, 3PL companies provide services such as cold-chain equipment for products that must be stored at a specific temperature. Other services offered include inventory management and providing end-to-end solutions for supply-chain issues.
The success of 3PL industries in the healthcare sector can be attributed to various factors, such as online medicines and the demand for personalized healthcare products. The introduction of automation and live tracking technologies has made it possible for healthcare brands to outsource their logistics requirements.
Healthcare 3PL Logistics Market Insights
The healthcare sector of the third-party logistics market is a critical link to providing medical and pharmaceutical services such as collecting, transporting, keeping these products in appropriate warehouses, and eventually distributing these products. These 3PL providers tailor their services according to the industry, service type, and supply chain requirements. Let’s look at these individually in the next section.
• Insights on the Industry
The 3PL industry is a key player in the healthcare industry. It fulfills crucial logistics requirements, including distributing medical equipment, medicines, and other pharmaceutical products. Big logistics companies catering to multiple industries have forayed into this sector. Likewise, other companies have specifically tailored their services around healthcare companies and cater to the unique requirements of this industry. A few factors have led to the growth spurt of 3PL services in this industry. The requirement for distribution of these healthcare products worldwide, the introduction of strict regulatory compliance, and healthcare supply chains becoming more and more difficult to maintain are just a few of these growth factors. These logistics companies have introduced real-time product tracking and instruments to maintain temperature-sensitive materials, thus endearing them to healthcare companies.
• Insights on the Service Type
The 3PL companies provide services for the healthcare industry, including storage and warehousing, transporting, sea and air freight, and overland transporting. Needless to say, each healthcare company has its unique requirements, and the logistics provider tailors them accordingly. Each of these services is customized based on the product being distributed. For example, the logistics provider ensures that their warehouse meets the specific standards required to house the distributed healthcare product. The 3PL providers also offer value-added services such as product assembly, returns management, and kitting. They ensure that they meet the relevant regulatory standards and that the operation is efficient, smooth, and timely. Since some of the customers these healthcare companies cater to include hospitals, nursing homes, and individual patients, time and quality are of the essence.
• Insights on Supply Chain
One major outsourcing that healthcare companies do is for their cold-chain requirements. The various regulations around cold chain products and the criticality of maintaining a specific temperature have made outsourcing a boon. Apart from cold chain requirements, 3PL companies handle various supply chain orders. For example, acquiring raw materials, storing, and distributing them. There is a lot of planning and on-point execution involved in these processes. They have to ensure that the product meets the standards throughout the process, is stored according to the specifications, and is distributed promptly to the customers. Many 3PL companies use advanced technologies such as Internet of Things (IoT) devices, Radio Frequency Identification (RFID) tracking, and blockchain to give their customers more visibility of their product status in real-time and thus provide transparency of the process. To meet supply chain requirements effectively, these companies collaborate with the relevant regulatory authorities to ensure compliance at every production stage.
Healthcare 3PL Logistics Market Latest Developments
The following were the recent developments in the third-party logistics field of the healthcare industry:
- November 2022: The announcement of a new life science division was made by the Kenco Group. This division aims to expand its supply chain, distribution, material handling, and transporting services.
- March 2023: DB Schenker, a German retail and logistics company, opened a new warehousing at the Schiphol Airport in Benelux. This warehouse will house healthcare-related products.
- November 2023: A new software company known as ‘Symphony’ was opened by United Parcel Service of America, Inc. This new company will integrate various supply chain components, such as warehousing, shipping, and inventory management, in one cohesive platform.
- February 2024: FedEx opened its FedEx Life Science Centre in Mumbai, India. This center will support the storage of clinical trial products and fulfill the healthcare requirements of customers in India and abroad.
- May 2024: Kuehne Nagel opened a new service in Europe for road logistics. This service will transport medical equipment to several countries, including France, Italy, and Germany.
Conclusion:
The demand for healthcare products to be available online has increased rapidly during the pandemic. Therefore, healthcare companies regularly outsource their logistics requirements. To meet these requirements, logistics companies ensure that they have cut-throat technologies and are always aware of current regulations. Their fast, transparent, and real-time approach contributes to the enormous success of online healthcare brands. With more and more customers preferring online shopping, this trend will not dwindle anytime soon.
So, to focus on your healthcare brand, if you want to partner with a third-party logistics provider for competitive retail fulfillment, contact with XPDEL
About XPDEL:
XPDEL helps eCommerce brands accelerate their growth, empowering them with multi-channel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and Retail. Guided by these experts, we provide customer experiences that help you grow your business.
