Modernizing Air Cargo
A blunt Alexandre de Juniac, the International Air Transport Association’s (IATA) Director General and CEO told air cargo stakeholders it was high time to push modernisation and focus on delivering high quality service. Indeed, after several years of virtually no growth, air cargo demand has begun to rise and “listening to the customer has never been more important”, he said while speaking at the recent World Cargo Symposium in Abu Dhabi. While “complicated and convoluted paper-based processes” that have basically remained unchanged from the 16th century were still being used in air cargo today, the IATA chief emphasised that “our customers pay a premium to ship by air and they rightly expect modern processes and high quality services”.
It is the second part of the modernisation process that is crucial for air cargo today. Two of the fastest growing and most profitable parts of the air cargo business that de Juniac mentioned were focused on meeting specific customer needs: e-commerce and time- and temperature-sensitive cargo. Shippers today wanted responsive services – especially true for time and temperature sensitive cargo. These services would be “based on intelligent systems able to self-monitor, send real-time alerts and respond to deviation… Finding solutions to unfulfilled (or even unrealised) expectations creates value for customers,” said de Juniac.
The importance that the IATA chief accorded to time and temperature sensitive cargo – or to put it simply, perishable cargo – was understandable. It is a segment that has attracted and continues to draw competition from airlines that are looking at higher yields and healthier growth than in the general freight area. A direct outcome of all this: Operators are boosting and continuously improving their offerings.
The improvements and enhancements apart, the air cargo industry and IATA have often been at the receiving end for not treating perishable cargo with the attention it deserves leading many shippers to move over to sea freight. However, the situation has been changing, thanks to IATA’s CEIV Pharma.
The art of Perishable Cargo
The global cold chain business is big business: it is likely to reach US $381.68 billion by 2025, according to a report by Grand View Research. Carriers around the world in the act of cold chain transportation have been taking initiatives to literally ‘beat the (competitive) heat’ with most of them battling it out to ensure that their cold supply chain processes comply with the standards set to maintain product integrity. Swiss World Cargo, for instance, has expanded its Celsius Passive product portfolio with high-performance container solutions after signing an agreement with va-Q-tec; who offer a unique advanced passive solution portfolio with five hard shell container sizes, taking up to two pallets inside, and temperatures ranges from -70°C to +25°C.
On the other side is United Cargo which announced that it was enhancing its TempControl service by accepting the Envirotainer RAP e2 temperature-controlled container. United is now able to transport the entire suite of Envirotainer’s active units on the airline’s network of TempControl-certified handling locations. The acceptance of the RAP e2 is the latest TempControl enhancement that follows the product’s guiding principle: to provide the locations, packaging options, and service innovations requested by customers.
Emirates, for example, has its SkyFresh. In 2016, Emirates SkyCargo transported close to 400,000 tonnes of perishables — including products as diverse as salmon from Norway, strawberries from California, flowers from Ecuador, meat from Australia, mangoes from the Indian subcontinent, wine and cheese from France – across its global network of over 150 destinations. Recently, with its suite of products under SkyFresh, the carrier has gone into overdrive to get a bigger bite of the perishables cake. The SkyFresh suite includes fast movement to the plane as well as the use of thermal blankets for protection of fruits and vegetables.For the highly temperature-sensitive perishables like flowers and fish, SkyFresh uses prioritized ground handling and the use of ventilated cool dollies. However, topping the SkyFresh list are temperature-controlled containers for perishables that have to be kept at one temperature no matter what.
Center of Excellence for Independent Validators
While the huge market potential has prompted carriers to fashion out a large range of cool chain options for transport of time- and temperature-sensitive shipments, there has been a concerted push by airports and freight forwarders among others to gain the CEIV badge. This is especially true in pharma exporting countries like India that accounts for 20 per cent of global exports in terms of volume of generic drugs and supplies more than 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome).
One of the latest to get the CEIV stamp was India’s Mumbai International Airport (MIAL). The partnership between Brussels Airport (BRU) and MIAL saw the launch of the Pharma.Aero initiative, that is focused on improving pharma handling and quality in the air cargo industry. With that, the Mumbai airport became the first airport in India to embark on a community approach for the IATA CEIV (Centre of Excellence for Independent Validators) Pharma certification. The move has enhanced MIAL’s handling standards and capability for temperature-sensitive pharma cargo.
On joining the Pharma.Aero initiative, Manoj Singh, Senior Vice President and Head of Cargo, Mumbai International Airport said that it was something very different from any other association. “We believe this will really add value, quality and safety standards in the entire pharma industry. This focused product management will grow by leaps and bounds and the airports are going to be informed through shippers about the quality they demand. This will open communication channels among stakeholders of pharma supply chain.”
Singh pointed out that a high quality supply chain for pharmaceutical and healthcare products was vital in air freight transport. “Earning the CEIV Pharma certification will therefore serve to validate our commitment to providing the same to our stakeholders,” he said.
Transparent Collaborations
Other than the CEIV Pharma certification, air cargo cold chain stakeholders have, highlighted the need for collaboration that would be able to counter the increasing competition from surface transportation. The idea is that joint solutions would bring in seamless connectivity and visibility all along the supply chain.
This was evident at Air Cargo Africa 2017, where freight forwarders and representatives from pharma giants like Teva, Sandoz and Ranbaxy spoke at length about the weakest link they found in the transportation of pharmaceuticals by air: the lack of end-to-end visibility.
It is to bring in more visibility that the pharma industry primarily, as well as those responsible for maintaining the cold chain have gone in for the CEIV certification. Also, chipping in is the World Trade Organization’s Trade Facilitation Agreement that has planned to smoothen Customs operations around the world through digitization by reducing the number of documents needed for imports from and exports to developing countries.
Equal partners in the collaborative effort are carriers. Swiss WorldCargo, for instance, set up the ‘pharma corridor’ between Zurich and Singapore in partnership with Cargologic and SATS. A similar partnership was seen when Luxembourg airport operator Lux-Airport and Eastern Air Logistics, which carries out handling duties at Shanghai’s Pudong and Hongqiao airports, tied up to ensure smooth pharma traffic between Europe and China.
For perishables too, there are similar collaborations. In the flower industry, for example, Amsterdam Schiphol Airport – in addition to its initiative for pharmaceuticals — and Air France KLM Martinair Cargo joined hands with Royal Flora Holland to ensure that Holland maintains its position as the top flower hub in the world through the Holland Flower Alliance. The tie up would encourage research to improve the cold chain for flowers and create a system to plan shipments and keep track of the supply chain.
There is no doubt cold chains have become global and the future can only see growth. But amidst the growth, the air cargo sector has to be aware of consumer demands from one end of the world for high-end products – Kobe beef, for instance – to travel to the other end and still maintain freshness and quality. On one hand, then, is the growing demand for fresh food and on the other there is the need for innovation to counter infrastructure constraints. Both factors have to be kept in mind without ramping up inventory or incurring costs. For pharmaceuticals, there are more factors that have to be kept in mind and these include compliances with each country’s regulations.
The cold chain scenario in air cargo has been going through major changes – and all for the better. More changes will be witnessed in the coming years with airports, carriers and the whole supply chain bringing in innovation. So while the air cargo cold chain stakeholders battle it out, the winner will always be the common consumer: you and me.
The rapid decline in the market share of the carriage of pharmaceutical products led IATA to act. Thus was born the Center of Excellence for Independent Validators in Pharmaceutical Logistics (CEIV Pharma) in 2014. A network of certified pharmaceutical trade lanes that meet consistent standards and assure product integrity, CEIV Pharma complies with pharmaceutical manufacturers’ requirements and is a globally consistent, recognised and standardised certification for pharma shipments in air freight. The programme trains and conducts consistent assessments and validations of organisations against standards and regulations (such as IATA Temperature Control Regulations Manual, National GDPs, WHO). It provides the expertise needed to adequately transport temperature controlled pharmaceutical products across the world and it provides visibility to these organisations that meet the standards as they are registered in the IATA CEIV Pharma “Independent Validator’s Bulletin Board”
IATA pointed out that from the very beginning of the programme, the way forward was very clear: to enhance industry partnership by developing global certified trade lanes with participants certified at origin, destination and in transit. To meet the objective, facilities, processes, and training of personnel had to be available on a global scale in a consistent manner. The move has, in turn, instilled trust and more confidence to pharmaceutical manufacturer that their sensitive healthcare products would be handled and transported in impeccable conditions.
