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 challenges for distribution and patient use.

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 being out of pace from current 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 lack of visibility into market conditions.

47% of pharmaceutical organisations reported limited insight into market rates, capacity, or performance relative to contracted agreements. A further 38% said they have missed opportunities due to this lack of visibility, while another 47% pointed to rigid annual planning and tendering cycles as a source of unnecessary cost.

The cost impact of disruption rarely appears all at once. It builds in layers.

Initial increases in fuel costs and insurance premiums are followed by capacity tightening as carriers adjust routes and prioritise cargo. This is then reflected in surcharges and rising spot rates. By the time procurement teams are forced to react, the cost has already been embedded into the market.

Recent events in the Middle East illustrate this clearly. Airspace closures have reduced available capacity, while longer maritime routes have tied up vessels and equipment for extended periods. Together, these factors have tightened supply and increased competition for available space, particularly for time-sensitive cargo such as pharmaceuticals.

Without access to independent, real-time data, procurement teams are less able to anticipate these shifts or validate pricing as conditions change. Instead, they are often left responding once disruption has already materialised.

Signals of change – and the barriers holding it back

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

48% of organisations already use market intelligence tools, and 30% expect to adopt a more data-driven approach within the next five years. Yet 57% still expect to remain primarily relationship-driven, highlighting a persistent gap between intent and execution.

Much of this gap is structural. Legacy systems remain difficult to integrate with newer tools, cited by 57% of organisations as a key challenge. At the same time, procurement teams are being stretched, with 47% taking on greater responsibility for risk management and scenario planning, and 40% increasing their use of spot market rates and short-term bookings.

Meanwhile, the direction of travel across the wider industry is clear. Investment in healthcare logistics continues to rise, with the market expected to exceed $140 billion in the coming years. This is driving greater emphasis on real-time monitoring, cold chain visibility, and more flexible, multi-node distribution networks.

It appears that procurement is evolving in response — but the infrastructure supporting it is not keeping pace.

The opportunity in 2026

This is a moment to move from reactive to proactive procurement.

Disruption is no longer occasional — it is built into the system, driven by geopolitical shifts and changing trade routes. The Middle East is just the latest signal of a broader pattern.

The organisations pulling ahead are not replacing relationships — they are strengthening them with real-time market intelligence. This allows them to anticipate change, act earlier, and reduce reliance on last-minute fixes.

In pharmaceutical supply chains, that shift creates a clear advantage: faster decisions, better outcomes, and greater control in an increasingly unpredictable market.

The cost of not acting

The pharmaceutical sector is at a clear inflection point.

As disruption becomes constant and expectations on procurement grow, legacy approaches begin to break down. Decisions slow, visibility narrows, and exposure increases.

In pharma, the consequences go beyond cost. Delays can mean missed production, strained supplier relationships, and ultimately risk to patient supply.

The gap is already there – and it’s widening.

Closing that gap requires more than intent. It requires visibility into how the market is moving and the ability to act on it with confidence.

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