Pharma firms crack down on fortunes wasted from shipping air

Peer collaborations for medicine shipments are one of the top three packaging priorities for practitioners transporting temperature sensitive drugs, according to our recent research.  This focus grew in prominence in comparison to the year prior.

What are peer shipments?

Where two manufacturers share pallets/containers to transport medicines/goods to minimize the money wasted on vacant space due to packaging size constraints.

A tougher playing field

More than ever before, regulators expect high controls on pharmaceuticals in transit. Effectively, this boosts market spend on transportation and packaging.

Industry experts have noted an increased scrutiny on shipping to label claim, especially with CRT products. This forces shippers to utilize packaging where they may not have previously or upgrade to more robust models to ship to tighter temperature requirements.

Payload Limitations

Some containers can lack payload size options, which prevent shippers from using its full capacity in lanes  even though they have paid for it.

In his experience Jerry Ferracamo, Product Development Manager for Inmark has seen some companies issuing a significant number of shipments using less than 50% of the available payload space.

Strategies  

It may be beneficial to consolidate shipments where possible. In a case study documented by McKinsey ,  after examining its historical transport data a large pharma firm discovered:

The majority of its shipments weighed less than five kilos and these cost around six times as much per kilogram as larger shipments.

Metrics such as cost per vial and container utilization rates can help identify areas for improvement when comparing shipments.

Shippers should attempt to minimize surcharges while analyzing freight contracts and where possible challenge rates from freight forwarders.

Industry response to peer shipments

Industry meetings have been floating the idea of manufacturers collaborating to share pallets. Even though experts have noted there is a growing acceptance of the strategy, the market lacks tangible case studies of peer shipments working in action.

In a previous article, Frank Binder VP Global Supply Chain Santen Pharmaceuticals Co.Ltd thought this collaboration strategy has a lot of potential.

“We should be able to work together, if we are using the same lanes, to combine our shipments and achieve a higher level of efficiency.

“Often you will find that manufacturing plants are somehow located in clusters and if you look at different companies that there are a lot of common shipping lanes.

“So this [method] has huge potential and it doesn’t even involve any technical change to the shipment itself. It’s just in the forefront, finding the right partners and collaborating to coordinate shipments, which has become much easier now that everything is handled digitally.”

With the help of a 3PL, the logistics of peer shipments could be smoothed to facilitate the needs of the shipment’s manufacturers. For example, ensuring medicines have similar, if not the same, stability profiles regarding storage conditions.

In the search to reduce costs weighing on pharma’s bottom line, innovative strategies such as peer shipments could unlock savings that can be repurposed to fund