Exclusive interview: AstraZeneca’s move to seafreight continues
08 / 09 / 2015
A few years back when hints of modal shift first appeared in airfreight, the received industry wisdom was that it would have limited impact, because most cargo that goes by air has to go by air.
The idea was that many shipments were so time-sensitive or valuable that seafreight was not an option. Consumer electronics, fashion, perishables, pharmaceuticals – all were quintessential air freight products.
If anyone still thinks this, they should look at the pharmaceutical industry and worry. Five years ago AstraZeneca, one of the giants in the sector, used to use airfreight for 90% of its shipments, with only five percent going by sea. Today 55% goes by sea and the target is 70%, one that Julian Wann, the company’s global category leader, freight and logistics, clearly thinks is achievable.
Why the change? Moving shipments by sea is obviously cheaper, but Wann insists that it is performance rather than cost that has been the driver.
“We want to consistently get the product to the destination at the right temperature,” he says.
Put simply, after making a route-by-route analysis, AstraZeneca concluded that seafreight could often achieve that goal better.
“Seafreight is much simpler because the container goes end to end,” says Wann. “It picks up the product from our warehouse, the refrigeration is on, the door is locked and the generator is on throughout the journey. There is very limited switch-off.
“There is still an element of care by the carrier – they have to make sure that the container is plugged in and at the right temperature during transit. But once it is off the ship it is put into a stack and plugged in. There are some problems – such as if a door is opened in transit – but not many.
”Contrast that with airfreight where the goods are passed from one transport provider to another – onto a truck, into a warehouse, across the tarmac, onto a plane, and then all this in reverse: “a lot more touch points”, as Wann puts it.
“It is no secret where the problems occur,” he says. “Usually when passing from one part of the chain to another. So on the tarmac prior to loading or after unloading, or in Customs clearance when it may be left in an environment that is not temperature-controlled.”
Of course airlines, forwarders and handlers have made big efforts to eliminate such problems in recent years, and Wann is not unappreciative: “We have seen improvements – not so many temperature excursions, and in particular fewer where we lose the product, something that was never very high in the first place.
We have seen a lot of investment and a much bigger desire by airlines and forwarders to do the kind of things we need.
”He also says that since he spoke at the *Air Cargo News Life Sciences and Pharmaceuticals Conference last December he has had a number of airlines get in touch and also talked to ground handlers. He continues to work closely with forwarders on process improvements.
But none of this changes the fact that in many cases an even bigger reduction in temperature excursions can be seen by using seafreight.
“When the volume of seafreight shipments rises, the number of temperature excursions falls.
There is a definite correlation between the two.
”And not incidentally, ocean is also better from a carbon emissions point of view.
The increased use of seafreight reflects other changes that are perhaps not so specific to pharmaceuticals.
Whereas once airfreight was at the cutting edge of global logistics, today it is better planning and increasing efficiency which makes use of surface transport possible.
AstraZeneca, for example, did a careful study of all its manufacturing sites and their processes, and looked at its supply chains from end to end.
“By planning better, we could build in transit time to go by ocean,” Wann says.
“We manufactured in larger batches, and there was less variability and fewer changeovers.
”Better planning has also revolutionised the way the company deals with emergencies.
“In the past in such cases everything reverted to air. “Now we will send some product by air to meet the immediate need, and then use that to give us time to get the rest there by ocean.”
Another factor favouring seafreight has been standardising monitoring and reporting on shipments.
Wann says the same type of temperature monitor is now used for both sea and air movements, and the way data is reported for both is also now identical.
“At the destination they look at the performance of the shipment as soon as it arrives. If there are issues they are raised and dealt with in a consistent way.
“That data is fed into a database, which can easily be interrogated on a route by route basis. You have a dashboard that shows you how all shipments by whatever mode are doing.”
Having this data has made the benefits of using seafreight much clearer.
In all of this, Wann is keen to stress that he is not indulging in a blame game.
He is keen to work closely with the airfreight industry to improve performance, and after all there still remains the 30% of AstraZeneca shipments that it still expects to move by air.
He is complimentary about Envirotainer, for example, and says Astra-Zeneca “has had a great deal of support” from them.
“We have taken time to meet them and go to their site in Sweden, and we shared some of our learnings with them and got to know a bit more about them.
”He is also open about AstraZeneca’s need to do better in some situations.
For example, one issue is ensuring that temperature monitors are read straight away after being taken out of containers on arrival, not taken to an office to be read 10 or 15 minutes later. This, says Wann, will “eliminate excursions that are not excursions”.
For Customs clearance, meanwhile, he recognises AstraZeneca’s responsibility to have all the paperwork in place in a timely fashion.
“We say to our supply chain partners that if we are doing something wrong, please come and tell us.”
Even here though, seafreight has an advantage.
“If a problem with documentation is spotted once product has left the factory, there is more time during an ocean voyage to put things right.
“You have a few extra days to do something about it.”
As for airlines who want to take pharmaceuticals seriously, one piece of advice Wann has is that the product needs to be consistent across the whole network, not just in a few key stations.
“There is no specific part of the world that is a focus for us: we deliver to pretty much everywhere.
“One challenge airlines have is that when they make improvements for pharmaceuticals in their warehouses, it is difficult to make them in every airport. We do try and address this risk by working with forwarders, however.”
At the end of the day, it all comes down to trust, and knowing that supply chain partners can be relied upon absolutely. After all, AstraZeneca’s relationship with its customers, the patients that use its drugs around the world, requires the same level of trust.
“When patients receive our product, we need to be absolutely sure that it has been transported in the right way,” Wann says. “That is something we can’t and won’t compromise on.” ■