This past May, logistics IT provider Unisys unveiled tracking software for pharmaceutical shipments that combines security, data analytics and compliance technology in a single platform. According to Unisys, this gives life sciences and healthcare firms enhanced visibility of the full global supply chain to help counter theft and counterfeit drugs.
In addition to tracking capability and security features to shield data from external access, the software supports monitoring of ambient conditions–not only temperature but also other environmental factors such as humidity.
Two developments are driving the need for better control of ambient conditions. The rise of personalized medication is raising the bar for logistics providers, given higher value of individual shipments and a greater need for accountability, notes Paul Martins, CEO of MNX Global Logistics, which moves primarily time-critical shipments for the medical sector.
The second factor is the push to serialization, which mandates visibility by serial number to combat counterfeiting. Most major markets–including the United States, the European Union, Brazil and China–have embraced this initiative.
Providers of monitoring technology have responded with a plethora of devices. Almost every day a new tracking app is launched, says one airline manager. For logistics companies, it has become important to ensure their IT platforms can handle a broad array of such apps.
“We at DHL Global Forwarding call ourselves technology agnostic,” remarks Frank Cascante, regional head of Development, Temperature Management Solutions and Cold Chain Engineering. “We have SLAs [service level agreements] with over 12 companies that provide these devices.”
Air carriers such as United and American offer a range of services, from passive solutions using thermal blankets to offerings that utilize temperature-controlled containers in combination with top boarding priority and tailored handling processes. They have also invested in staff training and recruited industry experts, not only to devise their products but also to communicate with shippers.
“We promote a trilateral approach,” explains Tom Grubb, manager, Specialty Products, Cargo Strategy at American Airlines. “We should work with each other to develop solutions.”
In many industries, the communication for shippers is almost exclusively with the forwarders, which deal with carriers in turn, but the healthcare segment is moving toward a huddle of the three to hone end-to-end solutions.
“We’re closer than ever to shippers, in partnership with forwarders,” says Manu Jacobs, global head of Pharma Sales at United Airlines. Tripartite discussions have always taken place, but they have recently advanced to another level, he reports.
Every step in the process is written down in Standard Operating Procedures to ensure transparency between the parties involved, Jacobs adds.
While this provides a solid basis for the partners to work with, Jacobs and Grubb see a need for a universal standard for moving pharmaceuticals and healthcare products by air, ideally on a global basis.
The most promising candidate for this would be the Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV), a scheme to audit and certify air cargo providers that has been developed by the International Air Transport Association, a global interest group that represents the vast majority of international airlines. American is in the process of obtaining accreditation for its Dallas/Fort Worth and Miami stations, while United is currently evaluating whether to embrace this for a couple of its U.S. hubs, according to Jacobs.
“CEIV is making great strides,” comments Grubb. “It is very well received.”
For airlines, it makes sense to ensure that their major hubs are set up to a high standard of compliance first. The next logical step is to extend the concept to the other end of a major route to establish a solid airport-to-airport solution. Swiss World Cargo, a pioneer in pharmaceuticals transportation, led the way there with the establishment of “pharma corridors.” The first, linking Basel, Switzerland, with Singapore, was set up in 2016. By the end of this year, the Swiss carrier intends to have 100 lanes in place.
Airports are pushing in the same direction. Brussels Airport, which provided the foundation for IATA’s CEIV program, joined hands with Miami International Airport last year to establish a global organization for airports and other stakeholders that have embraced CEIV. This group, which has since swelled to 10 members, aims to share best practices and jointly develop standards. The ultimate objective is “to realize, together with the pharma manufacturers, lane certification for pharma transportation by air, increasing quality and transparency.”
Freighter airline Amerijet, the first U.S. air carrier to obtain CEIV accreditation, plans to mount twice-weekly flights between the two founder airports in the second quarter of next year, which will be its first foray into the transatlantic arena.
“The fact Amerijet as a CEIV airline will link both our hubs with a full cargo aircraft is a next step in offering customers an end-to-end solution for pharmaceuticals,” says Steven Polmans, head of Cargo and Logistics at Brussels Airport.
The cargo divisions of Delta and Virgin Atlantic airlines opened a new Pharma Zone at their joint facility at London Heathrow Airport on Oct. 2, billing it as the first UK-U.S. joint venture cargo offering in the world’s biggest trade lane for pharmaceutical products.
“This dedicated Pharma facility at London Heathrow is an important addition to our global pharma network and, most importantly, provides our customers and pharmaceutical manufacturers access to another major international gateway,” says Shawn Cole, Delta Cargo’s vice president. “Delta Cargo has successfully achieved CEIV certification in Atlanta and for Delta’s headquarters. Over the next year we aim to add our other key hubs to the network, starting with New York-JFK and Los Angeles. This network, combined with the promise of speed, consistency and efficiency in delivering high-value, time-sensitive, temperature-controlled products right across the network really is a first for the Delta Cargo and Virgin Atlantic Cargo joint venture.”
Airports and airlines have compelling reasons to raise their game for healthcare traffic. Not only has this segment shown strong growth–coupled with good margins thanks to the need for temperature control and other value-added elements–but there is also concern that shippers may shift more of their traffic to ocean carriers. Already some pharmaceutical cargo has been switched over to waterborne transportation.
“Because of the lower cost, we have seen a migration of some of these volumes to other modes,” confirms Grubb.
Some logistics providers see an opportunity there. Last year, DHL Global Forwarding adapted its ThermoNet product originally designed for air transport of pharmaceuticals to ocean transport. The revamped offering allows round-the-clock monitoring and intervention based on the company’s SmartSensor technology, with data being transferred in real time via the GSM network.
“This has been a huge breakthrough for our customers,” says Cascante. “Most of the large companies try to transfer cargo from air to ocean where they can.”
For air carriers, another question is the rise of online orders of medication and what Amazon is going to do in this sector. Its orders for 40 Boeing 767 freighter aircraft at the end of last year caused a stir, although Amazon management has denied any intention of targeting the logistics sector, arguing that it simply needs those planes to supplement insufficient commercial lift. Should it decide to order small freighters for regional sectors, alarm bells would ring at commercial air carriers.
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Deconstruction of the Value Chain