Why AstraZeneca is on course to achieve 70% sea freight volume ratio by 2018
At a recent conference, AstraZeneca and GSK provided insight into their sea freight transportation activities for temperature controlled medicines.
Currently, the majority of AstraZeneca’s medicines are moved by air.
But surprisingly at this year’s Temperature Controlled Logistics conference in their session Global Category Leader of Freight & Logistics - Julien Wann and Global Category Manager - Andrew Spencer noted that AstraZeneca is aiming to get 80% of each lane moved by sea.
For this shift Julien Wann noted that there will need to be a thought process evolution within the company, with optimisation being the key focus.
The pharmaceutical manufacturer has worked with sea freight for the past four to five years and it is now their mode of choice for large/bulk shipments. Also, it is starting to consider rail freight.
AstraZeneca has seen success due to the position it has taken on quality. Sea freight has rewarded them with cost improvements, lower emissions and more accuracy to prevent temperature deviations.
In his session on the sea freight focus day, Jeroen Janssen at GSK Vaccines agreed that sea freight transportation is becoming “more and more of an importance”.
When examining freight payments from a total cost perspective, sea freight can often emerge as cheaper. With airfreight, medicines will require additional protective packaging, but when transporting by sea often you can just use a reefer. Shippers should verify the quality of these temperature controlled containers as this can vary in different regions.
Ocean freight has a lower amount of touch points than air which shrinks the risk of cargo handling mistakes.
Jeroen Janssen noted that GSK has been pleased with the cold chain performance quality within ocean freight. Despite temperature spikes when loading or unloading, no product loss has been encountered as of yet. GSK is still considering a real time monitoring solution.
Shippers should invest into a collaborative approach by building relationships with shipping lines and freight forwarders to reduce risks to the medicines being transported.
Julian noted that the growing focus on biologics will bring tall logistics challenges.
He added that asthma and respiratory products are becoming key in Asia. In 2017, Tagrisso was prescribed in the US within hours of its approval.
Jeroen Janssen noted that ocean freight transportation requires shippers to manage lead times and processes There can be a struggle to react to very short lead times. For example, when bringing seasonal products to the market, i.e. a flu vaccine, sea freight is unlikely to fit into the needed timeframe.
Inaccessible locations can also present large issues for transporting temperature controlled products via sea freight.
More pharmaceutical shippers are looking to ocean freight as an alternative to the more expensive air freight. Indeed, ocean freight data provider, Datamyne, indicates in terms of TEUs, US imported refrigerated pharmaceutical goods within harmonized code 30, increased 18.1% from 2015 to 2016. This is even though the market went through a series of consolidations in that period.
Shippers will continue to evaluate alternative modes of transportation to ensure high-valued, temperature-sensitive pharmaceuticals are delivered to the final destination without being compromised. Air, Ocean, road and rail all have their benefits as well as drawbacks. Shippers will not only need to do their homework to determine the best mix of transportation, but also work with their supply chain partners to communicate needs and set expectations.