hard pill to swallow

Shippers of pharmaceuticals and health care products have more options to send their traffic by air than before. Special offerings from airlines multiplied last year, partly as a result of the economic downturn. As their volumes shrank dramatically, a number of airlines developed new or improved temperature-controlled services in an effort to shore up yields.

At the same time, however, the bar for moving this traffic is getting higher, which requires measures that go beyond slick services. Regulatory pressures are mounting, and tougher security regulations have cast ominous question marks over transit times.

Carey Roach, national business development manager of pharmaceutical and healthcare at logistics provider Kuehne + Nagel, points to new regulations from Health Canada and from the US authorities, which put the onus on shippers to show that the required ambient temperature range for their traffic has been maintained throughout the supply chain.

Increasingly, this leads to a confluence of logistics and temperature data. Jim Bacon, senior director of global demand planning and customer operations at Talecris Biotherapeutics, stresses the need to merge logistics data with temperature records in transit to analyze the supply chain and identify trouble spots. Temperature probes should not only measure the temperature inside the box, but also outside the container, he says.

To stay on top of supply chain issues, Talecris has developed a core team approach with its providers, which draws in personnel from all involved parties. Together, they develop standard operating processes (SOPs) and key performance indicators (KPIs). “Establishing, measuring and reviewing KPIs with providers is key,” Bacon says.

SOPs and KPIs ought to be tied into service contracts between shippers and logistics providers, advises Eric Newman, vice-president of loss prevention at ProTecht Risk Solutions.

Wherever possible, logistics firms go for direct routings and avoid transits between flights for pharmaceutical traffic, but more and more often transfers cannot be avoided. Roach points out that traffic to and from emerging markets like South Africa and India, which have scant or no direct links, is on the rise.

This also has ramifications for packaging choices. Starry-eyed airline executives may view pharmaceutical shippers as unflinching users of top-notch technology and premium services regardless of the costs involved, but in reality, cost considerations have had a huge impact on shipping strategies in this industry. “Over the last three years, we have seen a huge increase in the number of people who try to get away from active (cooling) solutions to passive ones because of the costs,” reports Roach.

Over and above adequate measures to maintain ambient temperature during transit, Kuehne + Nagel stresses emergency plans to deal with contingencies as they arise. Central to this is a contact person who can be reached 24/7 to discuss how problems are best resolved.

Operators and shippers may have more need for contingency plans once the US implements the requirement for all cargo in the bellyholds of passenger aircraft to be screened prior to departure. Hitherto, this sector has been largely exempt from screening requirements, but as of August, all shipments on passenger planes departing from US airports have to be screened. Down the road, the US administration wants to extend the mandate to traffic entering the US on flights from other countries.

“One concern is that shipments cold be opened for inspection,” says John Collins, director of quality assurance at Novartis Pharmaceuticals Canada.

There are also questions on the potential impact of X-rays on pharmaceuticals. “The jury is still out on what X-ray does to pharmaceuticals,” comments Doug Foster, assistant branch chief with responsibility for the Certified Cargo Screening Program of the US Transportation Security Agency. He has observed a “skittish attitude” in this industry, which usually means, “I don’t want my stuff X-rayed.”

The TSA would love to see as many shippers as possible have their premises and security arrangements certified under the CCSP regime, which would eliminate the need for screening further down the supply chain. However, Foster admits that, although they are considered key to this program, shippers have been slow to embrace it.

This is all the more worrying for TSA officials and airlines as the anticipated pressure on screening facilities at airports is now expected to be worse than projected earlier. The massive drop in air cargo volumes last year made it easier for the industry to pass the previous milestones for tighter airfreight security regulations, Foster concedes. “If the economy improves, there will be trouble,” he warns.

In addition to the screening conundrum, US authorities have caused further concern with proposals for tighter regulations governing the transport of lithium batteries on aircraft – to the dismay of forwarders and airlines, who have warned of a severe impact both in terms of cost and supply chain disruption. At this point, it looks as though lithium batteries used in temperature probes, which are critical for keeping tabs on ambient temperature, are considered too small to be affected by the proposed rules, but industry executives are still waiting for the all-clear signal from Washington on this aspect.

While shippers and logistics providers are still grappling with the emerging security regime for air cargo, further clouds are forming on the regulatory horizon. So far, the focus in terms of rules for the airborne transportation of pharmaceuticals has been squarely on maintaining requisite temperature bands, but a new element is beginning to enter the picture.

“Humidity is hardly mentioned, but is a key stability factor. This is becoming a hot topic and should be regarded as an omission,” warns Ian Holloway, manager of the Defective Medicines Report Centre in the U.K. “Regulators are becoming more and more concerned about humidity.”

This would present formidable challenges for this industry. Collins points to the paucity of relevant data. “Warehouses
usually do not monitor humidity,” he says.

For the near future, Holloway does not foresee any significant move in this direction that would have broad repercussions for the entire industry. The focus will likely be on traffic from hot, tropical origins, particularly shipments moving on ocean vessels. Still, the need for closer collaboration and more robust solutions looks set to be a driver of pharmaceutical and healthcare logistics in the coming years. CT&L

Ian Putzger is an award-winning journalist with more than 20 years experience covering transportation and logistics issues. He is a former writer and editor with the Hong Kong-based Asian Sources Media Group, and Airtrade, a British magazine covering the global air cargo industry.