Preparing for Peak Season with Temperature-controlled Containers
Those who work in logistics will know all about “peak” or “peak season.” It’s the time of year when demand for logistics capacity reaches a yearly high in preparation for the festive period between Black Friday and Christmas.
Niklas Adamsson
The sheer volume of demand on all types of global logistics is huge. And the ripples it creates affect every single supply chain around the globe. Especially those dealing with items that simply cannot be delayed—such as life-saving medical treatments.
Getting them into the hands of patients and practitioners can be a life-or-death situation. Furthermore, the explosion in use of temperature-sensitive biopharmaceuticals requires a robust cold chain that simply cannot fail in the face of peak. As a result, planning needs to start now.
Why is peak 2022 going to be tougher?
Every year, we’re warned the next peak will be even bigger. And every year, it’s proven right. Just as the economy keeps growing, peak keeps getting higher as more goods flow through all parts of the global supply chain—air, sea and truck.
You might be forgiven for thinking global GDP had stalled, but it grew to $94,935 billion in 2021, up from $87,390 billion in 20191—despite the pandemic. 2022 isn’t going to be any different with GDP forecast to be $102,404 billion—another rise, although this may be changed by the unrest in Ukraine.2 For now, however, it’s safe to assume demand for logistics will keep going up.
Normally, capacity creeps up to meet demand. But the pandemic has reversed the trend. This has been felt in all areas, with analysts saying disruption and shortages caused by COVID are set to continue well into 2022.
Air freight—a mainstay of cold chain logistics—has been impacted badly and there is now a significant squeeze on space. As lockdowns hit, the traveling public decided not to fly and were often banned from doing so. Yet passenger aircraft accounted for nearly half (47 per cent) of global air freight prior to the pandemic.3
At the start of 2022, global airline capacity fell to 75.7 million seats, which is 27.7 per cent behind the same period in 2019.4 While it’s recovering, and likely to be 50 per cent higher in 2022 than 2021, the impact is clear. There will be less space for cargo than there used to be.
To add a further layer of complexity, shippers that usually use sea routes are opting for air freight. This is because outlooks suggest logjams in ocean shipping. In fact, at the start of the year, average delays on shipping from China to Europe rose to six days.5 This puts even greater pressure on those sectors that usually rely on air freight, such as pharmaceuticals.
What are the challenges for pharmaceutical firms?
While pharmaceutical firms battle to hold onto the air freight capacity they’re used to, they face the added pressure of continuing to deliver the vaccine airlift with 40 per cent of the globe having not received even a single dose.
As if the situation couldn’t get any tougher, there’s another burden they must bear. While 60 per cent of the globe has received at least one vaccine, this is predominantly in developed nations.
The UK, for example, has 77 per cent of its people vaccinated. The US sits at 75 per cent at the time of writing. These, and other western economies, are often the countries where the vaccine is manufactured. While air freight has undoubtedly been used, some of the burden has been taken by road and rail.
Meanwhile, Nigeria has just 6.5 per cent of its nation vaccinated with a single dose.6 There are no manufacturing sites in the country. To get vaccines there, it needs to be flown. This tells us one thing: the hardest part of the airlift is still to come.
Added to this is the ever-growing use of other temperature-sensitive pharmaceuticals and biomedicines, such as insulin for those with diabetes. The prevalence of this shot up from 108 million in 1980 to 422 million in 2014—and is still growing.
What’s more, the traditional peak season will be less focused on the end-of-year crescendo. It will remain at fever pitch throughout 2022 with mini peaks as vaccine surges take place. We saw this in late 2021 when developed nations rushed to introduce boosters in the face of omicron.
To summarize, demand from all shippers is up, but supply chain capacity is limited, and ocean freight is jammed up. So, more shippers are moving to air freight to cope, but air freight capacity is down. Yet pharmaceutical firms need more air capacity than ever to move vaccines and other drugs.
It’s a perfect storm that makes planning for peak—and the bumpy ride as we approach it—crucial. The question is, how do pharmaceutical companies respond to such a tough situation.
What action is needed?
Trying times like this call for innovation. One solution has been ever smarter ways to manage cold-chain logistics, cutting out as much waste as possible with triangular shipping methods. This allows far greater levels of direct delivery, reducing unnecessary trips that could be used to carry consignments.
But this approach on its own isn’t enough. The sector needs to maximize every single cm3 of space in air freight. This calls for highly efficient cold chain packing that can both protect its precious cargo and reduce wasted capacity.
Often, manufacturers pack their products in a “passive” container before being loaded onto a plane. This is a giant cool box with insulation and cool packs, often using dry ice. They’re bulky, inefficient, take up space that could otherwise be used for actual pharmaceuticals and if there’s a delay, will eventually lose their ability to maintain temperature. Therefore, companies have turned to temperature-controlled containers.
These, in contrast, are rechargeable and reusable units that move around the globe in a circular economy, a little like high-tech shipping containers. With an 11-hour charge, some can maintain internal temperatures for over a week.
The main—and significant—benefit of a temperature-controlled container is that it can increase payload. In short, you can squeeze more pharmaceuticals into a plane. Up to 35 per cent more in some cases. When capacity is so limited, this is a crucial factor. It eases the pressure on the system and reduces costs, which have been spiraling. What’s more, the larger the container, the bigger the payload.
They also cut the likelihood of shipments being lost to a temperature deviation. According to an IATA study from 2019, up to 25 per cent of vaccines have been degraded by the time they arrive at their destination.7 This creates huge waste, potentially requiring consignments to be scrapped and new supplies flown out. Temperature-controlled containers can slash this. Just 0.06 per cent of all shipments suffer from temperature excursions.
What to look for in temperature-controlled containers
Once a pharmaceutical company has decided on a temperature-controlled solution, there are a few key factors to keep in mind. Firstly, to maximize payload per container, choose the biggest one on the market. As the dimensions of the box get bigger, the internal payload space increases significantly, without needing additional layers of insulation. The usable space within a large container is therefore more efficient than smaller models.
Secondly, consider the best functionality. As pointed out above, 25 per cent of vaccines have been degraded by the time they arrive at their destination. To minimize this to nearly zero, look for solutions that offer consistent temperature throughout, so no hot or cold spots emerge. This ensures cargo will be protected independent of size, mass or position inside the container. Also consider live data, allowing continuous tracking of a shipment as well as the status of its cargo.
Finally, look for flexibility. This means containers must be as autonomous as possible. If a flight is delayed, or a container ends up sitting on the tarmac at an airport, it requires as much charge as possible to ensure the precious contents remains safe.
It’s also worth remembering that containers themselves can be in limited supply. It’s worth weighing up options and going for suppliers with the largest fleets so there’s always availability—even if that means a mix-and-match approach where diverse types of large containers are made available.
With such high demand for containers, a slightly different approach to purchasing may also be called for. From one driven by procurement departments, to one that builds partnerships. This will create benefits for all parties.
Planning now will pay off in the future
It’s clear that peak— and most of 2022—is going to be challenging for pharmaceutical shippers, forwarders and the air cargo industry. But making slight changes—such as choosing the right packaging—can make it easier. Temperature-controlled containers instantly increase payload. At the moment, there is no other way to achieve such a colossal growth in capacity while improving outcomes and reducing Total Landed Cost (TLC).
Now is the time for the industry to act. Because there are few other options allowing it to live up to the huge expectations upon it. Medicines are needed around the globe—and they must be delivered regardless of the extraordinary pressures all stakeholders face. Planning and partnership can never start too soon.
Niklas Adamsson is Chief Operating Officer at Envirotainer.
References
2. https://www.statista.com/statistics/268750/global-gross-domestic-product-gdp/#:~:text=The%20statistic%20shows%20global%20gross,trillion%20lower%20than%20in%202019
3. https://www.bbc.co.uk/news/business-60131947
4. https://www.oag.com/coronavirus-airline-schedules-data
5. https://www.bbc.co.uk/news/business-60131947
