Virgin Atlantic Cargo seems well-positioned for growth in transatlantic pharma transportation along with partner Delta Cargo.

In October last year, Delta and Virgin Atlantic’s respective freight divisions announced the first joint venture cargo offering between the UK and the US. The two carriers now account for around 24 per cent of the total cargo capacity between the two countries, the world’s biggest trade lane for pharmaceutical products.

“Virgin Atlantic has carried pharma shipments for many years to and from the US and this is certainly our biggest pharma lane,” Dominic Kennedy, managing director of Virgin Atlantic Cargo tells Airline Cargo Management. He also reports growing volumes on other parts of the network too, such as China and India, which are also fast-growing pharma markets.

However, Kennedy points to the transatlantic market as the world’s biggest for two reasons: firstly, the largest pharma companies are either European or American organisations and, secondly, both markets have large, economically-strong consumer populations that value and can mostly afford good healthcare.

Virgin now covers 11 major destinations across North America and, alongside joint venture partner Delta Cargo, Kennedy feels the transatlantic cargo capacity is well-placed to meet growing demand from pharma shippers. And the capacity is not limited to London Heathrow (LHR), its main base in the UK. In September last year the airline unveiled its biggest ever season of flying from Manchester Airport for 2018.

Highlights include services to both New York JFK and Atlanta being upgraded to larger aircraft and an improved schedule. For the pharma sector however, the focus is firmly at Heathrow where Virgin and Delta opened a joint pharma zone facility in October. “Our pharma volumes rose 20 per cent year-on-year in 2017, and they were boosted further by the opening of our pharma zone at Heathrow in the fourth quarter.

We expect 2018 will be a record year for the pharma volumes we carry,” Kennedy anticipates. The new pharma zone at Heathrow will support the growing volumes of temperature-controlled healthcare and life science products being carried by both airlines and enhances their ability to meet the strict quality and service requirements of pharmaceutical companies and their freight forwarding partners.

The Pharma Zone at Heathrow

Operated by Good Distribution Practice (GDP) trained staff, Kennedy says the pharma zone is dedicated to handling and storing pharma shipments and incorporates walk-in pods for loose pharma shipments and six chambers for pallet storage that can accommodate 24 pallets in 2-8°C or 15-25°C temperature ranges. “It is a secure and segregated area which also incorporates a series of charging points for active cargo containers,” he says.

“Everything we do is driven by our customers,” Kennedy adds, meaning listening to their requirements and then looking to provide the best solution to meet their needs. “A lot of companies talk about pharma, but we wanted to deliver a tangible benefit for customers to further improve our existing product and service offering. Talking with our customers, it was also very clear that they wanted to give us a bigger share of their pharma and life science business.”

Although demand for pharma air cargo services is growing, Kennedy reminds that it remains a very competitive market. For instance, last June American Airlines Cargo opened a new Controlled Room Temperature (CRT) facility at its London Heathrow cargo centre. According to American, the new CRT can accommodate up to 16 times more standard Euro skid pallets at one time than the previous room, providing greater capacity when it comes to moving temperature-sensitive healthcare freight to and from LHR.

Clearly, the newly enlarged CRT room will be of significant value to shippers moving specialist pharma traffic between Europe and the United States. As the second largest carrier from LHR across the Atlantic, American operates around 20 daily departures to the US, including links between LHR and Philadelphia, home to American’s 25,000ft2 pharmaceutical facility.

“This is a tremendous service enhancement for our European customers,” said Andy Cornwell, regional sales manager for Northern Europe at American Airlines Cargo back in June. “This new, far larger facility can meet their needs even more effectively now and in the future.” Back at Virgin, Kennedy admits that competition in the market is good news for pharma companies and their freight forwarding and logistics partners because it means airlines must meet the highest standards and be responsive and innovative.

“Customers are extremely knowledgeable about the pharma products and services available in the„  market and make informed choices based on what they see rather than what they hear,” Kennedy reveals. True to their word, Kennedy reports that Virgin Cargo’s pharma customers have responded very positively to the opening of the new pharma zone at LHR. “In its first month of operation alone, we took an additional 350 plus bookings for pharma shipments,” he says.

IATA declares challenges and opportunities

The International Air Transport Association (IATA) has previously declared that transporting and handling pharmaceuticals presents both challenges and opportunities. “IATA is absolutely right,” Kennedy agrees. He says for airlines that understand the specific requirements of pharma customers and can meet the strict standards for temperature-controlled pharma transportation, there is the opportunity to offer a premium product to customers in one of the fastest-growing air cargo markets.

“This is a product that truly benefits from, and needs, the speed, predictability, visibility and security that air cargo provides. Ultimately, customers have more choice and are making informed decisions about who they want to work with.” Kennedy continues to say the challenge for every company involved in the pharma supply chain is to comply with the strict regulatory environment, “because we all have a big responsibility to ensure the integrity of pharma products when they reach the patient.”

Pharmaceutical companies have a legal obligation to ensure the quality and safety of their products, so they can only develop relationships with suppliers, including airlines, that provide that level of assurance, he explains. Kennedy speaks of another initiative at Virgin Atlantic that supports this which is the introduction of a new pharma booking form which ensures all parties are clear about each other’s responsibilities, expectations and needs, and he says this has been well received by the its customers.

“We are extremely positive about our growth potential in this market because of the combination of the specialist pharma facilities, services and certifications we will be able to offer, our network covering the world’s biggest pharma markets, and the frequencies we provide on these routes.” Speaking of certifications and accreditations, working alongside aviation industry stakeholders and regulators, IATA created the Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma), to help organisations and the entire air cargo supply chain to get on the right track to achieve pharmaceutical handling excellence.

Delta Cargo offers CEIV approved facilities

Delta Cargo for example is now offering CEIV approved facilities at seven locations across Europe, with the recent addition of Düsseldorf Airport to the network. These facilities are operated in conjunction with ground handling partners and joint venture partners. Shawn Cole, Delta’s vice president – Cargo, said Delta has made significant investments in pharma facilities across its global network, to ensure compliance with the highest industry standards.

“Our priority boarding and quick connection times minimise exposure to outside temperatures ensuring the integrity of the product – vital for transporting medicine to patients.” Interestingly, Delta’s partner Virgin Atlantic is not considering CEIV accreditation but instead, as Kennedy explains, the British airline is working towards achieving Wholesale Distribution Authorisation (WDA) accreditation in spring 2018.

WDA has been developed by the UK’s Medicines and Healthcare products Regulatory Agency (MHRA). “This is the certification our customers want us to achieve and it will confirm Virgin’s GDP compliance.” He reports the first step in this process has now been completed with dnata, Virgin’s handling agent at Heathrow, having successfully achieved its WDA certification, which has allowed the airline to now commence its own certification.

At the same time, joint venture partner Delta Cargo, continues to make significant progress with its IATA CEIV Pharma certification programme.

“We see this as a win-win for our pharma customers because they can be assured of the highest levels of compliance in both the UK and US markets. Delta commenced its CEIV programme by gaining certification in Atlanta and for its global headquarters and is now planning to do the same at other key hubs,” says Kennedy.

He also points to the advantage of having a co-location of Virgin and Delta’s cargo handling operations at major airports to support a seamless customer experience. “We still have a lot to do but the Cargo teams of both airlines are fully committed to realising the potential of our partnership.”

In the future, Kennedy expects freight customers to see a dynamic Virgin and Delta partnership that is based on neutral metal, co-located facilities, aligned products and processes, seamless bookings, and collaborative service recovery.

“We are building an industry-leading partnership which designs services around our customers, and which isn’t afraid to try the unthinkable. It’s all about giving customers the best possible choice of services, underpinned by safety and security,” he states. Looking ahead, Kennedy says Virgin Atlantic is not in a rush to court additional cargo partners in its relationship with Delta.

“We believe we have a robust pharma service offering and, as with all areas of our business, we will continue to work closely with our customers to ensure we are providing the solutions they need. We are constantly looking for ways to improve our products and services.” As things stand, the future looks bright for the business, or rather cooler, with Virgin becoming the first UK airline to approve carriage of the new CSafe RAP container for pharma shipments, which further extends the leasing options available for temperature- controlled pharma shipments.

Also, the airline has now conducted full GDP audits in both Miami and Los Angeles with further audits planned in Boston and San Francisco this year. “The thing to remember in terms of pharma transportation is that there is no end game,” Kennedy reminds. He says it is about continuous improvement and demonstrating the ability to meet the required quality standards for every single shipment. “This is what we are committed to doing.”