Report

The Japan Cold Chain Logistics Market size is estimated at USD 21.49 billion in 2025, and is expected to reach USD 27.42 billion by 2030, at a CAGR of 5% during the forecast period (2025-2030).

In Greater Tokyo and Greater Osaka, the logistics sector is grappling with an oversupply issue, despite robust demand. This surplus of new logistics facilities has led to rising vacancies and a decline in rents, compelling developers to innovate to stay competitive.

Japan's market is on a growth trajectory, fueled by a surging demand for fresh, high-quality products among its consumers. The country's pharmaceutical sector, especially with the heightened focus on immunization and ongoing health management, is bolstering this growth.

The sector is increasingly relying on advanced logistics to distribute temperature-sensitive drugs and vaccines. Moreover, advancements in refrigeration and logistics tech are making operations more efficient and cost-effective, further boosting the sector's potential.

Compounding this growth, Japan's strict regulations mandate advanced cold chain solutions for transporting perishable and pharmaceutical goods, ensuring both compliance and safety. The market is also expanding due to the surge in online grocery shopping.

E-commerce platforms and retailers are heavily investing in cold chain capabilities to meet the growing demand for swift and secure delivery of perishable items. These factors collectively underscore the rapid evolution and expansion of Japan's cold chain logistics.

Refrigerated warehouses maintain temperatures at or below 10 degrees Celsius. Heightened consumer and regulatory focus on sanitation is driving the need for reliable cold chain solutions to prevent contamination and spoilage.

The pharmaceutical sector's growth mandates stringent temperature controls for storage and distribution, aligning with both efficacy and regulatory standards. With increased imports, Japan is seeing a rise in perishable goods, including fresh foods and pharmaceuticals.

Urbanization is fueling the growth of supermarkets, convenience stores, and online grocery platforms, all of which demand efficient cold chain operations for the timely delivery of fresh products to consumers.

In conclusion, Japan's cold chain logistics sector is poised for significant growth, driven by increasing consumer demand for fresh and quality-sensitive products, a robust pharmaceutical sector, and stringent government regulations.

Technological advancements and the rise of e-commerce further enhance the sector's prospects. As developers and retailers continue to innovate and invest in cold chain capabilities, the market is expected to expand, ensuring the efficient and safe delivery of perishable goods across the country.

Japan Cold Chain Logistics Market Trends

Logistics and Warehouse Sector Witnessing a Significant Surge

Amidst robust demand, the logistics sector in Greater Tokyo and Greater Osaka is grappling with a surge in new supply, disrupting the delicate balance between supply and demand. This influx has led to rising vacancies and a dip in rents, compelling developers to innovate to stay competitive.

While some struggle to secure tenants, those boasting prime locations and cold storage capabilities remain highly sought after. Projections indicate that the new supply in 2023 will outstrip 2022 figures, especially in Greater Tokyo, which is poised to hit record highs. This surge in supply is expected to intensify the competition for tenants, particularly disadvantaging poorly located or older facilities.

In the first half of 2023, Greater Tokyo witnessed a notable uptick in completions, introducing close to 3.0 million sq m of new logistics space. The standout was the ESR Higashi Ogishima Distribution Centre, a 349,000 sq m multi-tenant facility, now recognized as Japan's tallest logistics building. Conversely, Greater Osaka's new supply for the same period was more restrained, totaling around 520,000 sq m, with no developments exceeding 100,000 sq m in 2023.

The highlight was the MCUD Kobe Nishi II, boasting a GFA of 63,000 sq m, strategically located in the Kobe Techno Logistics Park, offering proximity to major roads and expressways for efficient deliveries and a robust workforce. Noteworthy completions in 2023 included Daiwa's House DPL Hyogo Kawanishi, spanning 89,000 sq m and strategically situated near the Kawanishi Interchange, enhancing access to the wider west-Japan region.

In total, 2023 saw nearly 1.0 million sq m of new supply, with a significant uptick in development activities projected for Greater Osaka starting in 2024. In a notable move in July 2024, Daiwa House Logistics Trust, known for its presence in Japan, expanded its reach by acquiring a newly built warehouse near Ho Chi Minh City for VND 483 billion (USD 20 million). This addition, just an hour's drive from District 1, features a state-of-the-art cold storage facility, completed in September of the same year.

In 2022, Kanagawa Prefecture had the largest cold storage warehouse capacity in Japan, at around 4.45 million cubic meters. Tokyo Prefecture followed with about 3.86 million cubic meters. Refrigerated warehouses are defined as facilities for storing products at a temperature of 10 degrees Celsius or below.

In conclusion, the logistics sector in Greater Tokyo and Greater Osaka is undergoing significant changes due to the influx of new supply. While this has created challenges such as increased vacancies and reduced rents, it has also driven innovation among developers. Facilities with prime locations and advanced features continue to thrive, highlighting the importance of strategic positioning and modern amenities. As the market evolves, stakeholders must adapt to the shifting dynamics to maintain competitiveness and capitalize on emerging opportunities.

Growth of Pharmaceutical Sector in Japan

Japan, driven by its aging population, stands as a prominent player in the global pharmaceutical landscape. The nation not only boasts a robust domestic biologics sector, second only to the USA, but also actively champions the production and import of cutting-edge medical technologies. Bolstering this, the Japanese government has been fervently advocating for generic drugs.

While Japan has historically favored exclusivity for innovative drugmakers, the market is now witnessing a shift. The nation is aligning itself more closely with other developed markets in terms of embracing generics. This, combined with the government's push for cost-effective alternatives, sets the stage for a significant surge in biosimilar opportunities.

Domestic pharmaceutical players in Japan are increasingly looking beyond their borders, with a noticeable uptick in overseas sales. This global expansion, in turn, is fueling a rising demand for cold chain storage and transportation facilities. Moreover, Japan's pharmaceutical landscape is drawing attention for its potential to bolster the nation's drug discovery ecosystem.

Collaborations between Japanese pharmaceutical giants and AI startups are on the rise. The industry's new drug development landscape is challenging, with success rates estimated at 1 in 20,000 to 1 in 30,000, and a development timeline of over a decade. Such endeavors come with a hefty price tag, averaging around 120 billion yen (approximately USD 834 million).

In 2022, Japan's pharmaceutical imports surpassed 3.4 trillion Japanese yen, marking an increase from the previous year. Concurrently, the value of Japanese pharmaceutical exports in 2022 reached approximately 649 billion Japanese yen, up from the previous year's figure of around 563 billion Japanese yen.

Cold chain logistics play a pivotal role in the pharmaceutical sector, ensuring medications and vaccines adhere to stringent temperature requirements. This is especially crucial for vaccines, safeguarding their potency and efficacy, particularly in large-scale immunization programs.

In conclusion, Japan's pharmaceutical market is poised for significant growth, driven by government initiatives, technological advancements, and global expansion efforts. The increasing collaboration with AI startups and the rising demand for cold chain logistics further underscore the sector's dynamic evolution. As Japan continues to enhance its drug discovery ecosystem, it remains a key player in the global pharmaceutical industry.

Japan Cold Chain Logistics Industry Overview

The market is relatively fragmented, with many local and international players, including Nippon Express, Yamato, Sagawa Express Co., Ltd, Itochu Logistics Corp., and Kintetsu World Express. The competition in the market pertains to costs, storage fees, and space, along with the rising prices of packing and packaging materials. The service providers are still working on developing the ability to provide standardization in the processes. Lack of standardization related to storage temperature and operating procedures are a few more significant challenges the industry faces. The quality and flexibility of available cold warehousing space are a considerable concern.

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