Among the data the Polimi Contract Logistics Healthcare Observatory 2025 put on the table in its most recent edition, there is one that went without headlines but describes a structural phenomenon for Italian pharmaceutical intermediate distribution: intermediate distributors are shipping more kilograms but in smaller parcels. Translated into numbers: +9% shipments and +19% kilograms transported in 2025, against -1% overall parcels per shipment and — in the pharmacy segment — a +17% parcels per shipment (channel consolidating in outbound). Intermediate distributors are inside the first datum; fragmentation directly concerns them.
A note for non-Italian readers: this article focuses on a structural dynamic of Italian pharmaceutical wholesale, but the underlying phenomena (just-in-time pressure from pharmacies, assortment widening, specialty growth) are observable in all mature European pharmaceutical markets, with country-specific differences in intensity.
Stated operationally: to serve the same pharmacy, the DIF driver makes more passes per month and each one with fewer parcels, or makes the same number of passes but with a wider SKU mix. In both cases, density per delivery drops. On a cost structure where each stop has a fixed threshold (fuel to get there, counter entry time, administrative handling), and where the percentage margin is regulated by law at 3.65% — or 3% on generics after the TAR ruling of 9 February 2026, fragmentation is a structural pressure on pharmacy-by-pharmacy cost-to-serve.
This article addresses four operational questions. What technically means “shipment fragmentation” in DIF. Why it’s happening structurally (not in cyclical waves). How much it weighs on real route costs. And how to respond without throwing away the existing planning: dynamic balancing, intelligent clusters, cube/weight utilization optimisation, progressive recomposition.
What “shipment fragmentation” measures
The key metric is the parcels per shipment ratio. It’s the average number of parcels making up a single delivery to a single pharmacy (or hospital, or parapharmacy). If the metric drops with equal shipment numbers, it means each delivery carries on average fewer parcels.
Three concomitant causes push in the same direction. First, the pharmacy pushes on just-in-time: instead of ordering large quantities once a week (and keeping them in inventory), it orders small quantities several times a week. The pharmacy warehouse becomes the distributor’s warehouse, and the frequency of DIF van passages increases. Second, the assortment widening required by the pharmacy (cosmetics, medical devices, supplements, veterinary, baby products) means more SKUs ordered at a time, each in small quantity. Third, the information transparency on manufacturer stocks: the pharmacy orders the drug only when it sees it available in the distributor’s warehouse, so orders become more reactive and less aggregated.
Polimi 2025 observes that the parcels/shipment ratio of the Italian pharmacy channel grew 17%: meaning pharmacies are consolidating their outbound orders (making fewer with bigger baskets). The symmetric phenomenon — fewer parcels per total DIF segment shipment — means the internal composition is changing in the opposite direction. Distributors are absorbing the flow fragmentation.
Why it’s happening structurally
Four converging forces that are not cyclical waves but permanent changes in the supply chain.
Pharmacy inventory reduction. The pharmacy warehouse is one of the most impactful management costs for the owner (tied capital, perishability, physical space). Since the distributor guarantees a 12-hour maximum delivery from order (continuous and appropriate service under Italian decree 219/2006), the pharmacy structurally reduces stocks: the “real” drug warehouse is the distributor’s, not the pharmacy’s. The shorter the service promise (ADF declares 3 hours average between order and delivery on the 19,000 pharmacies served by its members), the more the pharmacy reduces stocks and the more fragmentation grows.
Specialisation and assortment widening. The Italian pharmacy is changing merchandising profile: cosmetics, dermocosmetics, supplements, medical devices, allergen-free foods, veterinary. Every new product line means more SKUs in the distributor’s catalogue and more SKUs per order. The intermediate distributor managing 30,000 SKUs today probably had 12-15,000 ten years ago.
Specialty segment growth. Specialty drugs (biologics, oncologicals, advanced therapies) have lower unit volumes but higher values. A delivery including a biologic is structurally less “dense” in parcel terms but richer in value. On international benchmarks, the weight of specialty on distribution value grows 4-6% per year.
Pharmacy chains and proprietary distribution centres. Pharmacies belonging to chains (Hippocrates, Dr.Max, LloydsFarmacia) are served for the most voluminous flows by their own distribution centres, leaving DIF only with residual flows — urgencies, stockouts, low-rotation products. It’s structurally fragmented flow.
How much fragmentation weighs on per-delivery cost
Let’s see the concrete calculation on a realistic example. A pharmacy receiving 2 deliveries per week, with an average total basket of €580 per delivery. Profile:
- Marginal distance from depot: 12 km (round trip: 24 km)
- Driving time: 24/25 km/h × 60 = 58 minutes
- Stop time: 7 minutes
- Cost per delivery: ~€33 (fuel + driver + fleet)
Gross margin at 3.65% on the €580 basket is €21.17 per delivery. Net margin is -€11.83 (loss per delivery), annualised (104 deliveries) makes -€1,230 per year. Already marginal.
Now suppose fragmentation pushes the same pharmacy to go from 2 to 3 weekly deliveries, keeping the same total weekly value (€1,160) but distributed over 3 drops instead of 2. Basket per delivery drops to €387.
- Marginal distance: unchanged 12 km × 3 = now 72 km/week instead of 48 km
- Total driving time: 87 minutes × 3 / week = 4.35 hours vs 2.9 previous
- Cost per delivery: still ~€33
- Total cost per week: €99 vs €66 → +50% cost at equal total basket
Gross margin is 3.65% × €1,160 = €42.34/week (unchanged). Net margin drops from -€22 (2 deliveries) to -€57/week (3 deliveries). On an annual basis, the loss goes from -€1,140 to -€2,960/year. Route fragmentation has more than doubled the net cost of that pharmacy without improving its revenue.
This is the hidden mechanism of fragmentation: it doesn’t show on the pharmacy’s revenue, it shows only in the distributor’s costs. It’s why many DIF wholesalers are discovering only now, with pharmacy-by-pharmacy cost-to-serve systems, that their portfolio is less profitable than aggregate statistics suggested.
The operational response: three concrete levers
Fragmentation doesn’t “stop” — it’s a structural trend that will continue compressing the parcels/shipment ratio. The response is not to reverse the trend but to absorb it at lower marginal cost. Three concrete levers we see applied across Optivo’s DIF clients.
Lever 1 — Dynamic load balancing
On traditional routes, each van is dimensioned on the route’s historical average volume. If fragmentation grows, some vans saturate with parcels but are underutilised in weight (cube full / weight empty), others are saturated in weight but empty in parcels. Dynamic balancing means recomposing the stop sequence and pharmacy assignment to vans so that each vehicle travels with a weight/parcel mix maximising its use.
On sector benchmarks — applicable also to pharma — a dynamic balancing programme recovers 5-8% of annual km at equal service, reducing the number of vans with utilisation below 60% of real cube. The pattern was discussed in detail in the pillar on pharmaceutical logistics. It’s the model the sector is starting to call logistics control tower: a unique vantage point that sees in real time the state of vans, planned drops and residual capacity, and recomposes the load coherently, without the dispatcher having to manually reconstruct the picture at every event.
Lever 2 — Intelligent geographic clusters
When fragmentation grows, the optimal size of the geographic cluster (the set of pharmacies the single van serves in one route) changes. Too-large clusters become inefficient because each pharmacy has few parcels and the van spends time stopping; too-small clusters are inefficient because the van does the round trip for few drops. The optimal size depends on: average distance between cluster pharmacies, average basket per pharmacy, required frequency, time constraints.
The “what-if” simulation model — loading current data into the system, simulating alternative cluster recompositions, selectively applying on the 2-3 clusters with greatest drift each quarter — is exactly the model described in the pillar. It’s particularly effective against fragmentation because it allows resizing clusters as per-delivery density changes.
Lever 3 — Cube/weight utilization tracking
An operational metric few intermediate distributors systematically track: van cube/weight utilization at each drop. On light refrigerated vans (3.5 tonnes payload, ~10-12 cubic metres usable cube after refrigeration) the optimal limit is generally cube, not weight. But with fragmentation and specialty growth (high value density, low weight density), the limit shifts.
Tracking real cube/weight at each drop — possible with driver apps recording what goes out and how much — produces new operational data the dispatcher can use to recompose the route. On a fleet of 20 vehicles, a cube/weight tracking programme applied for 6 months typically identifies 3-5 geographic clusters where average utilisation is below 60% of real cube: those are immediate candidates for recomposition.
The Univex pattern: national capillary distribution and fragmentation
Among our DIF clients, Univex — national pharmaceutical distributor with Milan headquarters and 6,000 sqm warehouse of which 1,000 temperature-controlled — addresses fragmentation with a pattern combining the three levers above. The geographic service structure: high frequency in metropolitan zones (daily or twice-daily deliveries to urban pharmacies), lower frequency in rural zones (weekly or fortnightly multi-stop routes).
Fragmentation manifests differently in the two contexts. In urban zones, the risk is that the 2-4 daily deliveries per urban pharmacy be composed of 3-8 parcels each instead of 12-15 like ten years ago; the van spends time stopped at the counter. In rural zones, the risk is that the monthly route becomes multi-stop on pharmacies with ever-smaller baskets, lengthening transit time without growth in transported value.
Univex applies the “progressive recomposition” strategy — every quarter, the system identifies the 2-3 geographic clusters with greatest efficiency drift and applies recomposition there, leaving well-functioning routes stable. On sector benchmarks, structured programmes of this kind produce 5-10% fewer annual km at equal service, with an additional advantage on driver workload balancing.
KPIs to monitor in DIF under fragmentation
When fragmentation is a structural trend, it’s worth adding 4 KPIs to the 6 standards of pharmacy cost-to-serve.
| KPI | Frequency | Typical target |
|---|---|---|
| Average parcels per delivery (per cluster) | Monthly | Stable or trigger at -10% YoY |
| Average cube utilization (per cluster) | Monthly | >60% real |
| Cost per parcel delivered (per cluster) | Monthly | Stable vs benchmark |
| Stops per driver hour | Weekly | Stable; rise = over-fragmentation |
| % deliveries in time window | Weekly | >95% pharmacies, >98% hospitals |
| Average stop time per delivery | Monthly | Stable; rise = new inefficiency |
On the 7 fundamental KPIs for every fleet manager we have a dedicated article; for DIF under fragmentation, cube/weight and parcels-per-delivery KPIs are the ones capturing the phenomenon before it translates into eroded margin.
Frequently asked questions
Is DIF shipment fragmentation an Italian or European trend?
It’s a European trend present in all mature pharmaceutical markets, with Italian specifics (high number of independent pharmacies, margin regulation, DD/DPC weight) intensifying it. The Polimi 2025 report observes that the phenomenon is also more marked in Italy compared to other EU countries.
Can fragmentation be “reversed” by agreeing larger orders with pharmacies?
Hardly. The pharmacy has structural incentives to reduce stocks (tied capital, perishability, space) and the distributor’s delivery promise (12 mandatory hours, 3 hours average) reinforces the behaviour. The lever is not to reverse the trend but to absorb it with lower marginal costs through dynamic balancing and progressive recomposition.
Is cube utilization really measured in real time?
Yes, with driver apps recording what exits the van at each drop (digital POD + drug code scanning). Raw data is available in real time; aggregation and analysis require a system processing it. For Optivo’s DIF clients, the integrated driver app provides this data as part of the standard POD flow.
How many daily deliveries are optimal for an urban pharmacy?
It depends on basket, SKU composition and counter staff availability. On benchmarks, 2-3 daily deliveries is the most widespread range for active urban pharmacies; above 4 deliveries the parcels/delivery ratio drops below the distributor’s profitability threshold without significant operational advantage for the pharmacy. Between 1 and 2 deliveries is optimal for suburban pharmacies.
How is fragmentation modelled in the Optivo calculator?
The Margin Calculator returns the break-even basket and sensitivity on frequencies (1, 2, 3, 5 deliveries/week). To model fragmentation, just compare net margin at different frequencies keeping weekly value constant: the jump from 2 to 3 deliveries/week shows the fragmentation effect on a specific pharmacy.
In summary
Shipment fragmentation in Italian DIF is not a cyclical wave but a structural change: more kilograms shipped, more shipments, but fewer parcels per shipment. The cause is a combination of pharmacy just-in-time, assortment widening, specialty growth and chain disintermediation.
On a single pharmacy’s cost-to-serve, fragmentation can double the annual net cost without improving the distributor’s revenue. It’s the invisible mechanism for which many distributors discover only now, with pharmacy cost-to-serve systems, that their portfolio is less profitable than aggregate statistics suggested.
The response is not to reverse the trend but to absorb it: dynamic load balancing, geographic clusters dimensioned for new delivery density, systematic cube/weight utilization tracking. Structured programmes of this kind produce 5-10% fewer annual km at equal service, with direct effect on EBITDA in a sector with 1.5% average margin.
If you want to understand how much fragmentation is eroding your profitability — which geographic clusters are below 60% cube utilization, where recomposition produces the greatest recovery — talk to our team. Three months of POD and telematics data are enough for the first projection.