Maintaining the integrity of a shipment of fruit or vegetables that needs to move quickly to market and avoid wide temperature fluctuations is essential. But the value, effectiveness, and safety of some pharmaceutical products can be impaired or destroyed by even comparatively small changes in temperature, and the regulatory requirements surrounding their transport are getting increasingly strict at the same time as their importance to air freight grows.
The global pharmaceutical logistics market was valued at US$64 billion by the International Air Transport Association (IATA) in 2013 and now forms a big part of the cool-chain market segment, particularly by air. But at the heart of the effort to ensure these valuable commodities – in human, as well as financial, terms – reach their destination in the same condition they left their point of origin, are a number of regulatory programmes of required standards, national and supranational.
Steven Polmans, head of cargo at Brussels International Airport – a key player in the move towards setting high cool-chain shipping standards (of which more later) – observes: “That is part of our life… We only see more regulations and legislative standards. This will not change. But it will be crucial to harmonise this as much as possible. To deal with more regulation is manageable if we have the same regulation as much as possible.”
The growing complexity of supply chains is another reason why policy-makers worldwide are enforcing stricter regulations for manufacturing and logistics. Alongside well-known and well-respected supranational regulatory standards such as the EU’s Good Distribution Practice (GDP), governments and international organisations such as the World Health Organization (WHO) have increased their requirements in this field. Moreover, explains Renate de Walle, director for pharmaceutical logistics at Air France-KLM-Martinair Cargo, one of the many carriers that now offer a specialised temperature-controlled shipping product: “While the focus used to be on cool-chain management to reduce temperature excursions, the scope has now expanded to include issues related to security and counterfeiting. I think that regulations will become only stricter, fuelled by rising global demand and growing requirements for monitoring to assist in the proof of chain of custody and increasing questions from regulators related to monitoring methodology, as well as more global regulations to monitor humidity as well as temperature.”
High standards imposed on the pharmaceutical industry offer clear advantages to the patients who depend on their products. “Enforcement of regulations and associated guidelines provides assurance to the consumer that approved and acceptable quality levels are met, and that similar products from different manufacturers are, in essence, equivalent in safety and efficacy,” she observes.
Pointing to that growing complexity of the logistics process, de Walle insists that it has become vital to “clarify mutual expectations between the stakeholders involved. A supply chain is only a sum of its moving parts. Logistics partnerships are increasingly the cornerstone of a successful, low-risk temperature control supply chain,” she warns.
Another carrier that has developed a sophisticated cool-chain product is IAG Cargo. Global head of pharmaceuticals and life sciences Alan Dorling agrees that having high standards is absolutely essential, given the importance of these extraordinarily valuable pharma products that are being moved. However, he points to the fact that not only are there large numbers of national and supranational bodies all offering standards and guidelines on pharma shipping – all suggesting something slightly different – but even the same protocols can be interpreted differently. Thus, for example, IAG Cargo follows IATA’s Chapter 17 (Air Transport Logistics for Time & Temperature-Sensitive Healthcare Products, which addresses the requirements to transport time and temperature-sensitive healthcare products, and sets standards that cold-chain stakeholders are required to meet) overlaid with the EU’s GDP standards – while also answering to the UK’s own national competence authority, the Medicines and Healthcare Products Regulatory Agency (MHRA). More and more of the service level agreements (SLAs) that IAG Cargo signs up to now incorporate quality standards vis-à-vis pharma shipping that incorporate the strictures laid out by these bodies.
One major effort to offer a global standard for pharma shipping standards is being undertaken by IATA. Developed originally in conjunction with Brussels Airport, the programme offers a worldwide standard for the handling and transportation of pharmaceutical goods: all those taking what is known as the CEIV (Certificate of Excellence for Independent Validators) Pharma certification programme receive the same training and are audited against the same standards.
The Belgian gateway’s cargo team had initially worked on developing the programme together with the pharma industry and some other stakeholders. Speaking in December last year, Polmans explained: “By joining forces with IATA, the programme came up to full speed.” The first wave of assessments and training, which involved 11 companies, has now been completed and the first certificates were handed out towards the end of 2014.
The need for a single worldwide quality standard is evident, Polmans insists. “Even those who are working against the European Commission’s GDP standards have different set-ups, depending on which part of the world they are in. Even in Europe we see differences. And only a limited number of players in the supply chain can really be certified according to GDP standards. This is for me the most important reason for the need of the programme: it will create trust within the industry that air cargo is a reliable solution for the transportation of pharma and reduce waste of products due to a deviation in the cold chain. The result will be more pharma shipments, and those who have the certificate will benefit more.”
SDV was among that first group of course participants to recently pass the IATA/Brussels Airport CEIV Pharma training programme. Peter Claessens, sales director for SDV Benelux, commented: “Healthcare and life science is one of SDV’s fastest-growing business industry verticals, serving pharmaceutical companies, the nuclear medicine sector and medical device manufacturers. Participating in the GDP certification programme in Brussels has taken us another step forward”.
But it seems that the CEIV programme has been welcomed throughout the air cargo cool-chain, not just by those directly involved in it. Certainly the Cool Chain Association (CCA), the not-for-profit trade body formed to improve the quality, efficiency and value of the temperature-sensitive supply chain, has welcomed the initiative. According to CCA chairman Sebastiaan Scholte, CEIV represents a big advance. Like Polmans, he sees it as a valuable move towards the pharma air cargo shipping business being able to look as one to a single, common quality benchmark.
Certification by IATA of any component of the air freight supply chain – whether handler, airport, forwarder or trucker such as CEIV Pharma-accredited Jan de Rijk (of which Scholte is also CEO) – allows shippers to make informed choices as to whom they will trust with their shipments. Moreover, Brussels is establishing itself as a true pharma cargo hub, the first of many, Scholte hopes.
Of course, CEIV Pharma is not the only industry standard for those shipping temperature-sensitive goods, but it has the advantage of specialising in air cargo, unlike – for example – the aforementioned GDP. Moreover, the CCA has its own quality measurement for the logistics industry dealing with temperature-sensitive products, its ‘Cool Chain Quality Indicators’ (CCQI), a standard that Scholte would like to see form part of the International Air Transport Association’s Cargo 2000 (C2K) quality standards.
“To stay at the forefront of the industry takes strong commitment to continuous innovation by listening to customer needs, to keep building on our successful legacy of shipping pharmaceuticals for more than 20 years and to boldly chart a new path when it makes sense to do so,” argues de Walle.
Air France-KLM-Martinair Cargo, IAG Cargo, the big American airlines and many others have all developed specialised, guaranteed temperature-controlled products, but they have also looked to work closely with supply chain partners to perfect the process. For example, de Walle points out that to stay abreast with what is most important to pharmaceutical providers, her airline group has initiated informal discussion platforms in order to exchange views with pharma shippers on what matters most. The most recent conference was co-organised with Amsterdam Airport Schiphol (AAS) and the Dutch Association of Research Quality Assurance (DARQA) and was called ‘GDP Practice in the Aviation Industry’.
The main action points to come out of the conference, she says, were twofold. First, the need to improve supply chain quality and thereby the product integrity of the pharmaceutical goods, alongside enhanced communication between shippers, forwarders and the airlines. Transparency and collaboration is key to further improving the supply chain quality. Secondly, decisions on how exactly GDP should be implemented both by airlines and the air cargo industry more widely need to be based on a risk-based approach where the product integrity of the transported goods should always be the goal, she says.
IAG Cargo began investing heavily in its pharma business about three years ago – in both staff and facilities – and now boasts pharma experts in every key trade lane, Dorling says, in the UK, in mainland Europe, in the US and in Asia Pacific. Indeed, IAG Cargo took on individuals such as Dorling himself who come from a biochemical background to complement the existing cargo experts at the carrier. Working alongside IAG Cargo’s 100 quality-approved, GDP-compliant stations, the carrier’s 32 pharma specialists are able to work closely with shippers and forwarders in a genuinely collaborative partnership to ensure safe and secure pharma shipping.
Also at the heart of the effort is the state-of-the art facility dedicated to IAG cargo’s Constant Climate service at the carrier’s base at London Heathrow. Operating on a dual-hub strategy, there is a similar capability and the same temperature-sensitive handling procedures at Iberia’s base at Madrid. Plus, IAG Cargo is among the global freight carriers to have invested in communications and track-and-trace technology that offers its customers near real-time access to not only the current condition of their pharma consignment but also its full shipment history, Dorling claims.
AF-KLM-Martinair Cargo and IAG Cargo might be only two of the more than 30 airlines based around the world that claim to offer dedicated temperature-sensitive shipping capacity plus the infrastructure to handle these delicate perishables, but the small number of carriers who can genuinely offer such a facility is perhaps measurable on two hands.
The right facilities
Of course, the airlines can do only so much. The right facilities must also be available on the ground, hence IAG’s heavy investments at Heathrow. As de Walle explains: “From an infrastructure perspective, any carrier wishing to support pharmaceutical shipments must ensure that they have the right temperature-control technology and process in place to keep pharmaceuticals at the correct temperature – from the moment they arrive at the airport, to the point at which they are handed over to the customer at the destination. This increasingly requires the building of specialist warehouses with temperature control zones kept at a variety of temperatures.”
In Europe and the US, to which the vast majority of pharma is flown, facilities are generally up to the job of maintaining the integrity of temperature-sensitive cargo (the weakness in the air freight cool-chain is when the consignment is on the tarmac, Scholte observes). Facilities are far less sophisticated beyond those two continents, where pharma trade flows are lighter and as a consequence investment in refrigerated rooms and related infrastructure is less attractive. Nevertheless, any handler or operator who does invest in such facilities on lighter pharma trade routes is well placed to become the market leader, in that way possibly making the necessary investment that much more of a sensible financial proposition.
Trying to do the job on the cheap is not an option, Scholte considers. Effective cool-chain facilities and infrastructure are by their nature expensive – lowering the cost can only really come through economies of scale in pharma handling and shipping, he says.
But any improvement in one aspect of the cool-chain shipping process also seems to have a consequential positive knock-on effect on other aspects of the process. For example: “Brussels always had a good number of GDP-standard warehouses and temperature-controlled rooms, but we have seen that by increasing standards and training, facilities and procedures are also levelled up,” Polmans remarks.
One possible way round the problem of handlers or airlines not having sufficient incentive to build and maintain dedicated cool-chain facilities themselves at their cargo hubs, because they lack sufficient economies of scale in relation to pharma shipping, might be for airport operators to step in and perform that role.
Dorling suggests just this, pointing to Hyderabad’s pharma zone as evidence of how this can work well. The airport operator can charge users, whether handlers or airline self-handlers, for every tonne of temperature-sensitive cargo they move from the facility. If the infrastructure is there, it may also encourage further pharma volumes through the airport.
A changing business
The recent economic and air cargo industry crisis has forced everybody to re-examine their business processes, cost levels, partnerships and way of working perhaps more than ever before. This has had an impact in cool-chain shipping as in other areas of the logistics business, as shippers seek to minimise their outgoings and handlers, carriers and forwarders look to maximise their operational efficiency.
Moreover, though the total volume of pharma moving by air is increasing all the time, and this high-value, price-inelastic commodity business is being sought by all the big carriers and many of the hub airports, there is no doubt that there is now a greater increase in ocean-going pharma shipping – thanks to the technology improvements in ship-based cool-chain transport and possibly to the cheaper price of the sea mode proving particularly appealing during the global economic downturn. Thus, says Scholte: “The air freight industry will have to maintain a clear focus on providing what the temperature-sensitive supply chain requires if it is going to take its share of the pie.”
However, while IAG Cargo has witnessed some modal shift for pharma transport moving towards ocean cargo, Dorling believes it is now seeing some reversal in that trend. Not only is air freight quicker, it is also more secure, he argues.
Other changes in the nature of the pharma shipping business Dorling has observed include the global pharma industry making a concerted effort to streamline inventories wherever possible. That means more urgent shipping requirements, though lower inventory costs.
He also points to the rising number of worldwide requests for tender in relation to pharma contracts, also likely to lead to increasing demands for temperature-sensitive shipping. And, finally, Dorling notes the growing demand for certain pharma commodity categories – vaccines, insulin to combat the ever-more widespread obesity-related Type 2 diabetes problem, blood plasma and oncological cancer treatment drugs.
As for de Walle: “One of the most apparent changes of late resulted from the implementation of GDP, which means that ambient products need to be monitored between 15 and 25°C. This has expanded the market for temperature monitoring, since not only the 2-8°C products but every medicine needs to be monitored. This implies a rise of almost 600% in value and even more in quantity.”
Other trends she has noticed include increasing demand for shipping pharmaceuticals with a combined temperature range (e.g. 15°-25°C at origin and 2°-8°C solution at destination), as well as more demand for solutions for shipping pharmaceuticals either securely or extremely fast.
It’s not all about pharma
There’s more to the perishables business than pharma, as important as life-saving medicines are, and things are changing in other parts of the cool-chain air logistics business. “Moving perishable goods is indeed of growing importance for Kuehne + Nagel’s forwarding business and the amount of perishables moving by air is steadily increasing,” says Dennis Verkooy, corporate head of perishables air logistics for the global freight forwarder.
Moreover, he continues, for certain perishables products, like fruit or vegetables, customer requirements for K+N and other cargo agents to secure the cold chain over a longer period of time are increasing. So it is not just in the area of pharmaceutical shipping that the demands being placed on cool-chain integrity are getting ever more intense – although the lessons learned from pharma’s demanding requirements may prove valuable throughout cool-chain air logistics.