There are no substantive arguments contradicting the fact that air cargo has all the attributes it takes to become the most reliable means of transport for pharmaceuticals, yet the industry is in no great shakes while comparing it to the cargo carrying capacity of sea transport. However, with the innovation in technology and reduction in tariffs, the global air carriers are set to pack a wallop in pharmaceutical logistics.
The transportation of pharmaceutical is a considerably profitable business stipulating the complexities within the network are managed with standardised service by air cargo industry. The compelling advantage of air cargo over seaborne freight vis-à-vis an industry that has distinct competitive and logistical challenges in getting its product to market is the speed. With a limited window of time and profitability before the introduction of generic competitors, the first manufacturer needs to get its product to market swiftly, making airfreight the most logical transportation choice.
The air freight segment is estimated to register a considerable CAGR over the forecast period owing to increasing use of the air freight logistics for long distance and intercontinental distribution of valuable vaccines and medicines. The International Air Transport Association (IATA) formed the Center of Excellence for independent validators in pharmaceutical logistics (CEIV), which supports the organisation and air cargo supply chain to achieve excellence in the process of handling pharmaceuticals. The procedures segment is further segregated into picking, storage, retrieval systems, and handling systems.
IATA plays a prominent role in drafting aviation standards; it is beset by the financial challenges of the airline industry. The air cargo industry should be looking to help them out by leveraging our member skill sets through organisations including The International Air Cargo Association (TIACA) and the Airforwarders Association (AfA), using the recently formed Global Air Cargo Advisory Group.
India market predictions
India’s pharmaceutical exports stood at US$ 17.27 billion in 2017-18 and are expected to reach US$ 20 billion by 2020. In 2018-19 these exports are expected to cross US$ 19 billion. Indian healthcare sector, one of the fastest growing sectors, is expected to cross US$ 372 billion by 2022. The demand for pharma products has doubled in the last decade and global sales in the sector are expected to reach $1.3 trillion in a few years. This, is turn, has accelerated the growth of the pharma logistics sector.
According to business intelligence firm Future Market Insights (FMI), the $3.6-billion market for temperature-controlled packaging within the pharmaceutical industry is expected to enjoy a compound annual growth rate of 8 per cent between 2018 and 2028. The USA currently tops the list as the top exporter by air, with around 133,000 metric tons per year, followed by India with 86,100 tonnes and Germany with 51,400 tonnes.
Choosing the right mode of transport for any particular pharma assignment depends upon so many factors like the product value, the shelf life of the shipment and the stock levels of the product at the destination. High-value products that have a short shelf life and those that need to be urgently restocked at a destination will travel by air.
Discussing the preferential shift of pharmaceutical companies towards air cargo especially when it comes to temperature-sensitive cargo, Keki Patel, Former Cargo Manager, India & Nepal at Emirates SkyCargo explains, “We have launched the pharma corridors initiative where we work with ground handlers at our main pharma stations across our global network to ensure that we provide enhanced protection for temperature sensitive pharmaceutical cargo from origin to destination.”
“The most significant development in the transport of pharmaceuticals by air has been the emergence of specialised handling solutions offered by air cargo carriers. In order to support the product we also invested heavily in our infrastructure opening a dedicated facility at Dubai International Airport (DXB) for handling pharma cargo. We then streamlined our processes and obtained Good Distribution Practices (GDP) certification for all our handling operations for pharma in Dubai,” adds Patel.
The hope of hundreds of thousands of patients is stored at the pharmaceutical service providers’ on shelves that have been cooled down to a temperature of around 4®C. The pallets and cartons there contain syringes and vials with active substances for the treatment of cancer, multiple sclerosis or anemia. Temperature-sensitive consignments demand to be handled with the alacrity to avoid the degradation of the valuable medicine and other perishable cargo.
Acknowledging the high cost incurred in pharmaceutical air cargo movement Ravi Kumar Tummalapalli
Head- Logistics – APAC, Japan, China at Teva Pharmaceuticals says, “Air cargo would be for sure an expensive service for cargo movement. For pharma, it becomes much more expensive when we consider the cargo being secured in passive and active packaging. Most of the pharmaceutical products which are shipped by air cargo are packed with thermal blankets, and for cases of highly sensitive cargo, it would be in 2-8®C active containers. The dead weight of the active containers itself is so high that it makes the over shipment logistics cost quite expensive.”
“But this is a boon for the pharma industry that there are new technologies of active containers which give same amount of efficiency and also reduces the dead weight of the equipment which is proving to be beneficial to the industry,” adds Tummalapalli.
Spreading best practices
Recognising the need for a concentrated effort to improve the level of competency as well as operational and technical preparedness in air transport of pharma shipments, the industry has taken some steps to enhance compliance, standardisation, accountability and transparency across the air transport supply chain.
For instance, the CEIV which after being awarded with the CEIV seal by IATA, as part of a complex procedure, independent specialists review an airline’s processes when transporting pharmaceuticals using the Cool/td Active and Cool/td Passive products. As such, Lufthansa Cargo was assessed as exhibiting superior reliability and expertise. Lufthansa Cargo is now one of only six airlines worldwide to have received this certification for processes throughout the global route network.
J Florian Pfaff, Vice President Asia Pacific at Lufthansa Cargo elucidates about the recent innovations and practices that help make air cargo industry favorable for pharmaceutical industry.
“Lufthansa Cargo offers a wide range of active and passive cool solutions for transport on its extensive network. With the CSafe RAP we have further widened our portfolio. With CSafe’s proprietary insulation together with an innovative cooling and heating system, the CSafe RAP precisely maintains a defined payload temperature set-point throughout product transport, even in the most extreme ambient conditions (-30°C to +54°C),” says Pfaff.
Transporting healthcare products by air demands a rigorous logistical approach. If mishandled, the intactness of these products can be compromised by temperature changes during transportation.
“With the pharmaceutical industry moving over one trillion dollars worth of cargo every year, upholding a shipment’s quality requires specific equipment, storage facilities, harmonised handling procedures and, above all, strong cooperation among the cold chain partners. Training in Temperature Control Regulations (TCR) will address temperature management issues identified by the industry. This training provides the requirements and standards for the transportation and handling of pharmaceutical products, including the compulsory use of the IATA Time and Temperature Sensitive Label,” points Bharat Thakkar, Joint Managing Director, Zeus Air Services.
Many airlines are determined to make their pharma transport capabilities seamless and obtaining the certification for best practices. Recently, Cargolux Airlines has successfully passed its GDP renewal audit covering its pharma handling processes.
“We are proud of this achievement and the commitment our teams continuously demonstrate to the requirements of the EU Directive,”comments Franco Nanna, Director- Global Logistics Services at Cargolux Airlines.
“Healthcare and pharmaceuticals are highly sensitive products and we want to ensure our customers’ peace of mind during the transportation process. This certification represents a seal of approval from the industry which we intend to uphold in line with our commitment to service excellence,” says Nana.
Air cargo industry is at the nexus of supply and demand. Combined with its role in the services industry, the air cargo industry is heavily influenced by the latest technologies and market forces. As a result, making business plans one month, let alone one year, in advance is a tall order.
India market predictions
Air freight is the most popular form of temperature controlled transport, as this method can help alleviate time considerations, geographical obstacles and lack of infrastructure (roads, railways, ports, etc.). Air transportation is even the most popular mode of transport for in-country logistics.
- Capacity oversupply
Overcapacity has created a more competitive service for manufacturers and as a result, services have become more temperature-controlled pharmaceutical focussed, which is positive for the quality of the products.
- Weak points
It is widely acknowledged that the weakest points in the air freight supply chain are the transfer points between the different players. Staff training, increased planning for the aircraft type and increased due diligence are areas that require more attention.
- Cost efficiency
A key element of cost-saving and efficiency in the air freight industry is modernisation and the use of technology for process improvement and optimisation. Like other industries, pharma logistics companies face the challenge of incorporating digitisation, despite the cargo industry not being technology driven.
- The future of air freight
With the demise of huge blockbuster drugs hitting the market every couple of years, the generics industry now covers a large proportion of the generic medicines that are being delivered to patients. Transportation methods will be approached in a far more cost-conscious manner in the years to come.
Outlining the most critical yet existing challenge in air freight management of pharma shipments, Thakkar elaborates, “The mismatch between the expectations and requirements of pharma shippers and the actual quality of the received cargo from the logistics service providers’ end, creates a high-risk situation and is the cause due to a number of temperature excursions.”
Cool, Smart and Fast
Apart from IoT and Blockchain, when using ‘Cool’, shipments are passively or actively cooled during flights. Several container types are available to ensure goods are actively cooled, including Unicooler and Opticooler, which both record numerous data throughout the transportation process. Airlines such as Lufthansa Cargo offer customers from the pharmaceutical and medical technology industry the appropriate solutions to serve their needs.
In order to guarantee product safety, Vetter’s airfreight transports are simulated beforehand, as Claudia Kloos, Logistics Manager at Vetter International explains, “For instance, we have to ensure, that the syringe caps don’t slip because of pressure conditions during air transportation, which would cause contamination. So we test this intensively ourselves, beforehand. At the end of the testing process, we send out a test shipment. But that’s just an extra precautionary step, which goes without saying, is extensively documented. At that stage we are virtually certain anyway that the product or the packaging has been put together in such a way that nothing can go wrong.”
For Vetter, the only practicable solution to the problem was Lufthansa Cargo’s Emergency.Solutions. Once, when a batch for the production of urgently needed material could not be released for manufacturing because of minimal quality defects, there was a risk of failure to meet a deadline for the aseptic filling of a new active substance at the branch facility in Chicago – “with substantial losses in the six-digit range,”remarks an official at Vetter Pharma.
Patel informs, “The packaging chosen by the manufacturer will depend on the nature of the pharma cargo being transported. From our side, our Emirates Pharma product has three levels of innovative transport solutions based on a requirement mix which includes the temperature sensitivity of the product, the packing solution used by the pharmaceutical manufacturer and the origin/destination of the shipment.”
Informing the technology devised by Emirates SkyCargo to avert any degradation of temperature sensitive cargo, Patel further reveals the equipage used by them. “We also protect our cargo with other innovative technology- we have a range of specially designed thermal covers that we’ve collaborated with DuPont. They’re called White Covers and you have three different types – White Cover, White Cover Active and White Cover Xtreme. These offer differing levels of protection for pharma cargo from heat, cold, dust and humidity.”
We also have an extensive fleet of close to 50 Cool Dollies in Dubai dedicated for the transport of pharma. Our main deck and lower deck Emirates Pharma Cool Dollies work in a way that minimise thermal excursions on the ramp when temperature sensitive cargo is being moved from the cargo terminal to the aircraft or the other way around. Our Cool Dollies are capable of maintaining temperatures as low as -20®C.
Finally, we also offer customers a variety of containers from third party providers. We work with all the market leaders for specialised temperature controlled containers including Envirotainer, va-Q-tec and SkyCell. Customers can choose the solution that works best for their requirements.
Fate of air pharma logistics
Pharmaceutical transportation through air cargo will gradually keep increasing due to the fact that most of the companies are reducing inventories across the board to be more productive. Also, another fact is that the pharmaceutical companies are getting into bio-pharma and bio-tech where in the medicines are very high value and sensitive to temperature variations. This needs a highly-coordinated and qualified network to get the products from point A to B in a time-efficient manner.
However, as the complexity and sophistication of the pharmaceutical cargo being transported increases, air cargo carriers will also have to up their capabilities and invest in ‘fit for purpose’ infrastructure to meet customer requirements.