Pharmaceutical Logistics – A Comparison

Published by Ariel Arcebido on

pharma air freight

A comparison of the top pharmaceutical logistics companies and their specialist cold chain for the pharmaceutical industry. Logistics can be a big challenge for pharmaceutical companies, and it can be frustrating in deciding which shipping company would best meet cold chain standards.

There is a good list of logistic providers today that are competing in the shipping industry. Therefore, 3PL’s (Third Party Logistics) providers must be carefully evaluated by choosing which features of the many different services available will be useful for the desired cold chain delivery system.

Before selecting which is the best provider for a company, it is important to measure the volume of products and the destinations where they are going. This can greatly influence the choice of Delivery Company from those more focused domestically, to those operating more globally.

Having a fixed budget would help in reducing the shipping costs. Depending on the profitably of the medical items, companies should consider the different levels of services according to the customer base and competitive pricing. This includes benefits such as weekend delivery and same-day delivery. These can help attract new customers from different venues, with varying expectations.

Ocean freight already can be a difficult process, now try to imagine shipping sensitive pharmaceuticals. This heightens the varying challenges for logistics of drugs, medications, and biologic materials. These products need to be kept at extremely precise temperatures, as any glitches in transporting them could result in loss of profits or worse, the failure to save a life.

Pharmaceutical cold chain technologies have improved dramatically in the last few years, providing better options and processes to ship and store pharmaceuticals and biologics. The demand for cold chain drugs is expected to rise 59% in the years from 2017 to 2023, creating a demand for new technologies that meet industry regulations and ensure safe delivery. It is estimated that 20% of pharmaceutical products are damaged during transport due to temperature fluctuations. That is a loss estimated to be around $35 billion per year. This is a sure sign there is a need to overcome serious logistics challenges in the pharmaceutical industry. Pharmaceutical companies reiterate that 50 percent of their products require temperature control. As the production of vaccines and biologics continues to grow, so will the demand for refrigerated shipping solutions.

Pharmaceutical products must be at a precise temperature to retain their efficacy. These include flu vaccines and insulin. Also, thermal blankets are used to protect against sunlight, humidity, etc. They can help maintain a temperature range of around 15°C to 25°C (59°F – 77°F).

Approximately 7 of 10 leading pharmaceutical products need to have temperature-controlled transportation.

Biologic material (e.g., blood, tissue, reproductive material) and clinical trials are shipped in cryogenic containers that can hold the temperature at -150°C (-238°F) for at least 10 days.

Just 2°C (35.6°F) of temperature fluctuation could destroy the pharmaceutical products.

Pharmaceutical companies can lose an average of $150,000 per small package shipment due to temperature variations. For larger shipments, the loss could reach up to millions of dollars.

Logistics companies are often required by the supply companies to deliver pharmaceutical products under tight standards. These often include zero damage, zero tardiness, and the possibility of tracking and tracing. It is estimated that the Global pharmaceutical is spending over the $1 trillion mark for the first time in 2014, which is equivalent to 1.3% of global GDP. This figure will increase as the pharmaceutical market is estimated to reach $1.12 trillion in 2022.

To maintain accurate temperatures during transport, companies often take advantage of special equipment including cryogenic containers, dry ice, thermal blankets, and insulated packaging. Temperature sensors are also added to monitor the product’s temperature throughout the shipping process.

As always, it is difficult to achieve smooth shipping, and it’s best to have additional resources ready. In the event of delays, such as Food and Drug Administration (FDA) inspection, or other unscheduled setbacks, further measures are needed.

International and express air freight rates per kg

Air cargo is used by pharmaceutical companies if they need to get the products to their destinations rapidly and safely. While 90% of all cargoes are shipped by ocean freight, air freight connects the world more quickly, reducing freight shipping time.

International air freight and express freight shipments are two different things.

Express air freight is operated by a company (such as DHL, UPS or FedEx) that takes care of the entire shipment lifecycle, with shipping from door to door in under five days. The packages for the express air freight shipments are smaller (less than one cubic meter and 200 kilograms) than air freight.

In a typical season, international air freight rates are priced somewhere between $2.50-$5.00 per kilogram, depending on the type of cargo being shipped and available space.

Airfreight shipping prices and costs

When shipping to air freight, weight and volume are the influencing factors. Air carriers are priced by either volumetric weight (also known as dimensional weight) or actual weight, depending on which is more expensive.

The air shipping global pricing process for freight is to calculate the volumetric weight, then multiply the item’s volume in cubic meters by 167. The volume for a package that is W: 40cm, H: 40cm L:40 would have a .064 (the product of all sides divided by one million). Multiply by 167, and you get a volumetric weight of 10.67 kg.

If the volumetric weight is heavier than the actual weight of the product, the volumetric weight is the chargeable weight. For lightweight air shipments, the chargeable weight calculator will work out whether your shipment will be charged by actual weight or dimensional weight.

For example, in a typical season, air freight costs from China to the US range from approximately $2.50-$5.00 per kilogram, depending on the type of cargo being shipped, and available space.

The benefits of air freight

There are three advantages of air shipping:

            Speed – this is much faster than ocean shipping. It usually takes two to three weeks for ocean shipping to reach the US coming from China. For airfreight, usually from 24 hours to 36 hours, depending on the urgency and clearance from customs. In shipping costs, air freight is usually five times the price of trucking and sixteen times the price of ocean freight, according to the World Bank.

            Reliability – real-time tracking of the products is much faster than with ocean freight. It ensures that goods will get to the right place at the right time.

   Protection – The products are more likely to be ruined during ocean freight shipping than air shipping.

The price for the air freight price will include:

  •  Fuel surcharges
  • Security surcharges
  • Container freight station/terminal handling charges
  • Airport transfers

 

Additionally, for door-to-door costs, the price will also include air cargo services, including:

  • Customs brokerage
  • Pickup and delivery
  • Cargo insurance

When it comes to choosing between carriers, there are several factors to consider, such as shipping rates, services, and overall value. There are three large shipping companies especially fitted for pharmaceuticals — namely, DHL, FedEx and UPS.

DHL

DHL is an American-founded company that is headquartered in Bonn, Germany which is now part of Deutsche Post.

It is known to be the world’s largest logistics company. Its international delivery points are the strongest among all the carriers, and it is the only carrier that can deliver to sanctioned nations like North Korea.

DHL is a good choice for international shipping, but it is not allowed to ship within the US because of its status as a non-American company. Since it cannot make domestic flights between U.S. airports, it sub-contracts U.S. domestic services to other carriers.

DHL operates a whole wide array of services to cater to the shipping needs of its customers. It is the world’s largest logistics company and currently has offices in over 220 countries worldwide with courier, parcel, and express mail services.

  • DHL Warehousing has the following features for the cold chain storage:
  • Shared or Dedicated Warehousing & Goods Distribution
  • Dedicated and shared operations
  • Ambient and temperature-controlled facilities
  • Storage, pick, pack and dispatch
  • Delivery and returns management

DHL Life Sciences and Healthcare Logistics

DHL have a dedicated arm that specializes in the cold chain logistics requirements of the pharmaceutical and life sciences industry.

DHL Life Sciences and Healthcare have solutions for :-

Temperatrue Controlled Airfreight

Offering 24/7/365 proactive shipment monitoring and intervention, this service delivers regulatory compliance with high visibility of the Customer’s product movement throughout the supply chain.

Meeting global standards for temperature-controlled life sciences air freight shipments, the service is supported by our global Good Distribution Practice (GDP) compliant network of certified life sciences stations.

Adhering to regulatory compliant customer procedures, this service is managed through the industry-dedicated IT system ‘LifeTrack’.

Temperature Controlled Ocean Freight

Designed for temperature-controlled ocean freight life science shipments that require real-time visibility and active monitoring.

Time Sensitive Transportation

Transportation of time and temperature sensitive investigational medicines, clinical supplies and support materials to clinics and hospitals, and the inbound return transportation of time or temperature sensitive specimens to laboratories and research organizations often related to a Clinical Trial.

FedEx

FedEx is an American multinational corporation formed in 1971. FedEx ‘s central headquarters is in Memphis, Tennessee.

It holds the distinction of having the most planes in its fleet: 670, outpacing UPS, and DHL.

FedEx introduced an overnight shipping service with a system capable of tracking packages and providing real-time location updates. Today, it has locations in over 220 countries and territories. Within the US, you can pick up, drop off, or ship at more than 50,000 FedEx locations.

FedEx Healthcare Solutions

FedEx have a dedicated logistics arm that specializes in the needs of the pharmaceutical industry. They provide specialist packaging options to maintain the thermal barrier and keep the temperature sensitive pharmaceuticals cool. This eliminate site weight and expense of dry ice or gel packs, at the same time as protecting the goods from fluctuations outside the 2°C to 8°C range. Find out more…

FedEx also offer deep freeze shipping where temperatures of up to -190°C can be maintained for 10 days. This is for specialist biogenic products and the new bio similar type drugs and gene based therapies. Find out more….

FedEx have a monitoring system for you to keep an eye on your shipment throughout their logistics network. Monitoring, customized reporting and an ISO certified closed loop cold chain.

UPS

UPS is the oldest of the major carriers and the reigning dominant logistics company in the US. It was founded in 1907. It has offices in 220 countries and territories. It delivered over 5.2 billion parcels in 2018, an average of 21 million per day. It has a fleet of 123,000 vehicles, of which more than 10,000 use alternative fuels. This is the largest fleet of alternative-powered vehicles in the world. UPS increased the rates of its services an average of 4.9%, effective from December 29, 2019.

UPS Healthcare Logistics

Shipping specialty pharmaceuticals presents a unique set of challenges that require an array of specialized solutions. Its extensive warehousing and distribution capabilities help meet customer demands for time- and temperature-sensitive deliveries. The expertise, industry knowledge, and technology solutions of the UPS Healthcare global team, can help shippers confirm that their products safely reach their customers, when and where they need them.

With UPS Premier, they are using next-generation technology to offer the highest-quality tracking and management options for critical shipments

Temperature-Controlled Packaging and Transportation

From a small package to palletized freight, they help keep products at the right temperature all the time.

Warehousing & Distribution

Coolers, freezers, cryotherapy chambers are available across 116 buildings all over the world; offering the best quality program and storage capabilities for regulated products.

Conclusion

All these logistics providers today are equipped with state-of-the-art cold chain storage facilities because they understand the importance of shipping medical products safely and in pristine condition. They know there are people whose lives are on the line in receiving medicine on time.

With the present pandemic ravaging the world, these companies will be the main players to deliver the vaccines necessary to save lives. Every logistic provider in the world, whether big or small will have an important role in eradicating this virus.

What really matters in finding the right transportation providers depends on how much the company wants to spend on the transport and how safely and efficiently those companies can deliver products to their destinations.  


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