Guest Insight - Reaching Emerging Markets Through Cold Chain Collaboration

Even as established markets continue to experience economic challenges, emerging markets around the world are showing strong growth and opportunity in air cargo. With growing middle classes and incomes, pharmaceuticals are among the air cargo commodities in highest demand in these regions. While this means new opportunities for pharmaceutical companies, air forwarders and carriers, moving air cargo into emerging markets is a complex and multifaceted endeavor.

Carlos Castro is Bayer Healthcare’s Transportation/ Cold Chain Project Manager, working on supply chain quality. With growing demand for pharmaceutical products in emerging markets, Castro sees risks for temperature-controlled air cargo downstream, that is, when the cargo arrives in country. There is a litany of factors that can threaten product integrity in the supply chain, and the best way to address these threats, as Castro said, is through collaboration between the shipper, the forwarder and the carrier.

"Coordination between the freight forwarder and the consignee is critical to making sure that product movement is not delayed in transit," said Castro. "We have a communication strategy with respect to the freight forwarder to lead that effort and communicate back to us. Thus, the data mostly comes from the carriers."

Castro said pharma companies need to draw on logistics data to develop an understanding of routes to and conditions in emerging markets. And information sharing needs to flow in both directions, with carriers and forwarders informing shippers, and the pharma manufacturers informing their logistics partners. This is critical for the forwarders and carriers to understand the constraints under which cargo must be kept to preserve product integrity.

"There is work that needs to be done with the freight forwarders, with the carriers, as well as with the consignee to understand requirements before any deliveries are made. Part of this includes infrastructure."

In developing countries, the integrity of temperature-controlled air cargo can face threats from the under-developed infrastructure needed to accept and safely hold cold chain products.

"If your product requires a controlled temperature room," said Castro, "there might be limited space or it might not be available. There are times when if there is no space, you might be asked to not continue with the shipment."

Carlos Castro, Transportation/Cold Chain Project Manager, Bayer Healthcare

Once temperature-controlled cargo enters the supply chain, time is of the essence and any delays or missed connections compound the threat to product integrity. On arrival, cargo may still experience delays from customs or health inspections. Unless the receiving airport has the infrastructure to preserve the optimal temperature, the product quality could be compromised.

Castro said he and other Bayer supply chain experts perform audits of origin, connecting or destination points, looking at the facilities firsthand to better understand how their product will fair upon arrival. Yet, shippers and manufacturers require the input and experience of forwarders and carriers who work in these locations every day.

Regulations can also present challenges when cargo arrives in a developing country. Differing regulations can make reaching new markets complex, but Castro said shippers and manufacturers need to turn to their forwarder and carrier to understand the regulatory challenges they may encounter.

Complex or confusing customs or regulations can lead to lengthy delays on arrival, which – assuming the cold chain infrastructure is present – can make it difficult to maintain integrity until the consignee can pick up their shipment.

"Let’s say you have the arrival on Friday, and the cargo will be picked up on Monday or Tuesday," said Castro. "I have 3 to 4 days that it will be in storage. That’s more difficult to control in emerging markets because most of these markets are controlled by public or state companies, staffed with state workers. It makes it very difficult to influence the customs or health authorities to ensure the cargo is safely stored."

Despite the many challenges, pharma manufacturers and the logistics industry are finding great rewards in pursuing opportunities in emerging markets. For Castro, the key to unlocking the most effective supply chain partnerships from end-to-end is communication and collaboration.

"We [pharma manufacturers] are not in the business of freight forwarding or aviation, so we need to understand. We need to be educated about what is available to us. And I think communication is key. I do an active monitoring of cargo where I engage my logistics partners and tell them as much as they need to know about my product. I share data with them so they keep improving while I keep learning. I think with every visit to the airport, I learn something new."

First published on http://aircargoinsights.com/expert-insights/guest-insight-reaching-emerging-markets-through-cold-chain-collaboration/

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