Is Ocean Shipping the Future for Pharma Cold Chain?
Is ocean shipping the future for pharma cold chain logistics? Traditionally air freight was the favored method of cold chain transport. For many years, pharma companies preferred air shipping over other international shipping methods—and for good reason. Air shipping is faster than other means of transport. Time is of the essence for sensitive biological substances like vaccines. Fast air transport might be, however, the obvious choice if the distance is the only significant factor. Today, temperature, environmental impact, and cost all play an increasingly vital role in selecting options for the best international transport.
For the past five years, ocean shipment has taken on much greater visibility in the pharma cold chain industry. Pharma companies have started to transport larger volumes of medicines using ocean cargos. In 2012, AstraZeneca sent only five percent of goods by sea, but it grew to 70 percent in 2017. Baxter, another leading pharma manufacturer, dropped its air shipments to nine percent in 2017, preferring ocean and land-based transport over air shipping. Moreover, Europe’s top health care provider, Sanofi, chose sea transport for 80% of its intercontinental shipments.
What were the reasons behind this major shift? In this article, we’ll discuss why ocean shipping is being preferred over traditional air shipments. Despite it being a major choice, we also lay out some reasons that not all pharma companies are using this method 100%. Most companies still opt for intermodal transport or a combination of both ocean and air shipping.
Advantages of Ocean-based Transport
Better Control of Temperature-Sensitive Products
Temperature-sensitive substances such as vaccines are well suited in as cargo where the temperature is well maintained. Over the years, refrigerated sea cargo containers, called reefers, have become more sophisticated. They are equipped with redundant refrigeration systems comprised of two parts: integrated primary, and back-up refrigeration units. If the primary unit malfunctions, the secondary unit automatically starts. To power the refrigeration units, these containers are often provided with one or more diesel generator sets. Containers equipped with these systems can transport goods sensitive to heat and freezing. Plus, they comply with International Maritime Organization’s regulations.
The World Health Organization (WHO) collaborated with PATH to conduct an economic comparison of five international shipping methods. Ocean-freight transport emerged as the most economical and least expensive of all options in the study. Transporting through ocean cargo is still inexpensive, even if only a quarter of a 20-foot reefer container is used.
The graph below shows the cost (in thousand dollars) per shipment of all transport means. Active system ocean reefers are still cheaper than passively cooled air transport options.
According to this article, ocean shipping is 80 to 90 percent cheaper than air shipping. Also, ocean-transported pharmaceutical products such as vaccines are well monitored, preventing unnecessary vaccine wastage.
Ocean shipping can also accommodate larger volumes of products than air shipping. Reefers are typically massive so they can contain a lot of vaccine products in a fewer trips. Fewer trips result in lower costs. Apart from the size, ocean transport is less expensive because it uses less fuel than air freight transport.
Theft can also incur unnecessary costs. Large reefer containers prevent such events from happening. On board, reefer containers are tightly packed, so accessing what’s inside seems almost impossible.
As more and more companies are aiming for reduced carbon footprints, ocean-based transport for vaccines and pharmaceutical products are attracting attention. Ocean shipping is the most carbon-efficient mode of cargo transportation. It produces fewer grams of exhaust gas per ton of cargo than air, road, or rail transport. Plus, 98 percent of ocean-bound cargo around the world is recycled products, making its environmental impact the lowest.
Baxter International in 2017 had the goal of limiting its carbon footprint by going ocean-based in most of its intercontinental transport. The company’s efforts became fruitful as the next year, they decreased their CO2 production by 25 percent.
Another reason marine shipping emits less carbon than its counterparts is heavy regulation. Maritime International regulations establish strict standards for vessels’ nitrogen oxides (NOx) and Sulphur oxides (SOx), and particulate matter emissions. Because of very good regulation, marine shipping accounts for only four percent of CO2 emissions.
Challenges to Marine Shipping of Vaccines
Even though the transport fees are way cheaper as mentioned, there are added costs to the cargos when they are received from the port. Terminal security fees can rack up the cost. A 20-foot reefer containing rotavirus vaccines or pentavalent will hold a shipment value of approximately $1.8 million and $2.8 million, respectively; thus, requiring additional security measures. The recipient of the vaccines will also shoulder the payment for the shipping company services such as real-time temperature monitoring and back-up power.
Handling of the Products
Port carriers and handlers might not be trained to handle temperature-sensitive vaccines and other biological products. Apart from that, ocean shipping accommodates a larger volume of products, not just pharmaceutical ones, hence there is a risk of severe congestion. It can result in severe delays and will, in turn, diminish the potency of vaccines. These problems are one of the biggest threats to vaccine temperature requirements.
Not Prequalified Reefer Container
Despite having refrigeration systems, not all reefer cargo containers are prequalified to carry vaccines. Failure might arise from a reefer cargo that is not pre-approved. Before any transaction, the shipping company and their customers must negotiate for added protection of the products. Because of these inherent risks, the Pharmaceutical Cold Chain Interest Group at the Parenteral Drug Association formed the Temperature Controlled Sea Containers task team. The organizations published industry guidelines for specifying qualified ocean shipping company parameters. To be considered for the vaccine cold chain, shipping companies must possess adequate reefer technologies, prequalification procedures, temperature control capabilities, reliable power supplies, and route planning expertise.
Ocean shipping has gained attention over the years. Air shipping continues to be an unreliable choice when the factors of cost and environment are considered. Although ocean-based transport still lacks some regulations, confidence in port handling and full security, there is no doubt that it will eclipse air shipping in the next decades. As larger companies such as Baxter, Sanofi, and AstraZeneca are inching away from air shipping and towards ocean transport, more companies will soon join in, making it an established alternative to air transport, if not a total replacement.