I f airfreight operators want to claw back pharmaceuticals (pharma) market share from their seafreight counterparts they need to address the “unacceptably high” amount of product write-offs due to temperature spikes across the supply chain. According to recent International Air Transport Association (Iata) figures, airlines currently carry around 0.5 million tonnes (mt) of pharma products compared to the 3.5mt carried by shipping lines. Managing director of SPX Logistics, Sophie Goosen, told shippers attending a Savino Del Bene Pharmaceutical and Healthcare Interactive Forum in Johannesburg last week that the pharmaceuticals industry would be worth US$850 billion next year, with temperature-sensitive products worth around US$250bn of that figure. “Yet the annual writeoffs on airfreight amount to US$2.5-US$12.5bn, an unacceptably high figure.” She said that the logistics costs of pharmaceuticals and vaccines would be worth US$10.2bn next year. According to Goosen, over 50% of all temperature spikes (or excursions) occur while pharma products are in the hands of airlines, freight forwarders, handlers and airports. A representative of a major global biopharmaceutical firm told FTW on condition of anonymity that his company had made the decision two years ago to switch 70% of the transportation of its product shipments to sea freight. “Our global company prefers airfreight for many reasons – including the ability to deliver life-saving medicines faster across the globe – but the tighter controls on ocean shipments were a big part of the reason we switched modes.” He said that the company still saw a number of temperature spikes via seafreight but that the damage to the products was minimal and did not lead to write-offs. “This is significant for us,” he added. Another shipper that mainly imports over-thecounter medications told FTW that the company had shipped over 90% of its cargo via seafreight mainly because the cargo (cough syrups and expectorants) was so heavy and it made financial sense. “We do use airfreight for about six of our products and I have to say I am pleased to hear that some of the airlines are investing more in their cold storage facilities on the aircraft and at the airports,” she said, noting that while there were some clearance issues and delays at South Africa’s ports, there were “zero hassles” in clearing airfreight products. Julian Sutch, who has the pharma: global sales portfolio for Emirates SkyCargo Dubai, commented that while the logistics industry was currently too fragmented for airlines to move towards a guarantee of no writeoffs he was confident that once the right levels of “open communication and alignment” were reached, this would be achievable. Lufthansa Cargo’s Faye Worrall, who focuses on customer development for the German carrier, told FTW that if shippers packed their pharma goods according to Iata guidelines, there should be minimal product damage.
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Logistics costs of pharmaceuticals and vaccines will be worth US$10.2bn next year. – Sophie Goosen
