'cool supply chain the ultimate aim'

Perishables, Pharmaceuticals Warm Up Air Cargo Growth

Perishables, Pharmaceuticals Warm Up Air Cargo Growth

After a fast start to 2015, global air cargo volumes grew just 1.8 percent year-over-year in May, according to market research firm WorldACD, but don’t blame perishables and pharmaceuticals. The two temperature-controlled segments — among the most lucrative because of the time-sensitive nature of their delivery — were the best-performing cargo classes during the month, and are at the forefront of air carrier plans to bolster revenue.

One of those carriers is American Airlines, which opened a $5 million, 25,000-square-foot temperature-controlled facility at Philadelphia International Airport in June. The facility is strategically located near pharmaceutical manufacturers along the U.S. East Coast, which are expanding shipments to emerging markets in South America and other global regions. The facility can maintain temperatures for medicines and medical devices of 2 to 8 degrees Celsius and boasts a 6,000-square-foot Control Room Temperature to keep passive shipments at plus-15 degrees C and plus-25 degrees C; a deep frozen area (FRO) for shipments between minus-10 degrees C and minus-20 degrees C; and advanced technology for 24/7 monitoring of products, including proactive alarming, validated to 0.25 degrees C.

The facility is the first of its kind for a commercial air cargo company and is purpose-built for the specific requirements of pharmaceutical shippers, said Thomas Grubb, manager of cold chain cargo for American Airlines. “You have increased demand to obtain such medications and increasing the complexity of the products themselves,” he explained. “Pharmaceutical companies are developing more complex ‘biological’-based medicines — as opposed to chemical-based medicines — including hormone treatments, vaccines and complex proteins, that require refrigeration to work properly,” the company added in a statement.

American Airlines’ investment in new aircraft and four additional international routes also supports growth in perishables and pharmaceuticals. In June, AA Cargo launched separate services from Dallas-Fort Worth to Beijing and Buenos Aires. It added a DFW-Shanghai route shortly after, and will add a service between Chicago and Narita, Japan, this month. All of the services employ the new, fuel-efficient 787-800 that can carry 1,000 pounds of dry ice, a necessary component for high-value shipments of perishables and pharmaceuticals.

EVA Cargo, meanwhile, launched its EVA Pharmacare service in the spring, collaborating with Envirotainer to provide active temperature-controlled containers for air cargo on a rent-it-when-you-need-it basis. High-value goods such as biological, pharmaceuticals, vaccines, high-end foods and semiconductor components are the targeted cargoes.

UPS also expanded its services to better accommodate perishable and pharmaceutical shipments with the May opening of a facility dedicated to health care and life sciences at Schiphol Airport in Amsterdam.

“With the rise of biologics and temperature-sensitive products as well as changing regulations governing the transportation of pharmaceuticals across different geographies, companies need increased control and protection of their products during transit,” said John Menna, UPS’s vice president of global strategy, health care logistics. “The new life sciences center at Amsterdam Airport Schiphol allows us to process shipments under strict temperature conditions according to the expectations set out” in the European Union’s Good Distribution Practice guidelines.

DHL emphasizes the need for improved cold chain capabilities to support the evolving pharmaceutical industry in a new white paper entitled “The Smarter Cold Chain: Four Essentials Every Company Should Adopt.” Pharmaceutical manufacturers are rethinking their temperature-controlled supply chains, according to Lisa Harrington, president of lharrington group and author of the paper. “Leading companies, and their logistics service providers, understand that the traditional cold chain is outdated. The time has come for a smarter life sciences supply chain — one that incorporates specialist-level knowledge, robust standard operating procedures, regulatory compliance expertise, end-to-end control, global experience and dedicated IT systems to deliver cost-effective, compliant solutions.”

Two trends are redefining the pharmaceutical industry, she said. The first is the dramatic rise in spending on biologics and specialty drugs. These drugs require handling with specific condition tolerances that, if compromised, can impact the efficacy of the drug, in turn putting patients at risk and resulting in the loss of a shipment. Biotechnology medicines are high value, and it’s not unusual to have a single consignment valued at $50 million or more. Furthermore, they often travel long distances, such as to emerging markets, and encounter multiple climactic zones and numerous handoffs en route.

Second, the pharmaceutical industry, like many others, is feeling the impact of proliferating regulations around compliance, she added. “Specifically, regulatory compliance requirements and enforcement are getting stricter,” Harrington said. “Pressure is increasing to ensure ‘ship-to-label’ regulations are met. Authorities require proof that products have not only been stored at the temperature stated on the label, but also kept within an approved temperature range during transportation.”

The European Commission’s 2013 revised guidelines establishing good distribution practices requirements for pharmaceutical products is an example, Harrington said. “In addition to extending enforcement to include transportation as well as storage, the European Union GDP rules expanded regulatory oversight to medicines not previously covered by temperature-control regulations, i.e., controlled room temperature  products.”

Meanwhile, she said, the European Union’s GDP rules “are fast becoming the de facto standard around the world, with countries and regulatory bodies adopting variations of the requirements.”