Article by Cathy Morrow Roberson from Transport Intelligence - Published on October 16th 2013
The global airfreight market is showing some signs of improvement as it focus more on high-value commodities such as those found in the life sciences industry. According to Evaluate, a life sciences market research company, biologic sales are forecasted to grow 6% per year to $208bn by 2017 and will comprise 23% of the global pharmaceutical market in dollar terms. In 2012, the FDA approved 15 new biological products all of which require cold-chain handling and storage.
FedEx Express’ recent announcement of the construction of a new temperature-controlled facility at its world hub in Memphis, Tennessee, follows a trend of other entities opening such facilities.
FedEx Express’ anticipated 88,000 sq. ft. facility will have temperature-controlled rooms for -25° C to -10° C, 2° C to 8° C and 15° C to 25° C. It will also have flexible walls that allow for better control over temperatures and monitoring of such as well as to segregation of commodities for CO2 and humidity.
The facility is scheduled for completion in 2014 and will be compliant with the European Union’s Transported Asset Protection Association requirements.
IAG Cargo recently opened a dedicated temperature-controlled facility at London’s Heathrow International Airport while Amsterdam’s Schiphol International Airport looks to position itself as a major European hub for pharmaceuticals.
However, airports and air cargo providers face competition as more and more pharmaceutical manufacturers chose ocean freight to move goods. Indeed, as more pharmaceutical patents expire and the growth of generics increases, the costs of air transport may be prohibitive due to the cost structure of generics. Also, there are questions concerning proper handling and monitoring of such specialized cargo.
The attributes of ocean versus air transportation will likely be debated for some time to come particularly until there are accepted global standards for such specialized transportation. Regardless of mode, shippers need to do their homework when in search of transportation partners – not all are created equal.
Just as transportation providers vary, so too for types of pharmaceutical products. True generics may bode well for ocean transport; however, some branded pharmaceuticals will need to continue to be transported by air due to their high-value and the variability of time needed to get these items to market. As such, freight forwarders, airfreight providers and airports are investing in services and facilities to attract this growing market.