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Global Air Cargo Trends Re-Shaping Pharmaceutical Transport

Pharmaceutical

Global Air Cargo Trends Re-Shaping Pharmaceutical Transport

As we welcome the new decade and the exciting advances it is expected to unleash, many of the forces that shaped the past decade for transporting pharmaceuticals will continue. Price pressures, alternatives to air freight and increasing automation are just a few. However, there are emerging trends that make 2020 unique.

As we look forward, these are the air cargo trends expected to shape the transport of pharmaceuticals in 2020 and beyond.

The Greta Thunberg Effect — Flying Shame

We can’t ignore the effect that climate change activist Greta Thunberg is having on air travel that runs on fossil fuels. Thunberg’s reliance on trains to travel from her home country of Sweden to other countries in Europe connected by rail has triggered a material effect on passenger numbers in Sweden. According to Bloomberg, Swedish air travel diminished in 2019 — while train travel jumped to a record level.1

What could this mean for shipping pharmaceuticals by air? As “extinction rebellion” shows no sign of slowing down, air freight carriers — like their passenger transporting counterparts — will feel more pressure to seek alternative fuel sources and replace older planes with more fuel-efficient models. To further address the Thunberg effect, carriers and their logistics partners will also need to elevate their brand image by demonstrating they are adopting eco-friendly practices such as reusable or waste-stream friendly shipping containers made from recyclable materials. Especially for shipping pharmaceuticals, these shipping containers must still maintain strict temperature control to ensure valuable payloads arrive intact.

Global Trade Pressures Drive Down Air Freight Demand

After years of wrangling over the details of Brexit, the UK is departing from the European Union (EU) — and entering a transition period through the end of 2020. The effects of Brexit and the fact that Germany only narrowly avoided an official recession at the end of the last decade have been driving down European air freight demand. Furthermore, US tariffs aimed at four counties in retaliation over subsidies to Airbus has hit Germany especially hard.

Meanwhile, the US-China trade war began to thaw with the signing of an initial trade deal. But trading data showed the climate would have to improve significantly to combat the year-on-year 8.1% decline in freight tonne kilometers experienced in 2019.2 Price is the crudest and quickest tool at air freight’s disposal to address diminishing demand. However, long-term price cutting is not sustainable and in the face of continued change, air freight companies will have no choice but to cut flights from their schedules and mothball aircraft — and cease to exercise purchasing options that did not factor in declining demand.

Diminished Air Freight Demand Means Reduced Capacity

Air freight remains the predominant mode of transportation for moving life-saving pharmaceuticals around the globe, especially for the most valuable and sensitive therapies that require strict temperature control. Sea transport, accounting for approximately 20% of pharmaceutical shipments3, made gains in recent years as an alternative transport mode for non-temperature sensitive products and the return of containers after payloads have reached their destination. However, for the foreseeable future, pharmaceutical companies will remain reliant on air freight for transportation of products that could succumb to temperature excursions.

Declining air freight and passenger demand combine to produce a double whammy for the pharmaceutical industry. As air freight capacity becomes an even more precious and dwindling resource, there are things that can be done to mitigate reduced capacity. For example, temperature-controlled packaging systems will need to step more into the foreground to reduce volumetric weight, providing higher performing insulation and phase change materials that can considerably improve volumetric efficiency.

However, packaging systems currently available to reduce volumetric weight are typically more expensive unless they are re-used, and re-use can’t always be achieved efficiently for both financial and environmental reasons. The pharmaceutical packaging industry will need to look more closely at the installed capabilities of aircraft to manage temperature, which could make lower-grade packaging materials more acceptable. The capabilities of the aircraft will also need to be matched to ground conditions and reliable sourcing can be difficult in less developed regions of the world.

 Pharmaceutical Packaging: No Longer Rickshaw Vs. Tank

When it comes to pharmaceutical packaging, one size does not fit all — nor should it. The days of choosing between a rickshaw or a tank are behind us. Pharmaceutical packaging manufacturers have broadened their product portfolios to enable the most efficient solutions to be selected, qualified and deployed on a lane-by-lane basis across truly global supply chains. Making the right selections and performing the necessary qualifications can be daunting compared to the old simplicity of “I’ll have a tank everywhere.” But this is the challenge we must face to deliver value and make responsible use of dwindling resources such as global air freight capacity.

The good news is that cold chain consultants have the tools and resources to streamline this new approach. Packaging products have been engineered and tested to incorporate operational consistency and simplicity that might otherwise make it too complex to deploy. Networks and services have also been developed and deployed to enable efficient and reliable outsourcing of operations.

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Dominic Hyde is the Vice President of Crēdo on Demand at Pelican BioThermal.

References:

1. As ‘Flying Shame’ Grips Sweden, SAS Ups Stakes in Climate Battle, Bloomberg, April 14, 2019.

2. Air Cargo Demand Continues Negative 2019 Trend, International Air Transport Association (IATA), May 29, 2019.

3. Will Ocean Freight Be the Dominant Mode of Transport for Pharma Payloads?, Pharma Logistics IQ, July 12, 2018

cold chain

Cold Chain Logistics Survey Reveals Biopharma Trends

Global temperature-controlled packaging provider Peli BioThermal shared three key insights revealed in the latest survey conducted on opinion leaders within the biopharmaceutical industry. The company’s 2019 Biopharma Cold Chain Logistics Survey took a granular look at current trends, technologies, and operations among cold chain industry players and exactly how much these trends are impacting the supply chain.

Among the most surprising trends uncovered in the survey confirmed cold-chain excursions are more common than one might assume. A total of 41 percent of survey respondents reported having multiple temperature-controlled excursions exceeding four degrees. More than half of respondents confirmed shipping internationally, adding pressure to the increasing demand for transportation optionality and flexibility within climactic zones.

Additionally, increasing quality demands made the list. As cold chain logistics increase among shippers, risk increases as well. With close to half (44.6 percent) of companies revealing multiple excursions per year, temperature and location tracking is high on the list of concerns to ensure high volumes are handled accurately.

Source: Peli BioThermal

“As strong growth continues across the global pharmaceutical industry, the sub-category of temperature-controlled products is surging ahead — growing at twice the rate of the industry overall,” said David Williams, President of Peli BioThermal. “Our survey reveals what matters most to key biopharma leaders — and what it means for the future — as the industry deals with the rapid growth and complexity of temperature-controlled logistics.” 

Source: Peli BioThermal

Among the most common modes of transportation include air and ground with the option for sea and rail due to experience an increase among shippers, according to the survey.

Reusable containers garnered 79 percent respondent approval, adding that although pricier they are worth the investment and worth it over single-use containers. A total of 37.6 percent confirmed the implementation of reusable containers, with 25 percent currently vetting options.

The final piece of the results came from nearly 70 percent of respondents focusing on total cost of ownership (TCO) optimization as important. This consideration would primarily offset market pressures such as competition  and margin, but proactive measures in defining TCO have not gathered momentum just yet. Only 10 percent of respondents confirmed exploring basic packaging costs and rates. 

To read the full 2019 Biopharma Cold Chain Logistics Survey report, visit www.pelicanbiothermal.com/survey.

Dublin Network Station Opened for Peli BioThermal

In an effort to support the company goal to exceed 100 network stations and drop points in 2019, Peli BioThermal announced the opening of its most recent network station strategically located next to the Dublin Airport in Ireland.

With a primary focus on the Crēdo on Demand rental program, the network station will act as a service center to refurbish, repair, condition, and service the reusable Crēdo shippers.

“Dublin is a key logistics location hub and Ireland’s life sciences sector and bio-pharmaceutical industry is increasing at a rapid rate,” said Dominic Hyde, vice president of Crēdo™ on Demand. “As we continue to expand our Crēdo on Demand rental program, the Dublin network station and service centre puts customers in closer proximity to more convenient and flexible shipping options.”

The Crēdo on Demand rental program enables organizations to select the best shipping applications and provides high performance, temperature-controlled containers including the Crēdo Cargo, Crēdo™ Xtreme and Crēdo™ Cube.

For more information on the company’s temperature-controlled solutions profile, visit: www.pelibiothermal.com

Middle East Facility Opens for Peli Biothermal

Global temperature controlled packaging company, Peli Biothermal, announced next steps in its global expansion efforts with the opening of the Jeddah, Saudi Arabia drop point. The announcement follows the companies goals of expanding its global footprint, primarily in the Middle Eastern region.
Additionally, the new drop point puts the company one step closer to meeting their goal to exceed 100 network stations and drop points for its rental program for 2019.
“Our Crēdoon Demand rental program is designed to provide our customers with options,” said Dominic Hyde, vice president of Crēdo on Demand. “Adding another drop point in key logistics hubs in the Middle East will allow our customers in pharmaceutical distribution the flexibility and convenience to choose the best drop-off location for their business needs.”
The new location benefits PeliBio Thermal’s Crēdo™ on Demand rental program by increasing available drop points, providing opportunities for growth in the region. The new facility will provide protection for globally transported payloads containing life sciences and pharmaceuticals.

Source: Peli Biothermal

Global Expansion Continues for Peli Biothermal

Temperature controlled packaging company Peli Biothermal announced the continuation of global expansion efforts under new leadership from  Dominic Hyde, VP of a high performance, cost effective temperature controlled shipper rental program, Crēdo™ on Demand.

“My first year with Peli BioThermal has been extremely positive with ongoing developments benefiting our global customers, who represent eight of the top 10 pharmaceutical manufacturers worldwide,” Hyde said. “In 2018, we increased our temperature controlled container fleet size by 90%, while increasing our revenue by 90% and we are well positioned to further accelerate our growth in 2019.”

Peli Biothermal will continue growing its global footprint in addition to convenience and flexibility options for customers in 2019, as seen in 2018 with the expertise and development oversights from Hyde.

Hyde commented:

“Our growing footprint of network stations and drop points are planned to exceed 100 sites by early 2019, representing a significant investment to support the continuing worldwide growth within the pharmaceutical and biomedical industry.

“We have been busy in 2018 signing multiple freight forwarders and integrators worldwide, increasing our convenience and flexibility for customers by selecting the best locations and organisations to speed the journey of their temperature controlled shipments around the globe.

“I look forward to the exciting developments planned for 2019 as Peli BioThermal continues to lead the market with its innovative technology and advanced passive systems.”

Source: Peli Biothermal