Pharmaceuticals Reefer LCL Service

July 10, 2020 Gubba Group

Pharmaceuticals Reefer LCL Service

The global pharmaceutical logistics market was valued at $ 69 billion in 2019 and expected to rise to $ 118.9 billion by 2027 (CAGR of 7.3% from 2020 to 2027). It is amongst the most regulated and expensive cargo businesses in the world today. Governments and other bodies tasked with the procurement of treatments and therapies are all pressuring pharmaceutical manufacturers to reduce costs yet toughening transport regulations are driving costs up.
The transportation of pharmaceuticals accounts for approximately 0.1% of the global ocean container volume so is extremely niche. However, pharmaceuticals are not prone to the effects of recession and are much less price-sensitive than other commodities. Therefore, whilst they present many challenges for the shipping lines, they offer significant rewards if shipped correctly.
Pharmaceuticals have traditionally moved by airfreight but the price reductions described above, as well as the impact of generic substitution and biosimilar products, mean that a considerable number of products can no longer sustain airfreight transportation costs so alternatives are being considered.
While considering this new initiative many questions on the basis of the feedback from the industry were considered and discussed during the webinar organized by Mr. Gubba Kiran of Gubba Pharma Cold Storage under topic “ LCL Reefer consolidation, a new change in pharma movement” which was moderated by Mr. Satish Lakkaraju from Agility Logistics and presented by Mr. Rituparna Chaturvedi from Agility Logistics, Mr. Ravi Tummalapalli from Teva Pharmaceuticals, Mr. Kamal Jain from Cargomen Logistics, Mr. Ahmed Shaik from Ocean Network Express.
Is there need for Pharmaceutical Reefer LCL Service?
Pharmaceutical Industry particularly Generic Products are facing lot of cost pressure because of the stiff competition, quality & complaint procedures, thus considering all this there is needs for alternate cost effective shipping solution
What is the potential market for the Pharmaceutical Reefer LCL service?
Pharmaceuticals Reefer aims at non-urgent airfreight shipments and provides solution for partially stuffed 40’ RF containers.
How does the Pharmaceutical Reefer LCL mitigate the risk of cross contamination?
Pharmaceutical reefer LCL consolidation provides selective pharma commodities and restricted to only finished formulation for products requires +15 to +25Deg Cel. The service does not mix DG/HAZ, API, and Control Substances that may have risk of cross contamination.
What are the possible challenges from the Pharmaceuticals manufacturer point of view to ship products using RF LCL?
Temp Excursions, cross contamination, Cargo Hygiene, Damage due to multiple handling
How do we control Pharma compliant origin & destination handling?
Route risk assessment are implemented mapping the possible risk of temperature excursion, damages defining the risk severity (low, medium, high) and implementing the risk mitigation measures to ensure product integrity in maintained from door to door.
Considering Pharmaceuticals are highly regulated products thus what type of consolidation / deconsolidation facilities are considered?
 Both consolidation & deconsolidation facilities needs to thoroughly audited basis the GDP guidelines before we finalized. Preferably both facilities needs to be GDP Certified
How does the Reefer LCL service ensure the capping of the high value cargo, considering multiple shipments in one container?
Pharma Reefer LCL contracts with shipping lines allows to send high value cargo with certain premium for more than $>500,000 total value of the containers.
Having initiated Reefer LCL project considering a move for non-urgent air to sea for a major generics manufacturers, it is a challenge for new way of moving pharmaceuticals. Our initiative aims to understand the challenges, which each party faces and see what could be done to overcome these. Our recommendations consider that the manufacturer and its logistics partner should undertake shipping lane risk assessments, based on the process maps, where all the known factors can be taken into account and appropriate risk mitigation measures put in place, commensurate with the product quality requirements. This approach can resolve the sometimes-conflicting expectations of manufacturer logistics and quality stakeholder groups and should provide a quality and cost-efficient solution.

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