Pharmaceuticals and the Air logistics
cool chain seminar
Managing emerging markets
by
Radharamanan Panicker
Managing Emerging Markets- India
Some statistics of pharmaceutical and healthcare trade
Geographical spread of India and airport linkages to
production sites
Main Challenges in the supply chain in Indian Markets
Overcoming the challenges of imperfect supply-chain
infrastructure challenges
Improvements that could be made?
Summary
Industry Overview
3.1844.159
5.079 5.191
6.676
8.483
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
646 701925
10981205
1685
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Parma exports are expected to continue their momentum of
growth driven by patent cliff, and increasing focus in generics
both in developed and developing world.
Imports are growing, but choice of air cargo service provider is
determined by supplier vendor or regional offices of importing
MNCs
Source: Department of Commerce – Export import Data Bank
Value of Exports Logistics Spend
Sea
Air
Though value of exports by air is less, but the logistics spend
on air cargo is about two third of total logistics spend.
USA, 21
Europe, 22
As ia, 18
Africa, 14
Middle
East, 9
Latam, 8
CIS, 7
USA and Europe form 40-45% of the total pharma export
market.
Pharmaceutical product exports (USD mn) Pharmaceutical product imports (USD mn)
Mode of Cargo- % breakup (2009) Exporting countries - % break up
The Indian Pharmaceutical Market has witnessed healthy growth…..
Industry Overview
5.1
6.9
9.310.6
12.5
14.5
2011 2012 2013 2014 2015 2016
• The Indian exports market
is expected to grow at a
CAGR of 14-16% and
expected to reach USD
14bn by 2016
• Market share to increase
to 3.4% by 2017; it is one
of the largest exporter by
volume:
• By 2009, India had
become the largest
formulation exporter by
volume
Market
Size
Share in
generics
market
55% of the current Indian exports are
to regulated markets, US is the largest
market with 26% of exports
2.1% 2.5% 3.0% 3.2% 3.3% 3.4%
India the Country
• Tropical country
– Temperature in most
part remains around 35
to 45 C for most of the
year
– Delhi and Ahmedabad
experiences lower
temperature to 2C in
winters
• Road infrastructure well
developed connecting
four metros- Delhi (North)
Mumbai (west), Chennai
(South) and Kolkota
(east)
• Rest from good to bad
39/20 C
41/21 C
42/28 C
41/25 C
40/27 C
34/29 C
39/29 C
38/29 C 34/31 C
Pharma production area and gateway airport
• Five distinct regions circled in
the map
• Gateway airports shown
below
Production area Gateway airport
Hyderabad Hyderabad
Mumbai Mumbai
Nashik /Pune Mumbai – 250 km
Hyderabad- 750 km
Goa Mumbai – 500 km
Ahmedabad Mumbai-500 km
Delhi- 800 km
Indore/Bhopal Mumbai- 660km
Delhi- 560km
Chandigarh/Baddi Delhi- 200 km
Mumbai- 1400 km
Challenges in Supply Chain
50% of Top selling drugs by 2016 (USD100bn) expected
to require cold supply chain
15% of pharma product are only shipped through cold chain
(globally 25%)
Traceability
Most of the time, cargo traceability is impossible from the moment
of handover to freight forwarder
Airports, especially are zero-information zones
Integrity/ Quality/Processes
Pilferage
Damage due to handling, reducing product efficacy
Unsatisfactory quality of reefer vehicles, airport terminals etc
Processes are not aligned with requirements of the Pharma cos
esp. w-r-t customs formalities [inspection]
Challenges in Supply Chain
Transportation
High deviation from required temperature inside transport vehicle
Vehicle switched off several times during transport
Rough handling when loaded into vehicle
Handling
Rough handling when coming into contact with any party, which
causes product damage
Storage
Frequent excursions as shipment moves from one area to another
Not always stored as mentioned on the AWB
The Air Logistics Chain
AIRPORT AREA
Shipper
Forwarders
Ground
handlers
Ground
handlers
Trucker Forwarder CHA’s
Cargo handlers
Cargo handlers
Truckers Consignees
Regulatory
Agencies
Regulatory
Agencies
Air Cargo Supply Chain
Cargo Terminal – a Black Box
Shippers
Freight
Forwarders
Warehouse
AIRPORT TERMINAL Customs Documentation & Examination
Cargo Acceptance check (Weight/Volume)
Security Checks (X-ray Screening/
Physical Check)
Palletization
Consignee
Final
Destination
Distribution
Centre
Air
Transportat
ion
Road
Transportation
Road
Transportation
Transportation
to Aircraft
Overcoming Supply Chain constraints
Almost all key airports dealing with Pharma have
temperature controlled Perishable Cargo terminal
1500 to 2500 sq.met facility for multi product handling
Common temperature from acceptance to built up area-
18 to 22C
Varying temperature for ULD storage from (-)10 to 12 C
Custom facility available currently 12 hours – to be
extended to 24 x 7
However no Reefer dolly for inside airport movement of
ULD from terminal to aircraft
Layout of Perishable Cargo Terminal, Mumbai
X-RAY M/c
Temperature control No control
CSC Project- CPC Mumbai
Perishable Cargo facility- Delhi
Temperature
Zone ULD/Pallet
Capacity Annual
Capacity EXIM Cargo
12 to 18 deg Celsius 250 Euro pallets*
35,000 MT
PTSP Export – Pharma /
F&V
2 to 4 deg Celsius 9 ULDs PTSP Export – Pharma /
F&V
2 to 12 deg Celsius 9 ULDs PTSP Export – Non-
Pharma
Import Cargo Facility capacity
Export Cargo Facility capacity
Temperature Zone Pallet Capacity Annual Capacity
12 – 18 deg. Celsius 100 Euro pallets
15,000 MT
-20 to -2 deg Celsius 3,000 MT
What more to be done
Clear understanding about the need to move the product in
temperature controlled supply chain
Temperature controlled facility at airport
Origin
Destination
Ability of airlines to ensure required temperature control
Ensure that Shipper use the Time & Temp label with clear
instructions
Check Dry ice quantity is declared on AWB & requirement
to replenish it at transit point or departure airport
Need to input required handling temperature on AWB.
What more to be done
Capability at airports to accept such shipment in
temperature controlled environment
Perishable Cargo terminal at airports
Exclusive Pharma Zone vs Multiproduct facility
Ability to pay for exclusive facility?
Availability of thermal blanket for covering ULDs
Refrigerated ULD dollies – cost and real need
Why not Refrigerated ULD itself
Multiple stacking versus Single stacking
The reality
Maximization of airport space a requirement
What more to be done
Training
Human resource training is the
critical missing link
Training commensurate with
responsibilities of the personnel
Product training
Hazardous goods training
IATA DGR
IATA Perishable cargo regulation
Pharma handling
Summarizing
Maintaining Pharma Cool supply Chain is a collaborative team
effort by Shippers, forwarders, transporters, airlines and cargo
ground handlers
Kerala boat race