The IATA Label - Will it Stick? - Part I

It's been more than 2 months since the IATA (International Air Transport Association) announced (June 2012) the status change of the IATA Time and Temperature Sensitive Label from voluntary to mandatory with an effective date of July 1, 2012. The IATA label is to be affixed on the shipping containers to ensure the carriers handle the cargo within the temperature range expected by the shipper. The IATA label status switch had a very short notice (about 30 days) so it took many people by surprise, even to those (including me) who were aware of the label since its debut in the first quarter of 2010. When I learned about this change I rushed to open and read the IATA letter announcing the status change. IATA Time and Temperature Task Force (TTTF) also included a FAQ (Frequently Asked Questions) section to support the status change which I also read a few times. We need to remember that IATA only regulates its members (i.e. most airlines) and does not regulate pharmaceutical or biotech companies, freight forwarders, ground handlers, customs inspectors, etc. Today the application of the IATA label is still unclear because it states shipments "booked as time and temperature sensitive" need the label but it concedes many exceptions to its use. If a freight forwarder does not book your cargo as time and temperature sensitive then the IATA label mandate does not apply. We also need to keep in mind that perishable is not the same as "time and temperature sensitive".

I do have experience working in cold chain supply and have been using GMP (Good Manufacturing Practices) and GDP (Good Distribution Practices) strategies to actively manage temperature controlled chains for over 10 years so here it is my take on the IATA label.

Do we need the IATA label?

This is not a black and white situation and I can think of arguments for keeping as well as for dismissing the label. A label attached to the shipping container supports the need for communication and when used correctly it can help manage the temperature-controlled requirements in a supply chain, end to end. The value of GMP (Good Manufacturing Practices) and GDP (Good Distribution Practices) is to establish a framework to operate and manage healthcare supply chains that goes much deeper than labels so I believe that the standardized IATA label is the beginning of a bigger project.

On the other hand, there are already many labels and it is frequent to find the shipper (Warehouse) attaching multiple shipping labels, the freight forwarders adding labels too (tamper evident, security, etc), and finally the carriers (i.e. airlines) affixing labels linked to the service level purchased. Adding another label to shipping containers may increase confusion and the new label may become lost among the existing labels. I believe that most labels attached today have a function and they are intended for certain supply chain links (trucking, customs, airlines, receiving warehouse, etc). The IATA label may only be recognized by airlines and ground handlers at the airports but there are more supply chain steps outside the airport environment. Standardizing these multiple "airport" labels seems like a great idea but each airline has specific training and procedures associated to the temperature controlled service offered which is also constantly evolving to differentiate an airline from its competitors.

What are the benefits of a single (IATA) label?

The expected benefits of the label were forecasted and grouped in 4 categories by the IATA TTTF. Below I list the expected benefits:

Better identification by providing one unique, universally accepted and recognized label that displays the temperature range during transportation. Faster supply chain transit handling by increasing visibility and awareness. Greater reliability and accuracy by reducing delays due to inaccurate or inconsistent handling information. Decreases risk by reducing mishandling and adverse exposure. Currently, the IATA label may not be delivering the expected benefits because:

The label is not universally accepted and recognized by all cargo stations yet. The message has not cascaded down to all the airlines and even for those airlines that got the message, not all their stations are aware of the label. This effort could take many months if not years. Creating awareness outside the airport environment so other supply chain links recognize the IATA label may require an enormous amount of energy, resources and time. In my experience, the visibility is not provided by any label but rather by the booking (paid service level) which sets the service level. Airlines will flag the cargo in their system, add an airline specific label and treat the cargo accordingly to the mutually agreed (by all supply chain links) SOP (Standard Operating Procedures). Airlines offer many service levels and they are not likely to confuse a priority cargo in the same way they do not confuse first class and coach passengers. The AWB (Air Waybill) service level is linked to the booking and the AWB text must support the booking. The booking (purchased service) defines how the cargo is moved throughout the airline network and everyone in the airline organization is trained to recognize the flagged cargo (first class passenger). Standardization of handling temperature range in Air Waybill, Booking and Label and SOP may not be the best practice. The handing temperature depends on the country regulations you are dealing with and the temperature range in the AWB for some countries may need to match the country product registration and the same applies to some labels affixed to the shipping container. In these cases, the booking (annotations in the airline system) and SOP need to be aligned on the temperature range to handle the shipping container (different from the AWB). The label may also cause delays because if the temperature range written in the IATA label cannot be supported by the facilities at the origin, transfer or destination airports, some Customs or Sanitary officers may stop and place the cargo in quarantine for non-compliance. One country that comes to mind is Brazil, where the Customs can hold the cargo at the customs warehouse (administered by INFRAERO - Empresa Brasileira de Infra-Estrutura Aeroportuâria) and request the Sanitary Organization (ANVISA - Agëncia Nacional de Vigilãncia Sanitâria) to review discrepancies between actual handling conditions and AWB instructions to make sure that the product quality has not been compromised. For some other countries, the AWB must match the storage temperature included in the product country registration (usually the range +2°C to +8°C) and not the transit temperature range so the transit temperature is managed at the SOP level and is flagged in the airline systems. In these cases, the IATA label may not be reducing the mishandling or delay risks or increasing the visibility or accuracy but have the exact opposite effect. I suspect that the IATA label may not fully deliver the benefits planned by the TTTF group unless some changes are made to support the complex global supply chains. A benefit not accounted for is that the IATA label created communication and collaboration among the supply chain links because each participant was shaken from its comfort zone and forced to work together to understand this new label requirement. This is especially true for the people who do not actively manage their logistics and stay in their comfort zone (silos). Part II coming soon.

References:

http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-industry-communication.pdf http://www.iata.org/whatwedo/cargo/Documents/time-and-temperature-label-faq.pdf http://en.wikipedia.org/wiki/International_Air_Transport_Association http://en.wikipedia.org/wiki/Air_waybill http://www.worldtek.com/wp-content/uploads/2011/03/Time-and-Temperature-Oliver-Evans-Removed.pdf http://www.cnsc.net/events/Documents/kevin-o27donnell-presentation.pdf