Availability of equipment and infrastructure is key.
In early 2015, the Israeli ocean carrier ZIM Integrated Shipping Services launched its ZIMonitor product, which allows shippers to track, monitor and remotely control sensitive, high-value cargo stowed in refrigerated containers. Following a pilot project with Teva-Pharmaceutical Industries, a US-Israeli company known for developing and marketing generic drugs, the carrier, in late 2015, announced the addition of some 1,900 reefers to its container fleet. Equipment Challenge That development was emblematic of the efforts required in the quest to find less-expensive transportation alternatives for high-value pharmaceutical and healthcare product shipments. It’s an issue that has been on the industry radar screen since at least 2015, when a working group was formed to find solutions to the needs of pharmaceuticals shippers. One of the key findings of the final report of the Pharma Sea Freight Working Group, released in December 2016, was that the availability of reefers and other equipment and infrastructure was a challenge that needed to be addressed, especially in the emerging markets that are the fastest-growing purchasers of pharmaceuticals and healthcare products. Temperature controlled logistics is perhaps the fastest growing segment of the industry and the pharmaceuticals and healthcare sector are one big reason for that. Pharmaceuticals companies around the world increasingly strive to develop a global reach in terms of the markets they serve as well as in the locations of their production facilities. The developing world is a fast-growing consumer of healthcare products, and the number and level of logistics services focused on those areas of the globe are likewise growing. Pharmaceuticals and healthcare products often require temperature controls during transit and handling. That fact, and considering the time-sensitive nature of many products and scenarios, often made air freight the default option for getting these specialized goods to their destinations. But, like any industry, costs are also of the essence, leading pharma and healthcare shippers to explore cheaper ocean shipping options as well. This trend has been driven as well by governmental agencies around the world that procure medicines on behalf of their national healthcare systems and which have been pressuring the industry to come up with lower prices for their products. At the same time, governments have imposed more regulatory and compliance elements to the pharma supply chain, thus driving up costs, and putting the squeeze on producers.  “Today’s cold chain lanes aren’t confined to single countries or even continents,” said Kevin Lawler, vice president of sales at Pelican BioThermal, a maker of specialized packaging for the transport of pharmaceuticals and other healthcare products. “Having a comprehensive infrastructure in place, which provides global coverage, is essential to managing these types of payloads, eliminating the risk of temperature excursions and supporting the recovery of those assets for reuse. Expanding into emerging markets can be especially challenging when temperature-sensitive and high-value payloads are involved.” Pharmaceutical Market The global pharmaceuticals market has more than doubled in the past ten years, according to a recent report from Pharmiweb, and is expected to reach $1.3 trillion by the end of 2018. The global market for bio-pharmaceutical logistics was valued at $61.1 billion in 2014 and is expected to reach $91.0 billion by 2020, growing, according to the report’s forecast, at an annual rate of 6.9 percent. By 2018, emerging markets—including China, India, Brazil, Russia and Mexico—are expected to account for nearly 50 percent of growth in drug spending. Markets in Asia, Latin America, the Middle East, and China are becoming more attractive to pharmaceuticals companies but these same markets are considered the most challenging in terms of supply chain management and the kinds of challenges identified in the Pharma Sea Freight Working Group. Sub-Saharan Africa is also on a positive growth trend when it comes to healthcare spending, according to a report from Deloitte. Growth in healthcare spending across Africa is forecast at around three percent until 2020, with 14 of the top 15 countries in the region currently spending over $1 billion per year on health. DHL Life Sciences & Healthcare recently expanded its capabilities and services in Africa. Africa is considered the final frontier in delivery of healthcare services and there are a number of service delivery challenges to be overcome.  “Africa is home to one of the fastest growing middle classes and access to healthcare products and services is critical,” said Hennie Heymans, a DHL executive in charge of sub-Saharan Africa.  Over the past two years DHL has equipped 16 countries in sub-Saharan Africa to handle dangerous goods, enabling the movement of temperature-controlled consignments throughout its network. An additional seven countries are planned for dangerous goods certification in 2017. The company has also set up logistics centers and capabilities in 21 countries across sub-Saharan Africa, providing locations for short-term stock holding and the distribution of healthcare products. What Lawler calls “pharmerging countries” present new opportunities for big pharma. “However, he added, “demand growth for protection of critical payloads in these emerging markets place a substantial emphasis on the need for high-performance temperature-controlled, cost effective, reliable and sustainable packaging.” The Pharma Sea Freight Working Group agreed with that assessment and made several other recommendations on how to actualize shipping pharmaceuticals on ocean vessels. (See related story on page 21.) Because temperature excursions can happen quickly when a refrigerated container is unplugged or in the event of a malfunction, the report recommended the evaluation of the use of additional passive solutions such as thermal blankets and packing equipment such as those Lawler referenced. Integrated temperature tracking devices were also recommended in order to receive early alarms of problem situations, allowing potential corrective action to be taken. “Specific procedures for corrective action will need to be agreed with the shipping line and/or freight forwarder,” the report concluded, “since the possibilities for action vary across the different providers.”