Will CEIV Accreditation Bring Shippers Back to Air Freight?
Transporting temperature-controlled items by air is not only costly but also prone to many mistakes in the management and handoffs of valuable pharmaceuticals and other perishables. We’ve all seen the statistics in various publications:
· The air cargo share of global pharma products transport has declined from 17% in 2000 to 11% in 2013.
· The Seabury Group maintains that every year 0.5 million tonnes of pharmaceutical products are transported by airr, compared to 3.5 million tonnes by sea.
· Over half of all temperature excursions happen when products are being handled by airlines and airports.
· Annual product losses associated with these handling problems are said to range from $2.5-$12.5bn. IATA labeled this statistic as “unacceptably high in a $300 billion a year market”.
So, to address these concerns, the International Air Transport Association (IATA) introduced the CEIV Pharma Standard in 2015. Its aim is to “improve the handling of pharma in the air cargo industry by restoring reliability and safety across the supply chain”.
While the CEIV accreditation ensures that companies involved in the transportation process can be trusted to follow safe handling practices, there’s also been a lack of communication between the different partners across the supply chain. As a result, IATA designated the Brussels Airport and Miami International Airport as major pharma hub airports. In turn, the two airports set up Pharma.Aero, an independent association bringing together CEIV-certified members including airports, pharmaceutical shippers and other cargo stakeholders from around the world. The mission of the group is to “foster collaboration between CEIV pharma certified airport communities dedicated to developing and leading when it comes to handling pharmaceuticals”.
Since the formation of Pharma.Aero, Singapore’s Changi Airport, the UAE’s Sharjah Airport as well as Singapore Airlines and Brink’s Life Sciences have also joined the group. In addition, buy in for the association has come in the form of endorsement letters from several pharmaceutical shippers, including MSD, UCB and Pfizer.
While it may be too early to determine the success of the CEIV accreditation and the Pharma.Aero association, Changi Airport has noted its pharmaceutical traffic increased 19% year-over-year the first nine months of 2016, due to efforts to improve the airport’s pharmaceutical handling standards.
Other supply chain partners are investing in the CEIV accreditation. For example, in January of this year, Bolloré Logistics became the first transport and logistics company France to receive certification for its Paris Roissy CDG platform. It had already received certifications for its sites in Belgium, Germany and Portugal.
According to the company, “By certifying our hubs around the world we are able to guarantee our customers airfreight transportation respecting the cold chain and the strict quality standards required by the pharmaceutical industry. This certification demonstrates our ability to standardize our end- to-end processes from origin to final destination”.
Kuehne + Nagel set a milestone by announcing its entire global KN PharmaChain GxP compliant air network which currently includes 86 locations around the world is CEIV certified. The Senior Vice President Products & Services Global Air Logistics at Kuehne + Nagel commented “We will drive this standard towards our supply chain partners as well for the benefit of our customers.”
Bolloré Logistics and Kuehne + Nagel are certainly not the only logistics providers to achieve CEIV certification is growing with the likes of DHL Global Freight Forwarding, DB Schenker, Panalpina and Geodis.
Galeão International Airport became the first airport in South America to earn IATA’s CEIV-Pharma Certification. Besides extensive training, audits and assessments, followed by improvements to the airport’s pharmaceutical handling infrastructure and processes, the airport also opened its pharma facility, which tripled the airport’s cold-storage capacity, the facility stands at 11,000 square meters. IT is fitted with a fully automated cargo storage system for faster operation and two temperature-controlled environments. Around 20% of the airport’s cargo total revenues are represented by pharma freight. The airport is also a hub for the Brazilian government’s pharma campaigns that target remote areas.
By establishing uniformed global standards, CEIV certification could solve many concerns that shippers have with temperature-controlled air cargo. While it may be too early for meaningful market data to determine its progress, it appears more and more logistics providers, airlines and airports are embracing the process. Perhaps as more embrace it, handling costs will decline and ultimately any cost savings achieved will be passed on to the shippers – otherwise, shippers will not be incline to shift from other modes of transportation.
Hear from The Seafreight Working Group Chairman Mark Edwards on Pharma's Airfreight vs Seafreight Boxing Match