Need for Speed
Stan Wraight, Senior Executive Director of Strategic Aviation Solutions International and Jan Krems, President of United Cargo, argue that airfreight is the only choice, if speed is your priority.
What are the main advantages when transporting products by air?
Stan Wraight: First, speed and security: goods that are worth thousands, sometimes millions, in a single shipment benefit from lower insurances fees, lighter packing, faster payment for goods and so on. Second, lower inventory carrying costs and reduced investment in distribution centers overseas to store inventory. Third, e-commerce service providers are setting new standards in delivery expectations by B2B and B2C clients – and these cannot be met by slower sea freight.
Jan Krems: The central difference between sea and airfreight is that sea is simply a no-go for certain products – it just isn’t fast enough. An excellent example of this is the recent increase in the use of personalized or precision medicine, with products tailored to an individual patient based on a number of distinct variables. Globally, our TempControl experts are reporting a rapid rise in the need for quick and immediate transport of these time-sensitive and patient-specific solutions.
Are there many disadvantages compared with shipping by sea?
SW: The major one, of course, is cost – and every shipper or consignee should be doing a “test of time” to see if sea freight really generates the cost saving they think it does – all the benefits above should be compared. Safety and security is another issue; it is no secret that theft is a huge issue and increasingly high-value goods, including pharmaceuticals, are targeted. Airfreight is no exception, so companies must ensure that the airline they’ve chosen meets the standards set by institutes like TAPA (Transport Asset Protection Association) in all facilities.
JK: There are some “advantages” to the sea mode versus the air mode: the rate per kilo is less, and the capacity of an ocean vessel is much greater than an aircraft. Also, there are some classes of dangerous goods than can’t be transported by air.
Is there a move to transport more products by sea?
SW: Some companies were moving to sea, mostly due to incompetence in the logistics chain. This has been largely overcome, but I also hear about insurance liability issues with some sea shipping lines refusing to take more than a certain maximum per vessel, resulting in restrictions that has made air even more attractive going forward. That said, generic/non-time sensitive pharma will move to sea unless the cost/value equation says otherwise.
JK: We see the continuation of the existing trend, where the percentage of goods shipped by sea is much higher by volume, but a much higher percentage of goods by value is shipped by air. The latest figures I remember from Seabury Consulting were an 87:13 split in volumes in favor of sea, but a 79:21 split in value favoring air. Lower-value pharma with more stock, and commoditized medicine with a longer shelf-life, are likely to go by sea. Higher-value drugs and/or active pharma ingredients are much more likely to be transported via air.
How common are temperature excursions during air shipping? And where are problems most likely to occur?
SW: Major incidents in the past have been mostly ramp related, during the offload or on-load process where care and procedures were not in place. Such problems usually stem from people looking for the lowest cost solutions, and not taking into account the fact that proper procedures cost money. There are solutions for air cargo containers that are uniquely designed to accommodate highly sensitive materials, such
as pharmaceuticals.
The technology used to prevent temperature excursions is extremely effective; the only hindrance is that everything on board requires either EASA or FAA certification, so it can be time consuming to introduce new technology. But systems do exist for both passive and active monitoring.
Any advice for the pharma industry?
SW: Talk to your airline! Talk to your airlines ground handling agent at entry, transit and arrival ports to ensure that your key performance indicators are known, and processes and procedures are in place; and make sure any forwarder (or other third party involved) is aware and complies with your service requirements. Furthermore, choose an airline that has invested in handling procedures that trace, track and constantly monitor the shipment. Choose the airline that has every element in the supply chain: cargo warehousing quality control at origin and destination, handling on the ramp in a secure and temperature controlled way, and IT that gives you status updates in all stages – including temperature. The pharma industry can help a lot by encouraging their logistics service providers to support initiatives by airports and airlines to raise the quality bar, and insisting on carriers that support these initiatives. Good examples include Mumbai and Schiphol Amsterdam, which are creating a data corridor that allows for the complete monitoring of all temperature data from port to port, and carriers like Emirates, which is creating GDP-compliant facilities.
JK: The pharma industry needs to enhance communication between all participants in the supply chain. Manufacturers, forwarders and carriers all employ dedicated and creative people who can develop solutions to problems, but they need to know what their partners are capable of doing and what each party needs from each other. At United Cargo, while we’re not turning away transactional business for TempControl, we feel strongly that long-term partnerships based on trust, a willingness to listen and a genuine interest in contributing to your partner’s success is the key to moving the industry forward.
