CEIV Pharma certification for the group’s two main hubs and carriers frees Air France-KLM-Martinair Cargo to concentrate on lane assessments and continuous improvement,
writes Will Waters
Completing IATA’s CEIV Pharma certification earlier this year for the group’s two main carriers and their respective hub operations in Amsterdam and Paris is a significant milestone for Air France-KLM-Martinair Cargo, but is by no means the end of the journey. Instead, the airline group describes it as “another step towards, and reconfirmation of, our ongoing focus on innovation and improvement of our global pharma network processes and facilities”.
This ongoing focus on innovation and improvement is something increasingly demanded by pharma and life sciences customers and their logistics partners, as is some kind of pharma certification, whether CEIV or GDP, says the airline group’s director of pharma, Renate de Walle. She says that for more and more pharma shippers, it is essential if you even want to get on the tender shortlist for their business, at least in many parts of the world.
She says that having the two hub operations and operating carriers CEIV Pharma certified allows the group “to concentrate even more on executing lane assessments to identify risks and implement the appropriate mitigations in services and processes, which will result in further enhancement of our global pharma network capabilities”.
This is also vital, of course, because every shipment’s journey has an origin and destination point, and so no amount of excellence at one end of that journey can guarantee the shipment’s safe carriage throughout the logistics chain, de Walle acknowledges.
As a result, Air France-KLM-Martinair Cargo has identified its top 25 origin and destination points and is prioritizing assessing any risk factors in those airports, taking any mitigating action, and ultimately getting those areas also certified. The result should be a series of high-performing, low-risk lanes that will together eventually create a certified network.
“We want to lead in pharma transport by air, and in the healthcare industry it is all about the risk management and mitigation,” says de Walle. “The only way to do that is through innovation, to make it more robust, and by continuous improvement. So those are the two areas that we really are putting a lot of focus on, with the support of our top management and those responsible for our outstations.”
“For example, under the CAPA (corrective action/preventive action) processes, if there is an irregularity, you respond to that – and make a recovery, if possible – and you learn from it.”
She says the approach of continuous improvements was already there within the organization even prior to the certification process. “But today we are going further, and also because of the latest GDP adjustments, we are really going to focus on lanes.
“Around 80% of the revenues of Air France KLM Cargo are generated by 25 destinations. From that you can create lanes, and if you really look deeply at those lanes and where there are risks, even if the hubs are certified and the airlines are certified, then you are truly entering into the needs of the industry and reaching out beyond your hubs.
“You see where the risks are over that lane, for example with the introduction of a new container on a lane, such as a DoKaSch container. The processes are almost the same as for an Envirotainer, but not completely and also require contingency measurements if something goes wrong.
“To ship with a new container on a new lane, we need a really robust lane assessment for each specific new flow. So then, say, from the analysis you identify the weak spots in the process that we need to focus on, and what mitigation actions can be put in place to make sure that if something goes wrong, we know what are our responses. And this, I think, is the focus for the years to come, and where we are extremely busy to respond to those new needs of the customer.
“So continuous improvement, risk mitigation, and innovation; and for us, certification is the base that this is built on.”
The plan, essentially, is that over the next couple of years, the airline group will work with its handling partners in all of those top 25 origin and destination points to get those stations certified to CEIV or GDP standards. De Walle says Air France KLM has already been speaking about this with its handling partners, making clear its intentions and the direction of travel. And internally, the pharma team has made it known to those negotiating new handling contracts that having this expertise and capability – and, ideally, certification – is a key element of the carrier’s strategy.
In the meantime, recent and new investments include 15-25 Celsius cool rooms in Cairo last year, Toronto, Nairobi, and a new cool room will be open in Chicago in June this year. “Those cool rooms are not in themselves the answer; it is the process around them, which have to be GDP standards-based,” de Walle stresses.
Bert Allard Jorritsma, quality manager for pharmaceutical logistics, comments: “The development in Nairobi is part of our cooperation with Kenyan Airways, a joint-venture partner, and they’re working to make Nairobi into the pharmaceutical hub into Africa. Kenya Airways has a great, unique network into Africa, and we want to utilise that. Also, we now working to get all those processes as GDP compliant as they can be.”
Also, at KLM’s hub in Amsterdam, an expansion of one of the passenger terminals requires one of the company’s freight buildings to be demolished, also affecting one of the compan’s existing cool chain buildings. “We are using that momentum now also to rethink what we really want there. So we are really going to a fully automated container-handling system, based on GDP requirements. That will open in 2017. So there is a huge investment taking place there, really based on the latest technologies and requirements.
“In JFK, in cooperation with our handling partners there, we are opening a new warehouse, and we are very involved in making sure that is fully in line with GDP requirements. That will be open in May-June also.”
The company is also looking at cool dollies at some of its hubs, although that is in the early stages of study. “In Mexico we have a pilot with cool dollies,” says de Walle. “Also, a little bit like we do in Nairobi, we will use Mexico as a pharmaceutical hub for that region, and really provide from tail to warehouse a closed cool chain.”
So, these are some examples of where the company has put its focus recently, with more to come in the coming years.
“We talk with our customers, ideally as a triangle with the forwarder and the shipper, so that we really understand the needs of the shipper and make sure that we really offer the right solutions. We really want to work in those triangles to overcome obstacles and respond to the needs,” de Walle says.
Jorritsma adds: “The IATA certification really gives us proof of the quality and processes that we have in place, and that is very important for customers, because it gives them clarity: they know what they get, and what they can expect.”
He also stresses the importance of having “great experience staff, because we have been a leader in this for many years. But we are also putting a lot of investment into training, hiring extra staff, dedicated sales and customer service staff. The staff are very, very important – essential.”
While it is also essential to have the right processes in place, he emphasizes that it is also but to implement these and check that they are implemented.
The company’s efforts are being recognised and welcomed by some customers.
Ruud van der Geer, associate director supply chain management EMEA at MSD commented: “The IATA CEIV Pharma certification achieved by Air France-KLM-Martinair Cargo perfectly fits our strategy and is viewed as a ‘value add’, since it’s all about proof, process control and process capabilities.”
And Jeroen Spee, Europe director for air product within UPS’s freight forwarding unit, says the capabilities are appreciated, and customers may be willing to pay more to compensate for the investments. “Compliancy to Good Distribution Practice in general, and certification specifically, requires investment in people, process and possibly infrastructure, which enhances value and quality. As with any investment, this demands a positive ROI. The market’s appetite to pay for the incremental cost is being carefully monitored.”
Brice Bellin, healthcare director Europe at Bolloré Logistics, says simply: “With the IATA CEIV Pharma programme as the standard, we are able to offer transparent services and processes towards our joint customers.”
These echo the views of Marcel de Nooijer, executive vice president of KLM Cargo and managing director of Martinair Cargo: “Standardisation is a prerequisite to jointly raise the bar as supply chain partners to better support the pharmaceutical and healthcare industry in conducting their business,” he says. “The robust IATA CEIV Pharma programme is exactly that: a standard for alignment of the pharmaceutical logistic supply chain.”
He welcomes the recent initiative of ACN, the industry association for air freight in the Netherlands, and Amsterdam Airport Schiphol, to support other members of the Schiphol air cargo community to also undergo certification under the IATA CEIV Pharma programme, with a total of nine companies at the airport expected to hold the certification within the next few months.
IATA’s senior manager for special cargo, Andrea Gruber, comments: “The extensive and comprehensive IATA CEIV Pharma programme is not an easy assignment to take, especially given the relative large size of the hub operations at Paris-Charles de Gaulle and Amsterdam Airport Schiphol. The way forward for all parties in the supply chain is global certified trade lanes next to continuous improvement.”