The Risk Pharma Procurement Teams Are Not Pricing In

Pharmaceutical supply chains are once again being tested by events outside their control.

The ongoing conflict in the Middle East has disrupted both air and ocean freight networks, closing key airspace corridors and forcing widespread rerouting of cargo. In the early phase of the disruption, air cargo activity across the Gulf dropped sharply, with Xeneta data pointing to declines of up to 70–80% on key corridors, alongside tens of thousands of flight cancellations across major hubs such as Dubai, Doha, and Abu Dhabi.

For pharmaceutical companies, this has meant rapidly adapting how temperature-sensitive medicines move across the world, often with little warning and limited room for error.

The consequences are already being felt across global pharma logistics. Airlines have rerouted or suspended services across affected airspace, reducing capacity on critical trade lanes and delaying shipments of time-sensitive drugs, including oncology treatments. In parallel, major ocean carriers have diverted vessels away from high-risk areas such as the Red Sea and Strait of Hormuz, extending transit times and tightening available capacity across global networks.

Logistics providers specialising in healthcare have also been forced to adapt. Alternative routing through secondary hubs, increased use of overland connections, and greater reliance on contingency capacity have all become more common as companies work to maintain continuity for critical shipments.

For cold chain freight, these delays carry a different level of risk.

Pharmaceuticals do not simply arrive late. Longer transit times increase dwell time, raise the likelihood of temperature excursions, and reduce usable shelf life. In some cases, shipments are written off entirely. In others, they arrive with reduced viability, creating downstream risks for distribution continuity and patient access.

This matters at scale. Industry experts estimate that between 10% and 20% of global pharmaceutical trade passes through the Middle East, making the region a critical artery for the movement of medicines worldwide. Disruption at this level does not stay contained. It reshapes trade flows, increases competition for capacity, and introduces new layers of cost and uncertainty across global supply chains.

Even if conditions stabilise, the effects are unlikely to unwind quickly. Industry reports suggest pharmaceutical supply chains could take months to recover, with disruption extending beyond freight into raw materials, solvents, and packaging inputs. For procurement teams, the implication is clear. Volatility is not a short-term event to absorb. It is a structural feature of the market.

Against this backdrop, one question becomes harder to ignore. Are procurement models keeping pace with the reality of the market they operate in?

A model built for stability, operating in volatility

Pharmaceutical procurement has traditionally been built on relationships, and for good reason. In a highly regulated environment, trusted freight forwarders and logistics partners provide consistency, compliance, and a level of assurance that is difficult to replicate.

But relationships alone do not provide full visibility into how the market is moving.

According to a 2026 Xeneta study, 56% of organisations surveyed still operate a primarily relationship-driven procurement model, while 32% adopt a balanced approach and 12% take a fully data- and tool-driven approach. Five years ago, relationship-led procurement stood at 79%, showing a shift towards more data-driven strategies – albeit, not at the pace of market change.

Pharmaceutical supply chains often mirror this pattern, remaining highly relationship-driven despite increasing volatility and complexity. This suggests that while pharma may be more relationship-focused, it is not trending far behind the broader market.

The challenge is that the assumptions underpinning this relationship-first model no longer hold. Freight markets are increasingly shaped by overlapping shocks, from geopolitical disruption and trade route instability to capacity constraints and cost volatility. Rates can move quickly, capacity can tighten without warning, and routing options can change in a matter of days.

In this environment, procurement decisions based primarily on relationships risk falling out of step with market conditions.

This is because procurement relationships are built on past performance — consistent service, reliability, and how partners have delivered under previous market conditions. But freight markets move in real time, so without freight intelligence to reflect current rates, capacity, and disruptions, decisions risk being anchored in outdated realities rather than what the market demands today.

And then when disruption does hit, freight forwarders are likely managing multiple clients at once — meaning you’re often reacting in a queue, relying on delayed updates or one-size-fits-all communication, which can start to erode even long-standing relationships, as seen in recent BAF-related messaging.

What disruption is revealing

The impact of that disconnect becomes clear when disruption occurs.

Across the pharmaceutical sector, no organisation in the 2026 study reported avoiding tangible financial or operational consequences from supply chain disruption over the past 12 months. The exposure is universal.

Half of pharmaceutical organisations have increased contingency budgets to absorb unpredictability, while 42% have been forced into last-minute mode shifts at significantly higher cost. At the same time, 35% report stockouts, production delays, or missed delivery deadlines, and 35% report damage to supplier or customer relationships.

These outcomes reflect a consistent pattern. When disruption is identified late, options narrow quickly and costs escalate.

The experiences shared by procurement leaders illustrate this dynamic. One described how a key supplier failure forced their team to rapidly reallocate orders and negotiate with new vendors under tight timelines, creating both operational strain and cost pressure. Another highlighted the constant adjustments required when disrupted shipping routes delayed essential materials, leading to ongoing communication challenges and shifting delivery expectations.

For many procurement teams, the challenge is not recognising disruption, but identifying it early enough to act before its full impact is reflected in pricing and availability.

The visibility gap behind the numbers

At the centre of these challenges is a widening visibility gap between how quickly freight markets move and how quickly procurement teams can respond.

According to the 2026 Xeneta study, 47% of pharmaceutical organisations reported limited visibility into market rates, capacity, or carrier performance relative to contracted agreements. A further 38% said they had missed opportunities due to this lack of insight, while 47% identified rigid annual planning and tendering cycles as a source of unnecessary cost.

The difficulty is that the financial impact of disruption rarely appears all at once. It builds progressively as market conditions tighten.

Initial increases in fuel costs and insurance premiums are often followed by capacity constraints as carriers reroute services, adjust networks, and prioritise cargo. This then feeds into surcharges, rising spot rates, and longer lead times. By the time procurement teams are forced to react, much of the cost has already been absorbed into the market.

Recent disruption in the Middle East illustrates this clearly. Airspace closures have reduced available air cargo capacity, while longer maritime diversions have tied up vessels and equipment for extended periods. Together, these pressures have tightened supply and intensified competition for available space — particularly for time-sensitive pharmaceutical shipments.

Without independent visibility into changing market conditions, procurement teams are less able to anticipate disruption early, validate pricing movements, or assess exposure before costs escalate. Instead, many are left reacting once disruption has already materialised across the supply chain.

Escalation of secondary effects

The challenge is compounded by the fact that the true cost of disruption rarely sits within freight spend alone.

Most organisations can identify the immediate costs quickly — emergency bookings, last-minute mode shifts, and spot rate premiums. But the larger financial impact often emerges later through secondary operational effects that are harder to measure and even harder to attribute.

Extended transit times can disrupt inventory planning, increase carrying costs, and trigger emergency re-sourcing activity. Delays can also create operational strain through labour inefficiencies, administrative overhead, missed delivery windows, lost sales, and pressure on supplier and customer relationships.

In pharmaceutical supply chains, where product viability and availability are critical, these secondary effects can escalate quickly. Yet they are often difficult to quantify because the impact rarely remains within a single function.

Procurement teams may succeed in avoiding immediate freight cost increases, while the operational consequences surface later elsewhere in the organisation — through inventory exposure, production disruption, warehousing pressure, or customer service challenges. In siloed organisations, those downstream costs are frequently disconnected from the original procurement decision, making the true financial impact of disruption harder to identify in real time.

The challenge, therefore, is not simply responding once disruption occurs, but understanding how risk, cost, and operational exposure move across the supply chain before they fully materialise.

This is where earlier visibility into market conditions becomes increasingly important — helping procurement teams identify emerging pressure points sooner, quantify potential downstream impact faster, and make decisions with a clearer understanding of both immediate freight costs and wider operational exposure.

Signals of change – and the barriers holding it back

There are clear signs that pharmaceutical procurement leaders recognise the need to evolve.

According to the 2026 Xeneta study, 48% of organisations already use market intelligence tools, while 30% expect to adopt a more data-driven procurement approach within the next five years. Yet despite this shift, 57% still expect procurement to remain primarily relationship-driven, highlighting a persistent gap between intent and operational reality.

Much of that gap is structural. Legacy systems remain difficult to integrate with newer technologies, cited by 57% of organisations as a major challenge. At the same time, procurement teams are being asked to take on broader responsibilities, with 47% increasing their focus on risk management and scenario planning, and 40% making greater use of spot market sourcing and short-term bookings.

Meanwhile, the wider healthcare logistics market continues to move towards greater flexibility and responsiveness. Investment across the sector is rising, with increasing emphasis on real-time monitoring, cold chain visibility, and more agile, multi-node distribution networks designed to operate under disruption rather than around it.

Procurement models are beginning to evolve in response — but in many organisations, the infrastructure supporting them is not keeping pace. Supply chain volatility is accelerating faster than traditional operating models were designed to handle.

The opportunity in 2026

2026 represents a broader shift in how pharmaceutical procurement must operate.

Disruption is no longer an occasional event to manage around. It has become a structural feature of global supply chains, driven by geopolitical instability, shifting trade routes, and increasingly constrained logistics networks. The Middle East is simply the latest example of a wider pattern reshaping freight markets.

The organisations pulling ahead are not replacing long-standing logistics relationships. They are strengthening those relationships with independent market visibility and faster access to data, allowing them to anticipate change earlier, validate market movements with greater confidence, and reduce reliance on reactive decision-making.

In pharmaceutical supply chains, that shift creates a meaningful operational advantage: the ability to make faster decisions, reduce downstream exposure, and maintain continuity in an increasingly unpredictable market.