Propelled by continuing growth in the sector, air freight’s pharma logistics operators keep honing their capabilities with dedicated facilities, improved visibility and tighter collaboration, reports Ian Putzger
Continuing growth in the pharmaceuticals sector – and its carriage by air – has encouraged air freight carriers, airports, handlers and other logistics operators to invest in, expand and enhance their capabilities with dedicated facilities, improved visibility and greater collaboration – and, increasingly, obtaining certification for their processes and infrastructure.
At major gateways around the world and at airports located close to big pharma manufacturing clusters, cargo handlers are adding or boosting infrastructure to handle pharma shipments. Swissport inaugurated a dedicated pharma terminal last year at Brussels airport, close to one such major pharma cluster, and is working on a cross-dock facility in co-operation with Basel airport – in the heart another European pharma manufacturing hub – that will allow seamless loading of active temperature control ULDs. It will come onstream in early 2021 at the latest, says Hendrik Leyssens, Swissport’s vice-president for global cargo operations.
Worldwide Flight Services (WFS) opened dedicated pharma facilities in Copenhagen and Paris in September. And earlier last year it unveiled a GDP-compliant pharma terminal at New York’s JFK airport in partnership with Swiss World Cargo for the airline’s exclusive use.
Swiss WorldCargo has entered the new decade with significant developments on the ground to strengthen its pharmaceuticals capabilities. In the Americas it has also opened its Cancun station for pharma exports. So far, it has handled only inbound pharma shipments.
Taj Mahal for pharma
In Mumbai, a new facility that is bringing a four-fold increase in temperature-controlled space is due to open during the first quarter. Local staff refer to the building as the ‘Taj Mahal for pharma’, reports Andres Perez, Swiss WorldCargo’s head of business development.
These investments are fuelled by continuing growth in pharma and healthcare traffic – unlike the general cargo sector. Airports, handlers, airlines and forwarders report gains in this segment in the past year.
“In the general market, 2019 has been a difficult year for all of us,” remarks Perez. “Pharma is less dependent on the general economic situation. We were able to slightly grow in the pharma field.”
Slowing growth
Nevertheless, the growth momentum in pharma traffic has slowed down, reports Nathan De Valck, head of cargo product and network development at Brussels Airport Company and chairman of the Pharma.Aero industry collaboration initiative. “In past years, we had tremendous growth,” he notes. “It’s gone down; it’s not 20%, 30% any more, but it’s still growing,”.
The outlook remains positive. According to pharma market research published by the Business Research Company, the global pharmaceuticals market will grow by around 25% from its level in 2017 to reach $1.17 trillion in 2021.
“Looking ahead, we remain optimistic on the growth of Singapore’s air pharma trade,” remarks Lim Chiang Kat, managing director for air hub development at Singapore Changi Airport, another leading player within Pharma.Aero. “Pharma will remain as a major global air freight growth driver with the growing and ageing population as well as the rising middle class.”
He added that pharma research organisation IQVIA has forecast industry sales to grow 4-6% annually between 2019 and 2023 to surpass US$1.5 trillion.
“Forwarders are consolidating pharma business; airlines tell us that a big share of their volumes will come from high-value pharma and stakeholders keep investing in additional pharma facilities. This will continue,” says De Valck.
Several of the recent additions to the facility landscape have been dedicated pharma terminals, such as in Brussels, Paris, Vienna and Copenhagen.
Separation of facilities
Shippers increasingly call for separation of pharmaceuticals from other perishables, notes Perez. In former times they were put together in the same facility, in the same fridge, but this is no longer accepted, he pointed out. “In Swissport’s new facility in Brussels they use forklifts with white wheels for pharmaceuticals, forklifts with black wheels for perishables,” he adds.
Dedicated terminals offer a number of advantages, such as temperature-controlled loading docks. In regular cargo buildings the cold storage area is often in the back, so freight brought to the airport spends some time in uncontrolled conditions. Moreover, truckers delivering to a pure pharma terminal do not have to wait in line behind drivers brining in general cargo.
The separation is not feasible in all markets. “It depends on the scope of the operation and the size of the market,” says Leyssens. An investment of the scope of Swissport’s recent new facility in Brussels requires a significant market size or a share of the business, he explains.
Availability of space is another factor. “We don’t really have the land right now to accommodate a dedicated pharma facility,” says Emir Pineda, manager, aviation trade and logistics in the marketing division of the Miami-Dade Aviation Department, which manages Miami International Airport.
Leyssens stressed that in locations where a dedicated facility is not viable, there is still scope for measures that go in this direction, such as setting up dedicated lanes or storage areas. Swissport operates its current facility in Basel as though everything coming through the building were pharmaceuticals.
Eliminating temperature excursions
To a large extent, temperature excursions have been traced back to the ramp, notably in locations prone to severe climate conditions. Swissport has invested in a temperature-controlled minivan in certain locations to move loose pharma shipments. This reduces exposure to outside temperature to the transfer between the vehicle and the aircraft, according to Leyssens.
Brussels was the first airport to deploy special pharma transport vehicles with active temperature control airside. Having acquired four units in 2016, it added five more two years later.
“We see in corridors where pharma dollies are used, deviations are almost gone,” observes De Valck. While the vehicles used at Brussels are very effective, they are not a silver bullet, he adds. “They are not for every shipment. There is a cost aspect,” he says.
Cool chain technology
Cool chain technology keeps moving forward. Last summer Swiss approved CSafe’s RAP container for its fleet of widebody planes. Perez says that the carrier has to make a business case for every new container to assess its viability.
Meanwhile CSafe has launched a passive packing solution called ‘AcuTemp Plus’ which features high-performance Vacuum Insulated Panels and single temperature phase change material. According to the provider, this represents a new generation of passive packaging technology to address the requirements for shipping pharmaceuticals, clinical trials and cell and gene therapies.
“Over the last two years we’ve seen a lot of activity in the passive field,” remarked Perez. He anticipates a knock-on effect from this on the improvement of active solutions. “I believe active container providers will have to do a lot of development to stay competitive with all the developments in passive solutions,” he reflects.
Shipment visibility
A lot of activity is geared towards improving shipment visibility, allowing customers a better grip on the whereabouts of their cargo as well as its ambient conditions. “Shippers are embracing hybrid sensors like Bluetooth,” observes Patricia Cole, global head of DHL Temperature Management Solutions, adding that costs have come down considerably, which is fuelling competition among technology providers and helping a broad adoption among customers.
“For us, every shipment has some tag or sensor. Everybody – from manufacturers to warehouse operators and 3PLs – is trying to use data from IoT devices,” she remarks.
Leyssens thinks the time is not right for handlers to invest in tracking sensors themselves, citing a broad variety of technologies jockeying for position and the absence of a unifying standard. “There are too many different devices out there,” he comments.
“It’s either shippers, forwarders or container providers who are putting in temperature readers. Airlines and handling agents are not heavily involved in that yet. It’s probably a question of time,” he continues.
Perez sees the shippers in the driving seat. “If we put something in, it’s not certified by the shipper. The shipper decides, we enable,” he says. He expects IoT monitoring to build up traction, but doubts that it can gain full traction in 2020.
This does not mean that air freight providers are stuck in limbo with regard to data-flow capabilities. Brussels has blazed a trail with the establishment of its open data-sharing platform ‘BRUcloud’, which includes a pharma dashboard for users.
Community systems
Over in Miami Pineda is looking to move in a similar direction. “We’re in the beginning stages of trying to develop a cargo community system. I believe this will enhance our airport by making it more efficient in the processing of cargo,” he says, adding that this should lead to a reduction in temperature deviations.
Changi airport, which established the Pharma@Changi initiative in late 2017 to allow members to exchange information, assess trends and technologies and implement pilot projects, has played a leading role more recently in the efforts of the Pharma.Aero alliance to advance digitisation. This is paving the way for a variety of data from different IT systems to be accepted and displayed on a single dashboard. The idea behind this is to enable a coherent and uniform stream of data at shipment level from door to door via the platform.
In the second phase of this project, which was recently concluded, a prototype ‘Global Pharma Tracker’ was developed and tested with live data on the Singapore-Brussels sector. According to Lim, a white paper summarising the key findings of the project will be published in the coming months.
“As next steps, Pharma.Aero and (technology developer) Nallian will be launching an early adopter programme,” he adds.
The pool of Pharma.Aero members will likely grow as more operators are going for CEIV accreditation, which is the basis for Pharma.Aero participation. A number of operators and airport communities, such as Dallas/Fort Worth and Edmonton, are going for the CEIV badge. “CEIV positions you ahead of the game in terms of transportation,” remarks Pineda.
On Perez’s radar, certification is going to be a must have. “I strongly believe CEIV is not just an added value, it is going to be the industry standard. If you don’t have CEIV, you’re going to lose business,” he predicts.
Already shippers are asking for it. “It does come up in RFPs,” says Cole.
The proliferation of CEIV certifications and Pharma.Aero participants opens the door to more pharma corridors, something Swissport is looking to further develop. “We are in several conversations,” reveals Leyssens.
“CEIV corridors are high on our agenda,” says Pineda. Plans for such a corridor involving Miami, Brussels and Amerijet have not materialised, as the carrier decided to deploy its capacity elsewhere, but eventually this corridor will be established, Pineda says.
Meanwhile his department has been working with several airports in Latin America that have CEIV accreditation or are in the application process.
Montevideo expansion
One airport in Latin America that has been very active in developing its pharma capabilities is Uruguay’s Montevideo Free Airport (MVD), where work began last October on the second phase of its Pharma Hub, which will add 1,200 sqm of dedicated space. According to the airport authority, its growth in pharma traffic has exceeded expectations, prompting the start of the second phase, which is expected to be ready in August. MVD, which is CEIV and GDP certified and is a founding member of Pharma.Aero, says its existing pharma hub is used by a number of global pharma players “for cross docking operations to the large regional markets such as Brazil and Argentina, for late customisation and conditioning activities, as well as for their managed access distribution to South America”. Factors positioning MVD as a trusted partner for regional pharma distribution include the reduction of clearance times to large markets, the safer, traceable entry to complex markets, the possibility to perform conditioning activities from a tax-free zone and the agile customs procedures, the airport says.
Clustering of pharmaceuticals production
According to De Valck, the rise of corridors is partly propelled by the clustering of pharmaceuticals production and shipping. “This brings a need for corridors and transparency of what is possible,” he says.
He does not think, however, that traffic will end up being concentrated in a few high-volume corridors. “It’s not going to be a small number of corridors. There will always be others, but this does raise the bar,” he reflects.
Cole sees the concept in the early stage of its adoption. “We’re not seeing frequent enquiries in RFPs about pharma corridors. It’s more futuristic at this point,” she remarks.
In any case, efforts in the industry to collaborate on pharma traffic have been gathering momentum. Swiss is working closely with handlers and ULD providers. “Customers want to see a seamless operation,” says Perez.
Naturally this extends to the truckers that provide the transport to and from the airport. With truckers that cover local pick-up and delivery, “it is absolutely important that it is done in a temperature-controlled way and that handlers and forwarders check it”, stresses De Valck.
For the longer distances associated with road feeder services, the use of temperature-controlled trucks is a requirement of the CEIV programme, he notes. Again, checking is important, as the trucker selection is done by the airline.
“Not every airline is CEIV certified. It is up the shipper and forwarder to check,” he says.
