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Saving Money on Cold Chain Transport

Saving Money on Cold Chain Transport

Pharmaceutical and biotechnology manufacturers can save money on cold chain transport through reusable solutions and closed-loop or reverse logistics programs. 

The current economic challenges have caused dramatic budget impacts, and nearly every industry and organization has felt the pressure of the current crisis. As operating costs continue to rise, budgets continue to shrink. Whether it is in highly critical research and development or in ongoing marketing and delivery, the impact has been felt and the future looks to be quite austere. 

On the operational side, the impact for cold chain management and transportation is not any different-regulatory agencies have raised the bar while management has reduced the budget. The challenge is to find ways to deliver superior performance while reducing overhead and operating costs. This is no small task for the operational and logistical organizations tasked with delivery of critical temperature-sensitive pharmaceutical and medical materials. 

Critical temperature-sensitive materials must be protected during transport; however, for a host of reasons, the cost of doing so has never been higher. Soaring and inconsistent fuel costs have driven transportation fees to record highs, the “white glove” services have raised rates to the point where they are pricing themselves out of existence, and refrigeration trucks, while extremely reliable, are equally expensive and may not handle tight delivery constraints. As a result, proactive organizations are looking for innovative ways to reduce the costs of thermally controlled shipping without increasing potential excursions or raising failure rates. By rethinking the process and embracing several key strategies that increase cold chain efficiency, bottom-line value can be found and realized. Progressive companies are taking these steps and have seen dramatic benefits as a result of making strategic changes. 

New technologies; new solutions

Evolving technology now offers manufacturers new and improved solutions to existing cold chain challenges such as extended duration and protection in extreme temperatures. Historically, maintaining temperature was accomplished with ice and Styrofoam containers-to keep an item cold in extremely hot environments, you simply put more ice on it. Improved solutions have utilized gel packs, dry ice and mechanical refrigeration systems, which meant that materials could be kept a little colder for a bit longer. In addition, it meant finding a local provider that could deliver requirements and intervene when re-icing was needed. 

Yet all of these “improvements” serve to drive up the cost and complexity level while only marginally improving performance. Hazardous materials, one-time-use containers, complicated regulations and expensive powered options all have an obvious negative impact on tighter budgets. What about temperature-sensitive shipments that are delivered to extremely cold environments? How will more ice address this challenge? To be truly viable, a cold chain shipping solution must minimally address several crucial requirements, including minimized complexity, complete reusability and unparalleled reliability. 

The new generation of reusable temperature-controlled shipping containers delivers enhanced performance by incorporating superior component parts in a comprehensive solution. The use of sophisticated phase-change materials allows for tighter, more consistent temperature control, as well as for more customization for client requirements. In fact, maintaining previously unimagined temperature ranges are now routinely accomplished. Durations that would not have been considered without significant intervention and sophisticated planning are now commonplace. Advanced insulation technologies are increasing overall performance and can reduce weight while also minimizing the overall footprint of your shipper. 

Maximize efficiency

Another key to improving cost-savings on shipping is to make sure that your cold chain shipper allows you to maximize efficiency. Containers should fit what they carry to cut down on shipping rates, but also maximize the payload area to ensure that space is not wasted. Moving to a reusable shipper that uses phase-change material allows you to maximize the entire area for payload-no space is needed for wet or dry ice, or any other additional heating or cooling agents. 

One pharmaceutical company found that by switching to a reusable shipper, they gained nearly 25 percent more payload capacity while reducing the overall weight of the shipment. As a result of this change, the pack-out time was reduced by 10 minutes, which allowed them to get more for much less. Simplicity of use and increased payload mean that more is packed and shipped in a smaller overall footprint, which ultimately results in immediate cost-savings with improved performance. 

Shipping smarter and saving more

Shipping systems that utilize refrigerated transport or expedited delivery seem to offer a degree of quality and the appearance of compliance, yet only serve to drive up overall costs. Conventional systems, while less expensive initially, have limitations based on the validation or qualification testing that has been done and are typically sent overnight to reduce the potential for failure. 

When shipments can be sent standard or second day, as is the case with a reusable shipper, they offer significant savings for several key reasons. First, ground transportation is less costly and does not require special planning or coordination. Regardless of the upfront cost, thermal containers with even slightly different time limitations will make a large difference when calculating freight charges. For example, a FedEx shipment weighing 50 pounds and traveling from Minneapolis to New York City costs $196 for overnight, but only $84 for second-day. Transporting it this way results in a savings of more than 50 percent every time; however, the final cost is dependent on the type of solution that was selected when the original shipping system decision was made. How much are you willing to pay to protect your payload and eliminate excursions? Was your selection driven by initial cost at the expense of overall performance? Did a few pennies saved result in significant expense down the road? It is important to measure the overall return on your investment from all aspects of the process. 

Another significant, yet frequently overlooked benefit of being able to ship with longer, standard timeframes is the ability to ship every day of the week. Thermal shippers that only protect products for a day or two require that all deliveries must be sent before the weekend (Friday is a lost day in terms of productivity). By implementing a passive thermal container that will maintain temperature for up to seven days, it is possible to ship at any time on any type of transport lane without worrying that the product will arrive safely within its temperature parameters. Furthermore, by using a reusable container, additional shipping fees for hazardous material and oversize containers can be eliminated. 

Keeping the environment in mind

It is no coincidence that what is good for the environment will end up being good for the bottom line. Any shipping method that requires an external power source or materials like Styrofoam and dry ice not only takes a toll on the planet, but also means that you will pay for those same materials repeatedly and be charged for its disposal (or incur service fees every time you ship). 

Additionally, a key part of your environmental planning must be to establish a well thought out closed-loop or reverse-logistics program that will also help save money by avoiding lost materials and wasted labor. Containers can be used multiple times, minimizing waste and recycling fees. At the very least, a reverse-logistics program can help you track and trace your shipments, automate repeat shipments, and provide a variety of reports that you can use to assess and ensure an efficient shipping process. Also consider the use of reusable temperature monitoring devices-be proactive by monitoring your payload throughout transit and prevent potential problems before they occur. With today’s technology, you are able to monitor and act on every shipment from start to finish. Reusability will ultimately eliminate potential excursions and result in a better return on investment. 

Consider the big picture

Reducing costs and stretching your budget dollars requires a careful look at the dynamics and requirements of your specific situation. Consider the entire cold chain shipping process from start to finish when analyzing overall savings. Many organizations go wrong because they merely analyze individual components of its shipping system-for example, they look at container cost or freight charges without considering the entire process. Labor costs, recycling fees and container weight all contribute to the total real costs for temperature-sensitive shipments. When comparing thermal solutions, it is imperative that you analyze and account for all dollars, resources and personnel that go into the potential options. 

Because one element of your decision can easily affect other facets of the total package, there are several essential cost-saving strategies to be aware of when comparing options. Selecting a container has cost ramifications that reach far beyond the initial unit price. Each container is different and will produce varying performance results. Frequently overlooked is the “hidden” cost of labor; a container requiring a simple pack out that reduces labor and improves efficiency can save more than $10 per use. Therefore, the simplicity and ease of pack out should also be considered when choosing your shipping container. 

Protecting your payload

Finally, selecting a thermal shipping solution with a proven track record of uncompromising performance will not only keep clients satisfied, but also will literally save thousands of dollars every year. The most important consideration should still be to ensure that your high-value, temperature-sensitive materials remain intact throughout shipment. Compromised biologics or pharmaceuticals can represent huge financial and potentially life-threatening losses. For this reason, passive thermal containers should employ tightly sealed vacuum insulation panels and carefully formulated phase-change materials that completely encapsulate critical contents on every side, so that all thermal energy entering the container is absorbed before it has a chance to impact your payload. Reducing temperature excursions by as little as 0.5 percent can have a dramatic effective on immediate cost savings. It goes without saying that protecting high-value, critical payload is the number one concern in transport; however, transporting it cost-effectively and in an environmentally friendly manner has also become top of mind, and are significant considerations in the decision-making process. 

The authors are with Minnesota Thermal Science, which provides innovative, scientific solutions for the safe transportation of sensitive tissue, pharmaceutical, blood and biologic products.