Tony Wright of Exelsius: The way ahead for pharma

What standards should be applied to ground handlers when it comes to pharmaceutical traffic and how should they be measured? What do shippers really want in this respect? And how can investment in facilities and procedures to handle pharmaceutical shipments be supported and encouraged?
These are just some of the themes of the 2016 Life Sciences and Pharmaceuticals Conference being organised by Air Cargo News at the Hilton London Heathrow Terminal 4 hotel on November 22-23. Details can be found at www.aircargonews.net/lifesciencesandpharma-conference.html.
Tony Wright, formerly with British Airways and Envirotainer, and for the last ten years owner and founder of consultancy Exelsius, says the aim is to encourage more collaboration and in particular to get more shipper input.
“Collaboration is a word that we use rather loosely − it is a bit of a buzzword,” he says. “But we need to look at all parts of the supply chain and how we can establish and measure common standards.
“I very much want shippers to be part of that. The air cargo industry is not being defensive, but is saying ‘tell us what you want us to do’. I am focusing on getting pharmaceutical companies to come and have their say in a round-table discussion.”
In particular, he thinks there needs to be more attention paid to the role of handlers.
“They have always been something of a poor relation, but they are in fact fundamental to the whole pharmaceutical supply chain.
“However, they need to be clear about exactly what standards pharmaceutical companies want.
“We need all the supply chain partners, including shippers, to play their part in setting down those standards, which is what we are hoping to do at this conference.”
Examples could include the time from receipt of goods to a temperature controlled environment, how temperature excursions are dealt with, and standards around the performance of the equipment.
But all these would need to be measurable: “There is no point in having standards if you don’t measure them,” Wright says. “I am a firm believer that only what can be measured can be fixed.”
Handlers matter because airlines need partners to ensure Good Distribution Practice (GDP) compliance throughout their network. As Wright points out, it is one thing to have everything in place in your home hub, but another in far flung parts of the world.
As it is, compliance with GDP, a global standard for the shipment and handling of pharmaceuticals sup-ported by the World Health Organisation, is patchy. In Europe it has been incorporated into European Union (EU) regulation, while in the US the Food and Drug Administration has guidelines but it still remains “a relatively new concept” for airlines, forwarders and handlers, according to Wright.
Elsewhere in the world there are centres of excellence − Wright has just completed a GDP compliance project for Dnata in Singapore, which he says was “very stringent” and fully audited by the Singapore government − but much laxer standards elsewhere.
He thinks that handlers could fill this gap. “It doesn’t have to be at every airport. If you talk to airlines they will say that 80% of their business comes from 20 stations. If you could get those up to standard through a better relationship with ground handling companies, then that would greatly improve performance.”
In order to do this, handlers − and indeed other supply chain companies − have to have a secure environment in which to invest. There is no point in them, or airlines or forwarders investing in facilities and equipment, if pharmaceutical shippers are then going to focus relentlessly on rates when choosing supply chain partners.
Wright admits that there have been some examples of this as times have got tougher for pharma shippers in recent years and margins have come under pressure. “There has been a tendency to look at rates and seek a cheaper deal,” he says.
This, he says, puts the very investment that the pharma shippers want at risk. “If they are going to fly their shipments as general cargo rather than as pharmaceutical shipments, then airlines will put their investment into general cargo.”
In fact, years of experience dealing with pharma companies has persuaded Wright that there are better ways to reduce the cost getting products to market, including looking at packaging, warehousing and manpower.
“For example, if you use passive insulated boxes rather than Envirotainers, there are costs associated with that. You need to cool down the gel packs or to condition the boxes in a temperature controlled environment, you need to store cold packs and to have people in the warehouse to deal with them, and there is a cost to all of that.
“Pharmaceuticals is quite a traditional business, which says ‘we have always done it this way’ when in some cases it could outsource.
“There are a whole bundle of costs in the supply chain and it is very easy to pick on distribution costs as the first one. But this might damage the quality they want to create.”
Part of the problem here is that pharmaceutical shippers often don’t have a good understanding of what happens in the middle part of the supply chain. “They know a lot about the beginning and a lot about the end but not enough about the time between handing it to a forwarder and getting it back at destination. So the tendency is to try and save 10% in that middle bit.
“Pharmaceutical companies still say ‘here is my box, here is a set of rules, now ship it’ but we need a more collaborative approach.
“I founded Exelsius 10 years ago because there is a gap between what pharma companies understand about air cargo and vice versa. There has been some closing of the gap, but we need more, and this is one of the aims of the conference.”
Wright is convinced that better knowledge of each other’s processes and needs will be better for all concerned, leading to lower shipping costs while still maintaining standards and allowing everyone to get a return on their investment.
“We have worked hard over the years to raise the profile of pharmaceuticals, to raise awareness of how that equipment should be used, and we now have a good level of service with major carriers. A lot has been achieved over the years and we don’t want to see that put at risk by pharmaceutical companies not recognising the value in the supply chain.”
Another session at the conference will look at how airports can efficiently and economically provide services to pharmaceutical shipments. As Wright points out, many airports have a perishables centre but very few have a pharmaceutical one.
“The question is whether it would make sense for the airports, rather than individual airlines and forwarders, to develop their own facilities. We will look at what good examples there are of this around the world, and whether it could be a more economical model than forwarders each having their own facilities.”
One topic that might be a bit less prominent this year is mode shift − whether air cargo pharmaceutical shipments are switching to seafreight and if this is gathering pace. “There is still some discussion about this in the industry but what I like is what IATA said recently, that it is less about mode shift than mode choice,” Wright says.
“We need to raise standards so that each mode offers the best possible service, and then the choice will be about what is on offer in each mode rather than the mode itself.”