3PLs: From Resilience to Sustainability

Third-party logistics providers (3PLs) have an essential role in the pharmaceutical supply chain: handling the logistics of certain products that are unable to be accomplished by a manufacturer, distributor, or dispenser, whether that be due to lack of resources, cost, product complexity, or other reasons.

For the second consecutive year, Pharmaceutical Commerce sought to uncover the most pressing issues impacting pharma 3PLs—this time in 2025—while also investigating how the COVID-19 pandemic has affected the market’s current climate and may impact its future outlook through 2035.

Those interviewed include:

• Veronique Dameme, Global Head of Vertical Market Healthcare, DB Schenker
• Scott Szwast, VP of International Strategy, UPS
• Joel Wayment, Vice President/General Manager, Cardinal Health Third-Party Logistics and Packaging Solutions
• Danny Williams, President, Channel Management, EVERSANA
• Chris Armstrong, Vice President and General Manager, McKesson Third-Party Logistics

The following roundtable-style discussion has been edited for length and clarity.

Pharma Commerce: Could you provide a general overview of how the third-party logistics process works?

Scott Szwast

Scott Szwast: Now more than ever, a company is only as good as its supply chain. For some companies, a well-run third-party logistics solution can be the fastest path to reducing costly inventory, shortening the net trade cycle, and significantly reducing capital expenses.

However, this approach is not “one size fits all,” and it is certainly not a passive endeavor. Success relies upon driving economies of scale through the deployment of optimized multi-client operations, which enable client companies to benefit from infrastructure and technology investments, procurement experience, and capacity advantages that they would not be able to attain independently. It also allows for a turnkey solution that flexes when and where business conditions need it to, with coverage and capabilities already in place to enable accelerated growth. It all begins with collaboration. Partnering effectively means we can help companies move beyond seeing their supply chains as cost centers, rather than a strategic resource.

Chris Armstrong

Chris Armstrong: Third-party logistics offers a complete range of supply chain management services for biopharma that are adaptable and scalable to help businesses swiftly respond to market demands. One critical element in partnering with a 3PL is the ability to maintain compliance with constantly changing laws and regulations, which can pose a significant challenge for manufacturers at launch. An ideal 3PL partner offers efficient and cost-effective solutions to assist companies that lack the infrastructure to handle warehousing, distribution, and order management.

Q: What factors should manufacturers consider when selecting a 3PL, and what array of services should a quality 3PL provide?

Danny Williams

Danny Williams: When manufacturers consider selecting a 3PL partner, I suggest a careful assessment to ensure they have the right partner to meet their specific goals and their customers’ needs. Having a partner that can operate free of conflict provides great flexibility in providing solutions unique to a specific manufacturer or their specific product.

That said, the tenets of speed, scale, and certainty come to my mind. First, speed comes from having a true partner that the manufacturer trusts and a provider that can quickly deploy the resources needed to implement the manufacturer’s program. Second, scale should be viewed as not only the provider's infrastructure and technology, but also its personnel. Is that 3PL right-sized for today’s manufacturer? What happens if growth comes faster than planned? What about future products in the portfolio or indications of the product?

Companies should seek out a provider that can offer tangible evidence through long-standing relationships with other manufacturers that have proven to grow with them.

Certainty is third. Will the provider deliver with confidence? What does their track record of success in launching products look like? What about launching new companies into the marketplace? Are the regulatory and quality controls in place? Are their operations resilient? Is the management team entrenched and engaged with the day-to-day, as well as with the manufacturers they serve?

While 3PL services in the pharmaceutical industry have been around for decades, the successful 3PL partner of today is more than just a service provider. They are a business collaborator that aligns with the manufacturer’s goals.

Veronique Dameme

Veronique Dameme: Manufacturers should consider factors such as providers' expertise, technology, compliant processes, and geographic footprint. Their choice should be driven by patient well-being, along with the 3PL provider's ability to maintain the integrity of the product from end to end. This includes ensuring on-time, in-full delivery in the right conditions, as there is a patient at the end of the supply chain. Account management and training programs in place are also critical. Their portfolio of services should include inventory management, order fulfillment, transportation, freight management, customs, tracking, and reporting capabilities in a GxP (good practice)-compliant network.

Joel Wayment

Joel Wayment: When considering a 3PL provider, organizations should consider one with a strong focus on the customer experience. Selecting a 3PL that thinks through the customer lens is crucial to ensure your business is represented in a way that aligns with your company’s mission and vision. Biopharma organizations should also assess things like the provider’s integrated packaging solutions, expertise in organization and leadership, and the nuanced capabilities a product may require. It’s important to ensure your provider has the facilities, equipment, capabilities, and specialized knowledge to scale and grow.

Q: Although we’re about five years removed from its onset, what valuable lessons did you learn during the COVID-19 pandemic that have helped improve efficiencies?

Szwast: During the pandemic, we saw how serious impacts on supply chains can be fully outside a company’s control. Taking a multi-modal approach isn’t just a good bet against managing disruption and risk; it also allows for the reality we’re all facing, as more fragile, complex, and temperature-sensitive treatments hit the market.

To make that work, however, you must have control and visibility. We have access to more data than ever before, but do you have the transportation and storage capabilities to act on it and vice versa? Less guesswork, less loss, and more deliveries made where they need to be at the right time and temperature. Rethinking supply chains also opens exciting opportunities for the future of patient care. These new levels of agility and resiliency can help spread and improve home health offerings, keeping patients out of clinics and hospitals, improving lab diagnostics for speedier, more accurate treatment plans, and increasing the speed and depth of clinical trials for new products.

Dameme: Lessons from the COVID period include accelerated digitalization, enabling real-time tracking and data-driven decisions; faster transitions from concept testing to implementation for quicker logistics solutions; building more resilient supply chains to withstand disruptions; and enhancing adaptability and agility to react swiftly to changing demands.

Armstrong: Several valuable lessons have been learned that have significantly improved 3PL efficiencies within the market. One of the most critical lessons is the importance of a strong and resilient supply chain infrastructure, which is essential for managing large-scale distribution efforts. The ability to quickly adapt and respond to unprecedented challenges has set a new standard for biopharma 3PL providers, emphasizing the need for flexibility and agility. Undoubtedly, the driving force behind the ongoing expansion of our technological and distribution capabilities is our most crucial asset: our people. Without a team of experienced, dedicated, and passionate professionals, a 3PL’s services mean nothing.

Q: Heading further into 2025, which trends affecting the pharmaceutical industry will 3PLs be on the lookout for?

Armstrong: In 2025, 3PL companies will be on the lookout for several key trends:

1. Advanced cold chain solutions are no longer a competitive advantage but a basic requirement for participating in the 3PL space, given the increasing demand for temperature-sensitive medications. Expect increased attention and focus on cryogenic, frozen, and refrigerated storage capacity.
2. As the regulatory landscape continues to grow more complex, 3PLs must be quick to adapt and expand their compliance capabilities to ensure they meet all necessary standards. The FDA has extended the deadlines and offered exemption waivers for manufacturers [and their 3PLs] to fully meet the Drug Supply Chain Security Act requirements. 2025 will be a big year to ensure pharmaceutical supply chains are fully serialized, traceable, and compliant.

Additionally, service providers must be willing to innovate to meet the unique requirements of personalized medicines, which often involve more intricate logistics and handling processes. These trends will shape the strategies and services of 3PLs to better serve their clients and maintain a competitive edge.

Williams: As 3PLs, our heads are constantly on a swivel. There is so much change that it can be difficult to know where to focus. From changing delivery models due to shifts in retail drug chains, to online pharmacy fulfillment, continued consolidation of buying entities and acquisition of the providers/prescribers, pricing pressures on the manufacturers, ESG initiatives for sustainability, and more, new trends are constant across the industry, and manufacturers are looking to their 3PL partners to help collaborate and determine how to best address them.

In addition, [let’s not forget] the rise of biologics and cell and gene therapies, which will increase the demand for specialized cold chain logistics and highly coordinated support for 3PLs. Advanced technologies such as AI, machine learning, and blockchain will continue to enhance supply chain visibility and security. Sustainability initiatives revolving around reducing carbon footprints and using eco-friendly materials will remain a focus. We also cannot underestimate potential regulatory and market changes due to the arrival of the new administration.

Szwast: The innovation in next-gen treatments is not only transforming the healthcare industry but also its underlying supply chain. Complex goods, including biologic drugs, will make up an ever-growing share of the international healthcare logistics market.

At the same time, these more complex pharma products are being more broadly distributed than ever before, creating a greater need for temperature control, digital visibility, and precisely timed delivery. Thanks to rising global living standards, there are rapidly growing international markets as well as growing home healthcare opportunities, where new channels for pharma distribution will accelerate with the aging population and prevalence of chronic disease. These trends bring ample opportunities, but also new challenges on how to serve that demand effectively and efficiently.

Q: What level of impact do you anticipate 3PLs and their role within the industry having over the course of the next decade?

Dameme: 3PLs will have a significant impact in the next decade and beyond. COVID highlighted their crucial role, and as we face more disruptive events, their ability to ensure resilient, efficient, and adaptive logistics will be essential for global pharma supply chains.

Szwast: Until now, supply chain excellence has been a differentiator and business advantage for those who possess it. Going forward, and especially for healthcare companies, it will be a requirement to be viable in the market. We’re seeing a real shift in debates about “outsourcing vs. insourcing” to more well-rounded assessments, in which combinations of integrated solutions create the most sustainable business and care advantage for patients, companies, stakeholders, and shareholders.

Williams: The need for 3PLs will only strengthen over the next decade as manufacturers seek to make better use of capital to ultimately focus on developing the therapies patients need. The expertise and operational efficiencies 3PLs provide will be of great benefit to manufacturers in a more complex and geographically expanding supply chain.

As 3PLs adopt newer, more advanced technologies, manufacturers and their end customers will benefit from enhanced efficiency and reduced costs. 3PLs also have the potential to facilitate global market expansion and manage international logistic complexities by putting an emphasis on sustainability and implementing eco-friendly practices. Strong partnerships between 3PL providers, manufacturers, and stakeholders will be crucial for addressing industry needs and positioning pharmaceutical manufacturers for success. In the end, a successful partnership is a win for everyone—for the manufacturer, the 3PL provider, and, most importantly, patients in need.

Wayment: 3PLs have the ability to revolutionize the client experience by how well they flex and scale with the biopharma organizations they support. Putting processes in place to review evolving client needs over time will be critical as we operate in a dynamic and rapidly changing environment. 3PLs have the ability to make a positive impact on environmental sustainability, ultimately resulting in keeping patient costs low.

Armstrong: I believe 3PLs will have a significant impact over the course of the next decade and beyond. Market research by Nova One Advisor estimates suggest that the biopharma 3PL market will nearly double over the next 10 years, primarily driven by the increasing demand for specialty therapeutics and personalized medicines. The growing need for expertise and innovation in cold chain logistics will be crucial for long-term success, as these solutions are becoming a fundamental requirement rather than a competitive edge.

Additionally, regulatory challenges are not going away, and 3PLs must be prepared to adapt and flex to ensure continuous and compliant distribution. These factors will position 3PLs as indispensable partners in the pharmaceutical industry, driving efficiency, reliability, and innovation.