Air Cargo Management

Pharmaceutical transport: Reshaping the future

Pharmaceuticals transport: Credo's Dominic Hyde

As we settle into the new decade and the exciting advances it is expected to unleash, many of the forces for transporting pharmaceuticals that shaped the past ten years will continue.

Price pressures, alternatives to air freight and increasing automation are just a few. However, there are emerging trends that make 2020 unique.

Dominic Hyde, vice-president of Crēdo on Demand at Peli BioThermal, outlines the air cargo trends expected to shape the transport of pharmaceuticals over the course of the coming decade.

The Greta Thunberg effect

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.

What could this mean for shipping pharmaceuticals by air? With the Extinction Rebellion movement showing no sign of slowing down, air freight carriers — like their passenger transport 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 when it comes to shipping pharmaceuticals, these containers must still adhere to strict temperature controls to ensure valuable payloads arrive intact.

Transporting pharmaceuticals: Credo

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 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 countries in retaliation over subsidies to Airbus have hit Germany especially hard.

Meanwhile, the US-China trade war has begun to thaw with the signing of an initial trade deal. However, trading data shows the climate would have to improve significantly to combat the year-on-year 8.1 per cent decline in freight tonne kilometers experienced in 2019.

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 per cent of pharmaceutical shipments, has 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 in 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.

Transporting pharmaceuticals: Credo

 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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