As pharma business continues to grow, airports around the world are adapting their facilities and engaging with customers in order to attract more of this healthy cargo, writes Will Waters
Pharmaceutical and life-science products are one of the few commodity types that have seen consistent air freight growth in recent years. Shipments often have a high value, a short life-cycle and a need to meet strict regulatory controls, making air freight or express a natural logistics choice.
With airlines and forwarders all seeking to capitalise on this, airports in the last few years have tried to improve the environment for their customers, either by building or supporting the construction of new temperature-controlled facilities or attempting to improve communication or logistical flows at the airport. But the heightened needs of the pharma and healthcare sector mean that it requires regular and reliable information flows about its shipments, and this remains a challenge for cargo airports and their customers.
Amsterdam Schiphol, long known for its expertise in cool-chain management – particularly when it comes to flowers – has been increasing its focus on pharma and life sciences in the last three years, under the guidance of Bart Pouwels, who joined from DHL Express. Pouwels had been one of DHL’s so-called “industry managers”, covering the life-sciences sector, where he learned from pharma and biotech companies about their requirements in terms of distribution.
He says pharma and biotech companies complain that their freight forwarders describe the airport as “a black box”, where it is impossible to get information about the whereabouts, status or progress of shipments – or to give updated instructions. Pouwels says: “This is ridiculous: we know where every cargo shipment is going at the airport, but we need to make it more transparent so the freight forwarder knows what is going on.”
He says the airport’s role in this, as in many instances, is to connect people with each other. In relation to the pharma business, Schiphol has attempted to do this in several areas: it has led several trade missions, set up conferences at industry events, and brought all parties in the supply-chain together.
Schiphol has the advantage of support from the wider Amsterdam logistics and business community in attempting to build the area as a distribution point for various industries, including life sciences, co-operating with the Port of Amsterdam, the municipality of Amsterdam and other stakeholders on trade missions overseas in which they discuss how the Amsterdam region can support businesses.
This collaborative approach has helped influence a number of decisions, such as the start up by KLM of three-times-weekly freighters from Mumbai to Schiphol.
“We organised a roundtable and said let’s discuss the issues in the pharma supply chain from India to Europe,” says Pouwels. The market clearly identified that it needed more-reliable capacity, “because at that time last year, there was only one passenger flight from Amsterdam to Mumbai, and the pharma industry said it could never rely on this network ‘because if we offer 10 to 15 tonnes, we are kicked off because it is already booked’.”
Pouwels says all he did was coordinate and orchestrate the meeting, listen to shippers’ requirements, “and translate it into solutions that were workable and practical in Amsterdam”.
Making available airside access for logistics companies, such as Panalpina and Rhenus, has been another potentially attractive move for pharma customers. Although not an essential requirement, it speeds up the movement of temperature-sensitive cargo between aircraft to handling facility and can cut transit times by more than a day. “You save time and you save the risk of temperature excursions,” observes Pouwels.
Another initiative is the creation of “a shared vision strategy, and I am now interviewing the different stakeholders to get their input – airlines, freight forwarders, truckers and handling companies – and by the end of the year we hope to have this strategy document in place,” Pouwels says.
Brussels Airport is another that has taken a broader logistics-community approach to temperature-controlled products such as pharmaceuticals, and it is one of 11 partners that have taken an active role in the ‘GPRS air cargo-monitoring’ project. Focused on improving the air cargo supply chain for time- and temperature-sensitive cargo like pharmaceuticals, the Flanders Institute for Logistics presented its final report on the project this summer. Meanwhile, other stakeholders at the airport, including handling companies, forwarding agents and trucking companies, have invested in dedicated warehouse space and adjusted their processes to optimise the important pharma flows at BRU, says Johan Leunen, cargo marketing manager, for Brussels Airport Company. An example is the opening of a dedicated first-line pharma hub located adjacent to the cargo apron, “allowing the shortest possible transit time on tarmac”,” he adds.
“In addition, we are building up and passing on our know-how in training schools and during courses, in cooperation with local and international organisations such as CTC and IATA,” he adds. He says the airport is also “focused on being involved with the development of new standards or any changes in guidelines and regulations for pharmaceutical products”, and has actively participated in the development of the newly introduced IATA pharma checklist.
Miami is another airport that has benefitted from its position as a specialist perishables airport and seen increased pharmaceuticals flows. Marketing director Chris Mangos says the airport handles 71% of all perishables transported by air in the Americas, and “pharmaceuticals have found their place among the countless perishable products we handle. In 2012, we handled 19.7 million kilos of pharmaceuticals, a 16% increase over the previous year, valued at $2.6 billion. We know that several airlines are involved in their transport and market their abilities through MIA and other gateways.”
Changi Airport Group (CAG) is also working with its partners to promote the Singapore Changi airport’s temperature-sensitive service offerings and capabilities to shippers in countries such as Indonesia, Australia and New Zealand. And the airport is optimistic its status as a regional air logistics hub will continue to bring growth in perishables flows.
James Fong, assistant vice president for cargo and logistics development, says: “CAG is keen to develop the pharmaceutical cargo segment, which grew 7.3% in 2012. In fact, 30 of the world’s top pharmaceutical companies have set up regional headquarters in Singapore to leverage on Changi’s connectivity, to better manage regional supply chains in Asia.”
He says that with the increasing focus on the wider perishables trade, CAG has also been working with Dnata to develop its own perishables handling centre at the airport. This opened in August, “providing logistics players with more options when it comes to handling temperature-sensitive cargo”.
Elsewhere in Asia, Hong Kong handler Hactl is exploring the idea of taking things to another level and developing facilities that can act as a distribution hub for pharmaceutical products, according to MD Mark Whitehead. This would involve using Hactl’s logistics subsidiary Hacis to provide to-door distribution services as well as offering value-added logistics services within the Hactl infrastructure.
Regional pharma focus
But it is not just the big hub airports hoping to cash in on the growth of pharma volumes. For example, just in Germany alone, several regional airports have plans to expand or develop their temperature-controlled handling capabilities, with pharmaceuticals volumes firmly in mind. Dusseldorf Airport says it is enlarging its cooling facilities, “which can be used for different perishable goods, including pharmaceuticals”.
Meanwhile, the Berlin area has several major pharma companies with air cargo demand, such as Bayer and Altana, and so as part of the development of the new Berlin Brandenburg Airport’s facilities, the airport “founded a pharma action group to implement new quality requirements into cargo handling in BER – such as fast lanes and a maximum 25°C in the warehouse”, says Torsten Jüling, cargo spokesman for Berlin Brandenburg Airport.
Further south, Leipzig-Halle Airport says pharma is considered “a strategic business segment” for the airport, and the region around the airport is proving popular for logistics players offering specialist life-science services. Kuehne and Nagel recently opened a 20,000 sqm pharma campus nearby, and DHL Global Forwarding is about to build a 5,000 sqm warehouse near the airport that will include cooling facilities designed to support its ‘thermo network’.
Bernhard Hoffmann, head of cargo business development, says airport handler PortGround is about to receive the Good Distribution Practice (GDP) certification needed in order to provide value-added pharma-handling services, and the airport is about to install temperature loggers within its warehouse. The airport’s ‘WorldCargoCenter’ (WCC) already has a small cooling facility (-2 to +8 degrees Celsius) and also uses two 40-foot cooling containers – currently for the storage of perishables.
“Inside the WCC, the temperature never exceeds 25 degrees and is never lower than 8 degrees – and we will prove that with the temperature loggers,” says Hoffmann. “Depending on the development of market demand, we could imagine investing in a pharma-handling facility, but we therefore need a client with a solid business case. We are currently discussing this subject with one of the major forwarders.” If this were to progress, pharma will “of course” have a separate place inside the WCC, he says.
Rene de Koning, chief commercial officer at forwarding and logistics group IJS Global, lists Schiphol, Luxembourg and Frankfurt airports among those investing in and “doing a good job in terms of healthcare logistics”, but in markets that are less well-developed, the facilities often have a lot of room for improvement. He says pharmaceutical shippers pay a lot more attention to the facilities at airports than the average customer, and this will very often determine which airlines and airports the cargo gets routed through.
“What we do for some of our customers is airport audits,” he says. “So, they have a new customer and a team of our people goes to an airport in Brazil or China or wherever to look at the cold-chain facilities and processes. These shippers won’t even begin shipping their products through an airport until it has been approved by one of these audits, because I have visited airports that claim to have top-notch cool-chain facilities, and when I got there, the outside temperature was 35°C and it was a closet with the door open and a pallet was hanging out.”