Freight forwarding and logistics company Panalpina says its customers in the healthcare industry could make significant cost savings in their supply chains by working together, such as by sharing transport space.
For many years, the high value world of healthcare operated a “delivery first, cost later” approach when it came to their supply chain. But since the financial crisis, the industry has different priorities and supply chain solutions are now selected on cost and capacity, alongside quality and innovation.
Stricter legislation and more diverse codes of practice mean that developing new drugs requires more time and money than ever before. Companies are increasing R+D budgets while looking to make savings elsewhere and Panalpina has identified freight forwarding as one area where savings are available to the industry.
“New drugs do not appear with the frequency they used to and more companies are now selling similar products to a wider market and in greater volumes. This increases competition and lowers prices,” says Thomas Berger, global head of industry vertical healthcare at Panalpina.
Supply chain decision-makers from some the world’s largest pharmaceutical companies attended a series of workshops in Miami, Florida, U.S., together with Panalpina staff, and representatives from the International Air Transport Association, air cargo companies and freight consultants. The workshops covered all aspects of the healthcare industry supply chain.
Coopetition
The idea of “coopetition”—competitors working together for common benefit while staying fully compliant—was one of Panalpina’s central messages. For example, for healthcare customers, this could mean sharing transport space that would otherwise be empty.
The participants of the workshop discussed new supply chains and ways of consolidating shipments from multiple companies. They also discussed which products are best to ship together. Many pharmaceutical products need to be transported and stored in temperature controlled environments. In air freight, this generally means shipping products using relatively expensive active cooling solutions, specially-designed containers with built-in refrigeration systems. Consolidating shipments or where possible also switching to passive cooling solutions with thermo covers and blankets can help reduce costs.
Moving to ocean freight
Another potential cost reduction for healthcare companies could be to move more products by sea rather than air, participants found. Ocean freight already accounts for a large proportion of capacity in healthcare, mostly for less fragile and time sensitive products, but air freight accounts for more cost. Identifying product lines that could switch to ocean freight, leaving only the most urgent items and delicate goods for air travel, could present healthcare companies with substantial cost savings.
Continuing this theme, intermodal options (where air, road, rail and ocean freight are combined) is another way of reducing cost while not compromising delivery speeds as much as moving purely to ocean freight does. “Ocean freight doesn’t have to make up the complete journey,” says Berger. “By mixing ocean freight with other forms of transport there are almost unlimited options, it really just depends on the customer’s needs.”
Photo courtesy of Panalpina
