Berliner Boersenzeitung - Pharmaceutical logistics in demand as war rattles supply chains

This is where pharmaceutical logistics comes in -- a fast-growing sector in a world where key supply chains have been shaken by war, pandemic and trade chaos.

One of its European hubs is what Germany's DHL calls its health logistics campus near Frankfurt, dedicated to ensuring drugs and other crucial medical products reliably get to where they're needed.

As fears of medicine shortages grow amid the five-week-old Middle East war, its task is to ensure steady shipments to hospitals, pharmacies, labs and other customers across Europe and worldwide.

The company's facility -- the size of 14 football fields, with its roofs covered in solar panels -- is located in Florstadt outside Frankfurt, itself a transport centre in the middle of Europe.

Products passing through the giant site range from insulin capsules and lifestyle drugs to medicated sunblock and drums of sulphuric acid.

Strict temperature controls and workers in protective suits ensure that medicines are handled under sterile conditions and in guaranteed cold chains.

"Our 600 employees are specially trained because they know that, ultimately, the patient is at the end of the supply chain and no errors are allowed," said Katrin Hoelter, head of DHL's logistics division in Germany and the Alpine countries.

As the US-Israeli war against Iran has impacted global shipping, "we are seeing that some customers are requesting increased storage volumes here, which are essential for their production, in order to ensure the availability of raw materials", she told AFP during a visit to the site.

- Super-cold storage -

The fragility of global supply chains remains a constant concern, even though Hoelter said the Florstadt site is less dependent on shipping through the troubled Strait of Hormuz than on the Suez Canal, which remains open.

Despite repeated global crises, the logistics sector continues to expand, as does the drug industry.

According to healthcare data analytics firm Iqvia, the global pharmaceutical market could exceed $2.6 trillion by 2030, driven by the United States as well as major emerging markets.

In the therapeutics sector, cancer and weight management treatments show the highest growth prospects, according to the LBBW bank.

For the DHL Group, also known as Deutsche Post, the logistics business -- particularly in the pharma sector -- is helping to offset losses from the decline in mail and disruptions to trade caused by conflict and tariff wars.

In Florstadt, automated procedures coexist with manual handling at fixed workstations, such as preparing a single contact lens ordered by an optician for a specific patient for further shipping.

Strict safety and hygiene standards are key. Behind the glass of a sterile room, two employees in full protective suits could be seen extracting an insulin component from a large vat to send a test sample to a customer.

"We are able to simulate any regulatory requirements here," said Hoelter.

"This covers all possible temperature ranges," she said, adding that they can be dropped "as low as minus 80 degrees (Celsius) to account for the varying sensitivities of individual products".

- US investment rush -

The first warehouse at the site opened in 2015, dedicated to distributing medications from a laboratory of the pharmaceuticals firm STADA.

It has since grown into a four-building complex with storage capacity for 140,000 pallets and room for more.

DHL plans to invest two billion euros ($2.3 billion) worldwide by 2030 in pharmaceutical logistics, about a quarter of it in Europe.

Half will go to North America, mainly the United States, where European drugmakers are relocating some production in response to President Donald Trump's tariffs and his efforts to lower drug prices.

In five years, the DHL division's revenue is expected to double, reaching 10 billion euros, compared to 84 billion euros for the group last year.

Hoelter said this growth reflects a broader trend among drugs companies to outsource logistics and other work, so that they can "focus on their core businesses: pharmaceutical research and production".

(G.Gruner--BBZ)