By John W. McCurry
Projected cool chain cargo demands are spurring new investment in airport facilities equipped with the latest technology to keep pharmaceuticals and other perishables at their proper temperatures. One of the more elaborate expansions is in Luxembourg where LuxairCargo has opened a €4 million (US$5.3 million) Pharma & Healthcare Centre.
The project was launched following a recommendation from freight forwarder Panalpina, who saw an opportunity to drive increased pharmaceutical cargo through Luxembourg.
“We think there will be increased traffic,” Patrick Silverio, manager special services for LuxairCargo, says. “Our customers are very interested in temperature control. Within this facility we have 70 temperature-controlled rack areas where we can store complete aircraft pallets. It has lots of advantages.”
The 3,000-square-meter (32,292-square-feet) facility was built within LuxairCargo’s existing Cargo Center and is compliant with 2013 Good Distribution Practice requirements. It offers two separate temperature-controlled areas. An area of 1,600 sq. meters (17,222 sq. feet) with a storage capacity of 1,270 pallets (Euro pallets) is dedicated to cargo that has to be kept at controlled room temperature between 15°C and 25°C (59°F and 77°F), while 818 sq. meters (8,805 sq. feet) with a storage capacity of 350 pallets is dedicated to cargo that needs to be kept at a temperature between 2°C and 8°C (35.6°F to 46.4°F).
Silverio says LuxairCargo made the investment with pharmaceutical industry growth in mind. The company believes the facility will handle between 25 and 30,000 tonnes annually with the pharmaceutical business expected to grow 7 to 12 percent per year. He says industry reaction to the new facility has been positive, and some have described it as a “masterpiece.”
In the past four years, Panalpina has experienced major growth in temperature-controlled airfreight shipments. In 2012, the number of handled files, volumes and gross profit in health care all grew by more than 20 percent. Health care shipments made up 9 percent of Panalpina’s airfreight tonnage in 2012, compared to 7 percent the year before.
“Having a purpose-built facility makes it easier to keep our customers’ products within the required temperature ranges during off-loading all the way through to build-up and storage of built units,” Helmuth Scholz, head of Panalpina’s gateway in Luxembourg, says.
Another company seeing considerable pharmaceutical growth is IAG Cargo, which broke ground in July on the site of its new, dedicated Constant Climate Centre at its London Heathrow hub. Due for completion in September, it will provide dedicated storage and handling for IAG Cargo’s Passive and Active Constant Climate products and will include two temperature controlled zones – the first maintained at 2-8˚C (35.6-46.4°F) and the second maintained at 15-25˚C (59-77°F). Once completed, the center will be able to accommodate 28 intact pallet positions or 56 AKE positions at any one time. This will increase IAG Cargo’s capacity at London Heathrow.
Ethiopian Airlines opened its new cold storage facility in Addis Ababa, Ethiopia in March. The warehouse has a receiving, skid storage, palatalization and ULD storage area of 3,500 sq. meters (37,674 sq. feet). It has a controlled temperature facility ranging from 2-4˚C (35.6-39.2˚F). Ethiopian is targeting the perishables market and horticultural products in particular.
Sweden-based cool chain product specialist Envirotainer primarily serves the pharmaceutical sector. That industry’s development has kept the company growing at a nice clip.
“We are well ahead of last year, but it’s not really going according to our ambitions and plans,” Gustaf Ljunggren, Envirotainer’s CEO, says. “Overall, business is good and we expect growth to continue over the next five years, but there are absolutely some challenges we need to address in one way or another.”
Among those challenges is the ongoing modal shift to oceanfreight, which is affecting the entire airfreight sector.
“Pharma companies are looking for a simpler, cheaper solution for products that can be treated in that way, by going by sea,” Ljunggren says, adding that cost awareness is the biggest trend in the industry. “Our customers are making sure they are adding value to what they do. That doesn’t always mean the cheapest solution since we are the premium product.”
Environtainer’s R&D program is two-pronged with products and surrounding services offered before, during and after shipment being developed in parallel.
“We always start in the marketplace, listening to our customers and our airline, forwarder and integrator partners,” Ljunggren says. “We want to understand their needs and get their insight and find out how do they look into their crystal ball. We want to know their marketing requirements and their specifications. Then we start the whole R&D process.”
Envirotainer, which employs about 150 people, assembles all of its containers in Sweden. Ljunggren expects the company’s staff to grow along with its business.
“Our ambition is to lead the market,” Ljunggren says. “We want to be very much in the forefront in developing products and solutions. Growth for us is coming from a few different angles. One is our current customers and markets where we see underlying growth in the pharmaceutical industry. We will grow together with our customers.”
Growth will also come as Environtainer follows its customers into new markets. And there’s always the potential for growth via acquisitions, Ljunggren says.
“There could be other industries that would request our solutions for tomorrow,” he says. “We have some other perishables, some fine food, high-tech products and we will continue to look to see what is manageable. The challenge is what kind of solutions they need and are they prepared to pay for it. We haven’t closed the door on new markets, but we are fully occupied with the pharmaceutical market.”
Brown broadens European scope
By Adina Solomon
UPS is keeping a sharp focus on the cool chain.
Now the delivery giant has acquired a Hungary-based health care logistics company in its continuing push into the sector.
The deal closed in July for the acquisition of CEMELOG. With this company now in its network, UPS covers Central and Eastern Europe better than before, Dirk Van Peteghem, vice president of health care logistics, said.
“It’s not about just Hungary. Actually, it’s not even just about Europe,” Van Peteghem said. “It’s about a global network for our customers that they can all be served on basically one global integrated platform, an integrated network of facilities and products.”
He said CEMELOG was a good fit for UPS’s growing network. Ivette Lopez, UPS spokeswoman, says CEMELOG was already set up to distribute across the region, not just Hungary.
“One of the things that CEMELOG was really good at doing is we felt like they were innovators in the field,” Lopez explained.
UPS now has 42 health care facilities worldwide, with the latest in Durham, N.C.
The company is also receiving attention in other areas of cool chain logistics. UPS launched Proactive Response Secure, an insurance and risk management service for temperature- and time-sensitive package delivery. It covers products up to the selling price when unexpected events happen and expedited shipping services.
The program first underwent a six-month pilot phase with a handful of companies and is now offered in the U.S. and outbound to Europe.
Van Peteghem said people in control towers monitor packages 24/7, intervening if anything out of the ordinary occurs.
So far, the service is a success, he said.
“Basically we’re saying even in case that let’s say a weather delay happens – can’t really do too much about that – but we can insure you up to the full retail value of your product so you can really rest assured that your product is secure and if anything unavoidable were to happen, then you’re insured,” Van Peteghem said.