"The need for speed to the market … will continue to rise no matter what"

Cold Chain IQ spoke to David Bang, Global Head of DHL Temperature Management Solutions / CEO LifeConEx, DHL Global Forwarding on the advantages of airfreight.

In regards to the recent trend of more in the industry opting for sea freight due to cost efficiency, what are the advantages of choosing air freight over sea freight?

The first advantage is rather an obvious one, speed. And the second one is regulatory (health authorities) compliance. Some of the life sciences products are better suited to be transported by ocean due to the fact that the respective product lines are focusing on feeding the steady demand with predictable volume. Furthermore, their product value justifies this transport mode. On the other hand, new products are constantly being introduced to new markets, which requires speed and flexibility based on smaller batch moves. The need for speed to the market and being able to accommodate fluctuating market demands will continue to rise no matter what.

[inlinead] Speaking of the second advantage "regulatory compliance", over the last few years, the airfreight industry as a whole stepped up to the plate to relieve some of the recent regulatory compliance pressure that the life sciences & healthcare industry is facing, such as EU GDP . This was introduced back in 2013 and is now generally accepted as standards by many non-EU countries too (including USA, China, India, etc.). Some industry wide initiatives include IATA Temperature Control Regulations, IATA Time & Temperature Sensitive Label, and IATA Center of Excellence for Independent Validators (CEIV) for Pharmaceutical Logistics. We at DHL Global Forwarding have not only been active with these industry wide efforts and other consortiums, but also have been investing in the new technology and process control advancement in this segment such as DHL THERMONET and LIFECONEX services.

Key tips to ensuring ROI when it comes to opting for air freight?

It starts with clearly understanding your ultimate objectives and working with a life sciences & healthcare logistics partner who understands the nuances of the industry, has a strong infrastructure in place and can ensure compliance, visibility, and consistent processes on a global level. Ensuring the product gets to the patients under the right conditions requires a complex balancing of cost and risk. Non-appropriate transport conditions lead to "broken" cold chains and can result in loss of a shipment worth hundreds of thousands of dollars. The consequences over the longer term can be a damaged reputation, slumping sales, potential share value and even pose a risk to patients - all high stakes for a LSH company. Partnering with the right logistics provider can help a pharmaceuticals company overcome such challenges. For example, by re-engineering the packaging solution that works with our end-to-end process management and keen intelligence on aggregated ambient data intelligence, some of our customers are able to reduce their total cost (not just transportation but all other key cost elements) substantially while maintaining the high quality and following the regulatory and compliance standards.

What does the future of air freight industry look like in your eyes?

For me, it comes down to more transparency and consistency. Yes, paperless, data availability, standardized processes, etc. are all part of this thinking too. In other words, only those who truly built the foundation from ground-up will play significant roles in this life sciences & healthcare air freight industry sector, because service excellence in this industry comes from long-term vision on the investment and partnership with many parties and organizations.

How does the industry need to develop in regards to optimising the use of airfreight?

First of all, we need to maximize the values of what we’ve already started such as IATA Time & Temperature Sensitive Label, and IATA Center of Excellence for Independent Validators (CEIV) for Pharmaceutical Logistics. However, this is not an easy road ahead, because not only the airlines and forwarders but also significant life sciences & healthcare shippers need to stand behind on these industry standardization efforts. Other words, it won’t last or benefit only some.

Tips to end-users in optimizing their use of air freight?

Be clear about delineating and articulating your service requirements internally as well as externally with your logistics provider, and try to look at your supply chain from end-to-end perspectives not limited by INCO terms. Not only this will save time and hassle down the road, but also you can have more satisfied customers at the end and this can be a good foundation for your logistics partner to come up with continuous improvement ideas to bring more values to your organization.

Recently a major biotech company we work with took this as their major global initiative by standardizing their own service requirements at each origin, destination, and their regional and global offices. At the end, everyone in that organization responsible for quality, logistics, packaging, procurement, and customer service knew exactly what the product temperature requirement is and what the transportation temperature requirement and tolerance are, which made the end-to-end process work like a clock, reduced the quality issues and increased customer satisfaction.

DHL will speak about some interesting findings from their whitepaper: "The Smarter Cold Chain" at the upcoming 13th Cold Chain GDP & Temperature Management Logistics Forum (Boston, October 5-9, 2015).