Ben Singleton has worked for Peli BioThermal for over 14 years and is responsible for Managing the Sales Team in the EMEA region. Ben explores the lasting effect of the pandemic on supply chains and pharmaceutical logistics.
Ben Singleton
The fallout of the pandemic has had a lasting effect in the sector and continues to impact supply chains and pharma logistics. While the war in Ukraine and carbon dioxide shortages are also taking their toll, the industry is seeing a shift within the transportation of pharma payloads with the latest developments seeing a greater focus on sustainability and outsourcing of cold chain operations.
Industry Changes and Challenges
Recent research revealed that rising transport cost is the primary temperature control challenge facing businesses today.
A sector survey provided industry insight into key concerns and issues which were collated to help logistics businesses consider the challenges they face and how they can respond to them in the coming years with survey respondents representing 26 countries from all regions from a broad range of businesses across the logistics sector.
The report, compiled by Peli BioThermal, presented key findings including that rising transport costs is the primary temperature control challenge facing organisations currently with over half (58%) of respondents reporting being affected in some way. Other key challenges highlighted included capacity shortages and disruption to supply chains, reflecting the ongoing effects of geopolitical events such as the pandemic and the war in Ukraine.
Around a third of respondents examined changing their transportation routes in some way to mitigate costs and 33% of businesses surveyed had made cuts within organisations via their choice of transport providers (39%) and packaging choices (30%) suggesting increased competition for labour and among transport and packaging partners in each of these spaces. The key three considerations when selecting a transport company partner within the supply chain were cited as speed of service, cost and the tracking/monitoring of cargo.
The War in Ukraine
Tensions between Russia and Ukraine escalated in 2022 as Russia launched a full invasion of Ukraine. In an effort to stifle the Russian economy and ultimately end the war, the world began to impose sanctions on Russian imports and exports.
The impact for the pharma industry is the likelihood of seeing increases in the cost of plastics used in syringes, bottles as well as packaging materials. This is partly due to the coal and crude oil imported from Russia, but also due to increasing oil and gas prices in countries that do not rely on Russian oil.
Clinical trials have also been impacted by the war in Ukraine. Russia is one of the most ethnically diverse countries in the world, and genetic diversity is key to clinical trials to test side effects in different populations. When the war began, Russia was largely lost as a clinical trial location resulting in clinical trials organisations focusing on how to achieve the need for genetic diversity in other ways, including deepening relationships with countries that offer comparable genetic diversity.
Carbon Dioxide Shortage
Intertwined with the war in Ukraine and inflation across the globe is an ongoing carbon dioxide (CO2) shortage, with the UK hardest hit since it relies heavily on energy imports.
Dry ice/frozen CO2 is used in temperature-controlled packaging to keep pharmaceutical products and other temperature-sensitive consumables safe during transit. No other comparable cooling source exists for transit at its super-frozen temperature of approximately -75 degrees Celsius.
Current phase change material does not hold temperatures that cold predictably enough. Liquid nitrogen, on the other hand, is expensive, more dangerous to handle and too cold to replace dry ice. Yet the volatile nature of CO2 prices requires innovation in cooling sources for temperature-controlled packaging.
Sustainability
The focus on sustainability across all sectors continues to gain momentum. The journey of transition towards reusable cold chain systems is increasing, in both the parcel and bulk container business.
Pharmaceutical companies continue to dig deeper into the carbon footprint of their suppliers and standardisation of how information is reported is an increasing focus as ratings organisations, such as EcoVadis, gain greater ground. Additionally suppliers like Peli BioThermal continue to drive for more sustainable packaging and manufacturing practices.
Increasingly companies, aiming to achieve sustainability goals in the sector, are focusing on return logistics as part of their overall sustainability initiatives, which is leading to a growing trend to better optimise the return of containers.
When shipping high value clinical trial payloads or pharmaceutical products, the economic justifications for reusability are good. However, when shipping lower value and lower margin commercial products, the economic balance can be a more challenging cost consideration especially within the scope of one party’s cost and benefit analysis, without taking account of the full supply chain and associated environmental external costs.
Companies therefore are looking at how they can deploy their cold chain systems more efficiently and help reduce their costs and carbon footprint in the process. Utilising reusable containers requires working with logistics providers, in order to achieve good return logistics economics, alongside collaborating with specialist cold chain packaging suppliers providing the systems being deployed.
The market is seeing a rise in the requirement for cold chain solutions which are optimised for higher frequency use, optimised to fit payloads more precisely, to reduce the shipping of dead space and which are easier to service with an extended life of use. This is driving activity within the market resulting in the development of new formats of containers to better meet those changing requirements.
Although reusable shippers can require a higher upfront cost at the point of the design and development process, on an ongoing reusable basis, these systems can reduce waste materials significantly and their improved performance in the longer term is a clear cost saving and a benefit to the environment.
Outsourcing the Cold Chain
The industry is seeing an overall rise in the outsourcing of cold chain operations from the pharmaceutical or clinical company to logistics partners often combined with a desire to step into deploying reusable passive packaging simultaneously. These solutions become a pay per use or rental service often available on a JIT basis within the scope of a term agreement.
These passive reusable systems are no longer a purchase but are part of a monthly rental agreement fee or deployed on a pay per journey agreement. These options negate the need to purchase, manage or maintain a large fleet of products for an individual program or clinical company.
The growing trend to contract out the entire activity of cold chain is leading to the management of a fleet of packaging systems and the logistics including returns management becoming part of one service provision. These one-service contracts are held by either a logistics provider, with support of a passive packaging manufacturer or being led by the passive packaging company itself, in conjunction with the chosen logistics provider of the end client.
The ownership and responsibility for temperature management decisions are moving from the pharmacy companies to the packaging and transport providers who collaborate together, although audit approval for good practice cold chain custody compliance still ultimately sits with the pharmaceutical companies.
As part of the logistics cycle, it is critical that the return logistics process is well managed. There is a clear opportunity for logistics providers to supply solid outbound cold chain shipping with highly reliable and effective return programs, so that systems can be recycled, refurbished and put back into the market in a workable, good condition over extended periods of time.
This has resulted in the market seeing a rise in the use of passive bulk and parcel containers, which are available for short term lease and rent. To meet this demand the availability and the global network density is improving year on year.
Peli BioThermal has been on that journey for several years during which the company has established its extensive, credible global network of service centres that can both receive and issue containers to meet customers’ needs globally.
In response to the increasing market demand Peli BioThermal offers two, highly customisable programs. Crēdo on Demand, a short-term rental program and Crēdo on Reserve, a flexible, longer-term program, usually for periods of two years or more. Both programs are supported by a comprehensive global network, offering easy implementation, the ability to monitor outbound shipment, return receipt, inspection and refurbishment.
Product and Temperature Requirement Developments
In response to the fluctuating requirements in the market Peli BioThermal recently launched its reusable, flexible temperature controlled shipping solution, Crēdo Go which is designed to adapt to unique customer programs, as well as to help pharmaceutical companies reach environmental, social and governance goals, cost reduction targets and operational performance indicators. The product development and the flexibility it provides has been led by market demand.
The company’s latest shipping solution combines customer collaboration and data-driven optimisation to propose a portfolio of shipper options that meet unique business and program requirements. Each shipper is supplied with 2-, 4- or 6-TIC configurations to dial thermal duration up or down and switch between open and tight temperature control to meet typical and complex shipping lane profiles.
Crēdo Go reusable shippers accommodate payload sizes from 2.5 litres to 83 litres and temperature ranges from frozen to controlled room temperature and shipping durations span 24 - 120+ hours.