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As Carriers Further Their Efforts to Tap This High WORLD AIRLINE WORLD AIRLINE PHARMA REPORT Riding the pharma wave As carriers further their efforts to tap he high-yield pharmaceutical commodity now forms half of what is best described this high-yield sector, the landscape as the ‘dynamic duo’ which, alongside continues to evolve as a result of T e-commerce, has turned into a steadily growing backbone for the air cargo sector, market developments, customer helping to keep it aloft over the last few years at times when traditional air cargo demand has been weak. demands and regulatory changes, :KLOHÀJXUHVRQLWVJURZWKYDU\ZLGHO\WKHUHLVQR reports Donald Urquhart disputing the lucrative nature of uplifting this valuable and highly sensitive commodity. The International Air Transport Association (IATA) says the global pharma market is expected to be worth US$1.2 trillion by 2022, with around US$12 billion currently spent world- wide on cold-chain biopharma logistics alone, forecast to rise to US$16.7 billion by 2020. With seemingly no end in sight for global pharma- ceutical demand and, by extension, specialist cool- chain logistics, it’s easy to see why companies are ea- ger to get a piece of the pie. One need only look at the plethora of speciality cool-chain products being rolled out by air cargo companies and the rush to achieve rec- RJQLVHGSKDUPDFHUWLÀFDWLRQV²WKH(XURSHDQ8QLRQ·V Good Distribution Practice (GDP) and the more recent ,$7$&HQWHURI([FHOOHQFHIRU,QGHSHQGHQW9DOLGDWRUVLQ 3KDUPDFHXWLFDO /RJLVWLFV &(,9 3KDUPD FHUWLÀFDWLRQ Dehio: A number of cargo carriers have being the two key routes. jumped on the pharma bandwagon 7KHÀJXUHVSUHVHQWHGE\VRPHDLUFDUULHUVRYHUWKH last couple of years also tell a tale of fantastical growth 20 CARGO AIRPORTS AIRLINE SERVICES $XWXPQ WORLD AIRLINE PHARMA REPORT that can seem out of sync with the sector shipments,” he notes. overall. While WorldACD data indicates Julian Sutch, manager for global cargo Tarvainen: Emergence of pharma volumes (chargeable weight) by air DFFRXQWV DW (PLUDWHV 6N\&DUJR VD\V DLU pharma ‘sub-products’ grew by 12.8% in 2016 over 2015, it is not cargo analysts may only track shipments XQXVXDOWRVHHVLJQLÀFDQWO\KLJKHUJURZWK LGHQWLÀHGDV¶SKDUPD·EHLQJPRYHGE\DLU numbers reported by carriers. whereas “much of pharma still gets regis- But there are a number of reasons for tered as general cargo”. But he agees that this. As Lufthansa Cargo’s senior product as pharma shippers and their forwarders manager for temperature-sensitive logis- have become more demanding in terms of tics, Chris Dehio, points out, the last few quality assurance, there has been a huge years have seen quite a number of cargo shift from pharma being shipped as gen- carriers entering the cold-chain market eral cargo to temperature-controlled, with and jumping on the proverbial bandwag- India seeing the largest shift. on. While these carriers have seen sig- QLÀFDQW JURZWK WKHLU WRQQDJH LV VWLOO ORZ Evolving pharma markets compared to established players in this Behind these changes is a tightening within sector, he notes. the regulatory environment for pharma And Finnair Cargo’s managing director manufacturers and shippers, including from Janne Tarvainen highlights a recent emer- organisations like the World Health Organi- gence of “sub-products under the Pharma sation (WHO) and international and national envelope”, which might also account for regulatory authorities, for more reliable the large growth rates. Pharma is also rather concentrated on a few origin points îLQ(XURSHWKDWPHDQVMXVWIRXUFRXQWULHV UHSUHVHQWRIWKHWRWDORULJLQPDUNHWî Tarvainen adds, and thus route openings may make a bit difference to the volumes of pharma carried. %XWSHUKDSVRQHRIWKHPRVWVLJQLÀFDQW reasons for the discrepancies between sector growth and individual carrier growth ÀJXUHV LV PRUH PXQGDQH GLIIHUHQW DS proaches to how these numbers are de- rived. As Fedor Novikov, deputy general director of pharma at AirBridgeCargo Air- OLQHV $%& QRWHV ´6RPH RSHUDWRUV XVHG to carry a lot of pharma shipments as gen- eral cargo, but now with the rise of clients’ requirements for transportation services, carriers won’t accept pharma shipments as general cargo, but will accept them only XVLQJ WKHLU VSHFLÀF ¶SKDUPD SURGXFWV· IRU temperature-sensitive goods.” Another reason could be differing ap- proaches to identifying goods as pharma- FHXWLFDO VKLSPHQWV ´7KH OLVW RI SKDUPD UHODWHG FRPPRGLWLHV LV KXJH KHDOWKFDUH shipments, medical devices, chemical rea- gents, etc., and different companies and market intelligence agencies have different ways of allocating them to pharmaceutical $XWXPQ CARGO AIRPORTS AIRLINE SERVICES WORLD AIRLINE PHARMA REPORT driven this change, he says. 0XFK RI WKH LPSHWXV IRU UHJXODWRU\ FKDQJH HPDQDWHV RXW RI (XURSH DQG WKH US, where the introduction of new stand- ards is traditionally implemented earlier than in other regions. As a result, most of the recent changes in customers’ require- ments are being felt in Asia, India, and 5XVVLDVD\V$%&·V1RYLNRY7KH(8·V*'3 for instance, has been adopted in Russia, and other pharma emerging countries are also on the way to changing their require- ments. And India, previously raw-material export oriented, is now well on the way to entering the more technologically ad- vanced pharma market, Novikov notes. “As a result, the market in India is re- viewing quality and risk management, temperature control during transport, says Customers are also increasingly aware and shippers are demanding more and (PLUDWHV·6XWFK of new guidelines and processes and often more services with constant temperature And although ‘pharma’ transport has al- require the transporting carrier or supplier control. For a long period of time, Asia has ways been a niche product requiring higher WRVLJQVHUYLFHOHYHODJUHHPHQWV 6/$V î been a more import-oriented market; but levels of care, until relatively recently there XVXDOO\GHULYHGIURP*'3JXLGHOLQHVîWR lately, as more new production facilities had not been any substantive benchmarks. manage compliance and service are being established in the region, the ´+RZHYHUDIWHUWKH(XURSHDQ8QLRQ·V*'3 levels. There is also an in- demand for air freight export of pharma implementation, the principles pharma crease globally in pharma products is growing,” he says. manufacturers use in their production compliance and capabilities /XIWKDQVD·V 'HKLR DGGV ´*HQHU VWDUWHG LQÁXHQFLQJ WKH WUDQVSRUWDWLRQ LQ of ground handlers, helping ally, we see an increasing drive of the dustry as well,” says ABC’s Novikov. to facilitate the seamless healthcare industry to close gaps in &OLIIRUG.ZRN&DWKD\3DFLÀF·VPDQDJHU transport of temperature- temperature-controlled cool chain lo- for cargo customer solutions and airline controlled pharmaceuticals. gistics. This makes it more important SDUWQHUVKLSV VD\V ´0RUH UHJXODWLRQV DUH The major pharma manu- to have immediate and being imposed on pharmaceutical ship- facturing destinations reliable access to infor- ment releases to the market as customers LQFOXGLQJ ,QGLD (X mation such as posi- are more concerned about the quality of rope and the US, are tion, temperature and air transportation.” This means customers all markets where other transportation have become more focused on airlines’ SkyCargo’s Sutch parameters.” This quality management, which includes sup- sees customers’ has led to a “strong plier management, with the expectation requirements evolv- motivation” to shift that airlines will deliver a consistent ser- ing. There has been from being correc- vice throughout the logistics chain. a certain amount WLYH î XVLQJ WKH Adrian Goh, senior manager for key ac- of consolidation data to prevent counts and verticals at Singapore Airlines in global product future disturbanc- Cargo (SIA), makes a similar observation. manufacturing and HVîWREHLQJSUH “Increasingly, customers are become guidelines from ventive, meaning more exacting in their requirements for international and using the data to processes to ensure product integrity,” national regulatory prevent disturbances he says. They are also seeking easier and authorities have before they occur. timelier access to shipment data, such as But Dehio says the real-time temperature readings throughout 1RYLNRY5LVLQJXVHRIVSHFLÀF pharmaceutical indus- the transport process, he adds. ‘pharma products’ try is not homogeneous, 22 CARGO AIRPORTS AIRLINE SERVICES $XWXPQ with share capital of ¤296,881,806. Registered office: 1 rue de France, (société anonyme) 93290 Tremblay-en-France, France. Registered in the Trade and Company Register under no. 552 016 628 RCS Bobigny. Aéroports de Paris is a public limited company WE MAKE LIGHT WORK OF YOUR HEAVIEST CARGO GROUPE ADP, SO MUCH MORE THAN CARGO When you choose Groupe ADP you can benefit from a complete cargo ecosystem combined with a tailor-made service and our expertise. Almost 600,000 sq.m of dedicated facilities, with a further 100,000 sq.m to be added over the next three years, as part of our Connect 2020 strategic plan. And to guarantee a quality of service adapted to the specific requirements of the pharmaceutical industry, Groupe ADP will also be introducing CEIV Pharma certification for Paris-Charles de Gaulle Airport in liaison with IATA. Positive steps to efficiently and sustainably support the growth of our Cargo customers. [email protected] groupeadp.fr WORLD AIRLINE PHARMA REPORT and individual companies have particular pharmaceuticals and specialised tailored Satisfying shippers needs that may vary considerably. This drugs are now on the rise, although devel- But such demanding markets, customers also depends on the type of medication
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