Call for closer cooperation along the air cargo cool chain

A rapidly growing market for global pharmaceuticals, already worth an estimated $1.1trn per annum, will require closer cooperation along the partners in the air cargo cool chain.
That was one take-away from the Cool Chain Association (CCA) pharma and biosciences conference in Dubai, along with a heads-up that pharma shippers are widening their criteria for selecting supply chain logistics providers.
But perhaps the most comforting news for air cargo pharma specialists was that maritime container carriers are lagging behind in the compliance race for good distribution practices (GDP) certification.
The CCA audience heard from Therese Puetz, chief executive of Karavan Management Consulting, that while ocean freight pharma transport averaged a 5% per annum growth over the last decade, just ahead of 4% for airfreight, the maritime sector was gaining in the lower and medium end of the value range.
Puetz said that while ocean freight may be on average just 20% of the airfreight cost, it has made most gains on the transatlantic routes, due to better infrastructure available for maritime transport on that trade lane.
But she observed that maritime trade has seen some “hefty” insurance claims due to simple things, such as the incorrect setting of a thermostat.
A later speaker at the same event, Andrew Lester, global director for healthcare at logistics company Expeditors, said that ocean freight suffered from a “big gap” and a lack of understanding about GDP, with the best maritime carrier achieving just 51% compliance with the requirements of GDP and the worst at around 30%, with “poor background performance”.
But there is no room for complacency, with Puetz citing research that the pharma industry suffers total transport losses of around $35bn per year, or 15% of the overall sales value, although some of those losses relate not just to the product value but also includes administration, product replacement and wasted logistics.
In response to growing pharma shipper supply chain demands, air cargo has been increasing its supply chain processes over the past decade, said Puetz. She highlighted the emergence of dedicated pharma facilities at airports such as Luxembourg, Hong Kong, London Heathrow, plus the Middle East hubs at Dubai, Abu Dhabi and Doha.
For the latter three Gulf hubs, this has been important, with Lester reminding the audience that in the past, it was common to see “no Middle East transit” as a prior condition of the airfreight booking for pharma.
As an interesting sidebar, Puetz said that the growth in Halal pharma, respecting Muslim beliefs relating to the non-use of pork-based gelatine and alcohol in medicines, meant that there would need to be additional segregation of such products from standard pharma goods.
Big data and improved technology, such as data loggers which can indicate a temperature spike or excursion in real time rather than after the event, were also themes in the CCA conference.
Described as “enriching the toolbox” for a “smart cool chain,” reference was made to ULDs with rechargeable batteries, improved covers for protecting the temperature regimes of hot and cold products, plus the use of nearfield communications (NFC) – the latter being similar technology to that used for paywave or contactless payments.
NFC can be applied in order to provide not just real time temperature tracking but also to control such elements as humidity.
Bert Allard Jorritsma, manager special cargo and services delivery with Emirates SkyCargo, made the point that good pharma logistics was more than just specialist handling equipment and warehousing at airports, but was also a process that needed input from the entire supply chain.
“I’m looking at you. We need to align,” said Jorritsma, who added that all participants needed to talk about data and also about how to understand and interpret it,  to use data as a “glue” to create a seamless supply chain.
The numerous handover points in a pharma supply chain and the “complex chunk” of data created from those handovers needed to be properly understood in order to maintain the integrity of the product.
“Data is not just about gathering it, but in how to use data for a purpose,” added Jorritsma.
In a latter panel discussion, it was said that Customs and food and health inspection authorities should be located within the warehouse, in order to deal quickly with any clearance problems.
Shippers are also now asking for ‘requests for solutions’ rather than just a request for tender, putting greater emphasis on a better and more reliable supply chain, rather than focusing on cost.
As one unnamed shipper said from the floor, he concentrated on proper temperature control of his high value goods throughout the supply chain, and was prepared to pay for it.

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Established in 1983, Air Cargo News is the leading source of news, information, interviews, analyses and reports to the global airfreight industry. Our leading portfolio includes print, digital and events that give businesses in the airfreight industry the ability to connect with decision-makers in this sector.