From logistics lessons learned, how pharma can navigate new opportunities surfacing in ocean shipping.
Day three of LogiPharma Europe kicked off with a panel discussion, “Embracing the Sea Freight Opportunity: How Can You Overcome Recent Disruption Challenges to Drive Cost-Reduction, Reliability and Sustainability?” It featured Claus Aagaard,VP, head of global reefer management with DB Schenker, as moderator; Richard Farquharson, VP, global logistics, AstraZeneca; Matthew Roberts, VP, global head, supply chain logistics and distribution, GE Healthcare; and Stephen Mitchell, quality and compliance manager, GSK. The discussion spanned multiple focus points.
In starting the session, participating companies shared their goals for sustainability. They were all in agreement in terms of interest in wanting to commit to the cause, a similar sentiment that other pharma businesses expressed in a previous panel. With the healthcare sector being responsible for over 4% of global carbon dioxide emissions, Farquharson expressed that the industry needs to take a bold approach in further considering sea freight. By 2030, AstraZeneca aims to become carbon negative for all residual emissions, while also cutting its entire value chain footprint in half. GSK is beginning to shift more of its volume to sea, especially amid the combination of wanting to support patients and meet certain stakeholder expectations.
Air freight vs. ocean freight
In Mitchell’s opinion, sea transport is of great benefit to the pharma industry, because temperature regulation is not as much of an issue; containers remain closed while traveling through inspection, however, companies run the risk of these being held up in ports due to global disruptions, such as what occurred in the Suez Canal. At the same time, he acknowledged that sea freight may carry a high volume of product, but not necessarily product that is “high value,” so to speak.
For efficiency purposes, the concept of co-loading pallets is promising, but would require partnership arrangements. Farquharson recommended limiting these agreements to a few trusted relationships. The question that may rise, added Mitchell is, who will be willing to collaborate? Doing so requires effort and risk-sharing.
Level of risk
Of course, with opportunity comes risk, but Roberts suggested that individual parties “challenge the norms” by having a balanced scorecard that features service, quality, and cost measures. Farquharson—who commented that AstraZeneca is looking to potentially ship biologics by sea at some point—also noted that the financial risk in using containers for these purposes should be further explored by qualifying and validating sea containers, specifically, for safety.