Handling focus: Pharma A question of integrity

posted on 3rd April 2018

Trust, transparency, and compliance are key factors pharma shippers consider when selecting air freight providers, reports Megan Ramsay

Temperature-controlled cargo, including pharmaceuticals, flowers and perishables, was among the top-performing air freight growth sectors once again in 2016, with US and India the top two temperature-controlled air freight export nations, and China and the US topping the list of import countries, according to management consultancy Seabury.

And the relatively high-margin and consistently growing pharma sector, in particular, continues to attract strong interest and investment by the international air cargo sector – for good reason.

The pharma industry as a whole is growing at 4-5% per annum, according to the healthcare industry information and technology services company IMS Health. Meanwhile, international air freight pharma shipments rose by between 2% and 3% in 2016, although some airlines and air logistics specialists are seeing pharma growth rates as high as 30%, as shippers increasingly switch to using specialist pharma products offered by airlines rather than shipping goods as general cargo, notes Dirk de Rooij, commercial director cargo at Seabury. That reflects a regulatory drive to improve the supply chains of medicines, underlined by programmes like the EU’s good distribution practice (GDP).

Modal shifts

In terms of modal market shares, mid-value pharma continues to shift to sea freight, notes de Rooij. Low-value pharma has never been moved by air freight because of the relatively high cost of this mode of transport. Meanwhile, the proportion of high-value pharma shipped via air freight remains stable. And breaking it down further, cool pharma is increasingly carried by air whereas non-cool pharma is shifting to ocean shipping, de Rooij observes.

Selection criteria

So, how do shippers go about selecting the forwarders and airlines that will move their products? There are several factors in the decision. Jonathan Brand, head of ZAX markets at pharmaceutical company Sandoz, feels that transparency is key – communication through the entire supply chain. For instance, it is no good having a shipment of drugs sitting at an airport with the recipient unaware that it has arrived. Stock could be unfit for purpose by the time it is collected, he observed.

For Ryan Viegas, head of logistics for APAC at pharmaceutical company Teva, there are three important criteria: First, the element of trust. “You must do what you say and say what you do. Second, compliance – certification by international agencies. And third, we need to know which airline and airports a forwarder will use,” he says. “The pharmaceutical company bears the responsibility for its products, so we have to understand the routeing and so on,” he emphasises, pointing out that there are some airports and airlines that are more “pharma-friendly” than others.

There is also the question of cost, of course, when it comes to choosing whether to move goods by air or by sea. Uttam Prakash, regional demand planner at pharmaceutical manufacturer Ranbaxy, says that as little as 5% of shipments are moved by air, with the vast majority being sent by cheaper and slower ocean freight. The urgency of the shipment, its sensitivity to temperature excursions, and its market price all come into play when making this decision.

Certifications such as GDP or the IATA CEIV scheme are hugely beneficial, according to forwarders. Of course, finding a direct routeing is the ideal way to move temperature-sensitive goods, but this is not always possible, so forwarders do their best to ensure they have the right procedures in place at transit points and visibility at destination – not just at the point of origin – outlines Peter van Domburg, branch manager for BeLux at forwarder Expeditors. Working with the right partners and applying the right mindset are crucial elements too, he says.

Jimmy Nares, section chief of aviation marketing at Miami International Airport, says CEIV has proven to be of “tremendous value at MIA. Miami is not a major producer of pharmaceuticals, but US$3.4 billion worth was exported in 2016” because of the airport’s connectivity and its participation in the CEIV scheme, which seeks to harmonise standards on a global scale.

Risk management

The selection of appropriate partners and compliance with recognised standards help to mitigate risk in the movement of vital medical supplies. In the event of damage or loss, the airline, forwarder, handler, airport or other supply chain party must be held accountable, believes Prakash.

In some parts of the world, pharma companies go to what may seem extraordinary lengths to ensure compliance at every step of the way. In India, for instance, Viegas explains that for the road leg of a pharma shipment from Goa, there would first of all be a requirement for all the appropriate airport licences and registrations pertinent to the vehicle and driver. The truck would then be escorted to ensure it followed the prescribed route, was never left unattended, and that temperature checks were carried out and reported back at the scheduled rest stops.

On arrival at the airport, a checklist would have to be completed. Using the same driver-escort combination too regularly would be avoided in order to prevent corruption. Once or twice a year, the truck would be tailgated to ensure everything was done correctly. But this approach would not be appropriate everywhere, Viegas notes.


But the use of technology also helps reduce the need to dedicate manpower to overseeing shipments. Real-time reporting of data such as location temperature, humidity or drops can help problems to be identified quickly and resolved immediately, observes Alban François, vice president global cargo at Brussels Airlines. “It’s not about blame; we just have to get it fixed and avoid the same thing happening in future,” François notes. François considers that standardised tools used worldwide would be ideal, as they would enable data to be shared globally.

Remo Hanselmann, regional director Africa for World Courier, points out that it could be costly to develop and implement a single tool that would report all of that data – but Nathan De Valck, chairman of the Pharma.Aero initiative and Brussels Airport Company’s cargo & product development manager, is optimistic about the current capabilities available. “You can use what you’ve already got – it’s surprising what you can do,” he says.


Off to a flying start

In its first year, membership of specialist air freight association Pharma.Aero has already reached 16, including three major pharmaceutical shippers, writes Will Waters

The fledgling air freight specialist grouping Pharma.Aero has got off to a strong start in its mission to promote the reliable end-to-end transport of pharma shipments by air, with the ultimate goal of creating certified lanes for pharma transport.

Founding members Brussels Airport (BRU) and Miami International Airport (MIA) last May announced the creation of the organisation, which aims to create a network of leading airport cargo communities that have embraced IATA’s CEIV Pharma standard and that are looking to further build on the expertise gained from the CEIV programme. Pharma shippers and other pharma logistics stakeholders can also join if they share the objectives and values of the organisation, although the intention is to focus on quality and content, not to have as many members as possible, the organisation stressed.

Nevertheless, by the time of its formal launch last October, Pharma.Aero’s membership had already grown to seven with the addition of fellow CEIV early-adopter airports Singapore Changi (SIN) and Sharjah International (SHJ), along with Brussels Airlines, Singapore Airlines Cargo, and Brinks Life Sciences. And at this year’s World Cargo Symposium in March, the association unveiled a further nine members – including, crucially, major pharmaceutical shippers Pfizer, Johnson and Johnson, Merck Sharp & Dohme. Other air cargo stakeholders bringing the total number of companies in Pharma.Aero to sixteen members include DHL Temperature Management Solutions, Expeditors, Chatrapati Shivaji (Mumbai) International Airport, EuroAirport Basel, 4Advice, and e-Cargoware.

Fostering collaboration

The worldwide Pharma.Aero platform says it aims to enable like-minded airport communities, pharma shippers, and other pharma logistics stakeholders to foster strong collaboration among themselves. By sharing expertise, data, best practice, and jointly working on innovative regional initiatives − with an emphasis on the IATA CEIV programme − airports and their operators will achieve excellence in reliable end-to-end transport of pharma, for the benefit of shippers and patients.

The organisation engages in three main areas of activity: Networking and events − bringing stakeholders together and creating an “intense dialogue” between a selected group of individuals and companies; Standard-setting − benchmarking, creation of standard protocols, joint projects, and innovation; And the establishment of a network of excellence for its members − sharing best practices, for audit support, and setting up a knowledge centre.

These are intended to lead to the ultimate goals of the organisation “to realise, together with the pharma manufacturers, lane certification for pharma transportation by air, increasing quality and transparency”.

Pharma.Aero chairman Nathan De Valck believes the latest wave of companies joining, including the crucial addition of the major medicine manufacturers, suggests the organisation is on the right track. “Within a short span of six months, Pharma.Aero has achieved our top priority of expanding the membership base to other stakeholders in the pharmaceutical supply chain,” he notes. “The recent addition of the three global pharmaceuticals shippers marks a significant milestone to the organisation, as we will be able to collaborate closely with the pharmaceutical shippers on projects to achieve a reliable end-to-end air transport for pharmaceutical cargo.

“Together with the air cargo stakeholders, we will develop global pharmaceutical trade lanes, implement best practices, and share market knowledge and expertise.” He stresses that Pharma.Aero welcomes other IATA CEIV airport communities, shippers, airline carriers, logistics companies, and other pharmaceutical stakeholders “with like-minded goals” to become members.

Shipper endorsements

Explaining Pfizer’s involvement in the initiative, Eddy Weygaerts, a senior manager for logistics delivery at Pfizer, commented: “The platform will support longer-term projects and initiatives, which would benefit all pharma transportation players, regulators and shippers, ensuring high pharma product compliance and visibility in the air supply chain.”

And Gino Vleugels, Johnson & Johnson’s senior manager for temperature control, EMEA, noted: “Through the collaborative projects embarked on by the organisation, we are confident that our patients will benefit from the outcomes. It is another big step to optimize the service towards our end customer.”

Debby Mattys, MSD’s assistant director of compliance, EMEA, noted: “The Pharma.Aero initiative is the ideal platform to foster a targeted collaboration between the air transportation community and the pharma-business. As a strategic member of Phama.Aero, we aim for long term transformational projects that will benefit all stakeholders, including our patients.”

Commercial value

MIA recently highlighted the commercial value it believes it has gained from the airport’s investments in specialist pharma handling capabilities and its involvement in initiatives like CEIV and Pharma.Aero. The value of pharmaceutical freight shipped via MIA surged 48% in 2016 to $4.4 billion, driving up the total value of international freight originating from and destined to MIA in 2016 by 8% to $57.3 billion in 2016. Since 2010, when the total value of pharma shipments was $1.8 billion, MIA’s pharma trade has grown by 140%.

Glyn Hughes, global head of cargo at IATA, congratulated Pharma.Aero’s collaborative initiative for uniting companies “around the central theme of linking CEIV certified entities and trade lanes to improve industry logistical networks to achieve supply chain excellence”. Hughes said the joint programme “enhances the air cargo industry’s value proposition and adoption of global standards in transporting time and temperature sensitive pharmaceuticals. Ensuring patient safety throughout the logistical journey is a collective responsibility, and this is a great demonstration of that ideal.”