The strong growth in international pharmaceuticals markets is generating robust business activity for transport and logistics companies across the world. That impressive expansion is expected to continue in coming years, as a variety of factors drive transport and distribution of health and medical products.
The expansion in both usage and production of biotechnology-derived drugs and other cold-chain products in emerging markets and Asia has drawn increased regulatory interest in recent years.
It is estimated cold-chain logistics spending in 2014 will be about $8.4 billion worldwide, including $5.6 billion in transportation and $2.8 billion in specialized tertiary packaging and instrumentation.
Cold chain transportation, particularly of pharmaceutical products, is a growing business opportunity for air cargo. But this sector is facing increasing regulatory burdens, which are adding cost and complexity.
According to shippers and forwarders, reliability and environment - besides cost - are their leading concerns in weighting transport and logistics alternatives.
"With some studies indicating around 50% of those problems occur while the package is in the hands of airlines or in airports, you begin to see why air transport is losing pharma activity to other modes of transport”
Dedicated infrastructure for the transport and handling of pharmaceutical and biotech products require an unbroken cold chain. Today, the estimated annual losses of pharma products due to problems such as temperature excursions during transport and shipping phases run from $2.5 billion to $12.5 billion.
In order to slash that volume of product loss - and increase air transport’s stake in pharma activity - major efforts are afoot to standardize the handling of pharmaceutical products in air cargo environment.
"With some studies indicating around 50% of those problems occur while the package is in the hands of airlines or in airports, you begin to see why air transport is losing pharma activity to other modes of transport,” says Ronald Schaefer, Project Lead of the Center of Excellence (CEIV) of Pharmaceutical Logistics that the International Air Transport Association (IATA) has established.
Shippers want to see compliance, standardization, accountability and transparency across the supply chain. They want the confidence that facilities are adequately equipped and operated by properly trained people familiar with the latest regulations, standards and best practices. They want global certification, and a common audit format to maximize efficiency. Finally, they want to easily identify the stakeholders that meet all these requirements.
The CEIV Pharma offers all this and more.
CEIV Pharma Logistics’ mission is to create a harmonized and enhanced set of internationally recognized standards globally, encompassing differing regional, national regulations on handling and transporting pharma products, “We want to raise the bar to a higher level for shareholders in all logistics and transport activities around the world,” Schaefer explains.
At term, IATA’s intention is to offer a global system of training, knowledge and verification of compliance and a certification process for sector shareholders that will be clearly identified as CEIV approved.
The effort aims to provide transparency and visibility for pharmaceutical companies wanting assurance their products receive correct and timely treatment ensuring the integrity of the product is maintained from start to finish in the supply chain.
Given the high stakes in that freight forwarding activity, SDV decided to go beyond its current set of exacting standards to become the world’s logistics industry stakeholder with the most certified locations under the IATA’s CEIV Pharma certification program.
"Developing this recognized set of standards by training industry stakeholders, assessing operations against it by independent validators to ensure compliance and certifying the best players as IATA is doing with the CEIV Pharma program is key to us," says Brice Bellin, SDV's Regional Healthcare Director for Western and Central Europe.
“Managing and handling pharmaceutical products by an air freight forwarder today requires specific capabilities compared to products from other type of industries”
"It is an important first step into the right direction and could prove to be the recipe for success on qualifying trades lanes, covering all involved actors, from point A to point B."
SDV already guarantees clients complete control of all their pharmaceutical supply chain structures. It was also one of the first 11 companies participating in the BRUcargo pharma certification program in 2014. That experience made SDV joining IATA’s CEIV global initiative a logical step.
"All this clearly demonstrates that managing and handling pharmaceutical products by an air freight forwarder today requires specific capabilities compared to products from other type of industries,” says Bellin.
"The formal support from shippers as well as the feedback that we have received from the industry, including our own staff, about the assessment, validation and training courses has been very encouraging. A continuous improvement program is now in place."