AIR FREIGHT PHARMA CERTIFICATION LAUNCHED

The shipment of perishables and cold chain products is huge business. In fact, the global pharmaceutical industry, alone, is valued at US$300 billion a year by the World Health Organization. The logistics industry that surrounds it is valued at more than US$64 billion, much of which is spent on shipments sent via providers of air freight and 1-3 day parcel (mail, express and courier) services. 

The biggest drivers of cold-chain logistics over the next few years will be the continued development, approval and market penetration of biotechnology-derived drugs, and the expansion in both usage and production of these drugs and other cold-chain products in emerging markets. According to Pharmaceutical Commerce magazine, sales of insulin, the top cold-chain drug, are growing 6-7% per year globally, and more than 20% per year in emerging markets such as China, which as of 2013 had about one-quarter of the world’s diabetic population but used only 6% of the world’s insulin.

“By 2018, spending on cold chain logistics is likely to be over US$10 billion a year,” reported Tony Tyler, International Air Transit Association (IATA) chief executive officer and director general.

Not surprising, during the economic downturn the brightest spot in the otherwise downtrodden air cargo industry was pharmaceuticals and perishables. The business is fiercely competitive.

DHL Global Forwarding, a leading provider of air, sea and road freight services in Europe and Asia, just invested Rmb115 million (US$18.6 million) to expand its Shanghai air freight facility. The investment includes a new warehouse and 1,600-square metre cold storage facilities for life sciences and healthcare customers. 

DHL is the only international freight forwarder in Shanghai’s No. 1 Customs Supervised Bonding Zone that provides temperature controlled storage in its own facility. According to Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, the aim of the project is to create a super facility in Shanghai that’s a one-stop shop for all of DHL’s air freight customers.

In 2013, German logistics provider DB Schenker established a 6,100-square metre logistics centre in Gunpo near Seoul to handle healthcare and pharma products that require cold storage. It includes specialized vaults for sensitive medical products.

While most air carriers and their subsequent ground partners are adept, for the most part, at handling cold chain products, there are issues. Probably the biggest is the lack of information available to shippers and forwarders on the facilities available from end-to-end to ensure that the integrity and quality of the product is maintained throughout the supply chain.

“Frequently, appropriate infrastructure and robust handling processes are inadequate and a lack of standardization is holding the industry back,” says Andrea Gruber, senior manager for special cargo at IATA. For that reason, IATA contends that a recognized global certification would serve as a guarantee that an organization has the equipment and personnel to handle sensitive goods swiftly and reliably.

A number of technology innovations have been developed to monitor the health of shipments while in transit. “Typically these either have a transmitting capability to monitor shipments in real time, or are passive (i.e. non-transmitting),” Gruber said.

But the handling of temperature controlled pharmaceutical products is particularly complex due to the lack of standardization, compliance and accountability. Add to this the fact the global pharmaceutical industry is also the most regulated, expensive and fragile cargo business in the world today.

“Yet there are no global standards and certification for the handling of pharmaceutical products,” Gruber said.

Plus, freight forwarders and handlers have to cope with multiple audits imposed by pharmaceutical companies and regulators, such as the European Union (EU) Good Distribution Practices, established in 2013, which added cold chain rules regarding handling.

In the last few years, Australia, Canada, China, Indonesia, Ireland, Malaysia, Saudi Arabia and the United States also have all updated cold chain rules.

“These new regulations and requirements, together with the implementation of more complex processes and technology, are forcing the industry to confront multiple changes,” Gruber said. “Providing adequate training to employees is essential to adapt to the transformation and guarantee that pharma products are transported appropriately, rapidly, and in compliance with international regulations.” 

Consequently, IATA has developed the Center of Excellence for Independent Validators (CEIV) on Pharmaceutical Handling that provides global certification for compliance with the standards and regulations, and gives shippers more confidence in the ability of the end-to-end cargo chain to handle pharmaceutical goods.

In August, Brussels Airport became the first European hub for pharmaceutical freight to implement IATA’s CEIV program. The airport invited 10 local stakeholders (ground handlers, freight forwarders, truckers and airlines) to undergo the CEIV Pharma training with the goal of becoming certified.

Since then, global supply chain services and solutions company UTi Worldwide has achieved the CEIV Pharma certification, as did Jan de Rijk Logistics. Finnair Cargo is also taking part in the program and expects to be certified this year.

“When combined with the facilities matrix IATA is developing to catalog and benchmark cold-chain infrastructure, it will give shippers transparency so they can be sure the integrity of their products will be maintained,” Gruber said.

IATA expects that in the future, shippers will require some kind of guarantee for the integrity of their goods. “Conceivably, CEIV Pharma registration could give that reassurance to shippers,” Gruber added.

The CEIV certification is particularly important to the air freight industry since the industry is a vital link in the supply chain for time-and-temperature sensitive goods.

Airlines have much to gain by capturing a share of this market. But at the same time, there is a growing body of international requirements and regulations with which the air cargo chain must be compliant.

“Certification will help to ensure this,” Gruber says. “In addition the CEIV can serve to drive up quality standards and leverage the capacity and capabilities of the industry to handle increasing volumes of these sensitive goods.”

 

By Karen E Thuermer

Correspondent | Washington