Getting pharmaceuticals back in the air

ceiv-pharmaWill CEIV stem the shift of Pharma shipments from air to ocean?

The Center of Excellence for Independent Validators (CEIV) is the odd, and not particularly informative name for a program launched by IATA in 2013, with the aim of upgrading and standardizing the entire pharmaceutical supply chain  an effort to convince the life science and pharmaceutical industries that shipping their products by air is safe, reliable, and transparent.

The move was driven by media coverage of serious dissatisfaction with the air mode expressed by shippers and forwarders at an air cargo handling conference in Lisbon in 2013. The complaints were many, but the common thread running through them was that shippers and forwarders were turning from air freight to sea freight for pharmaceutical shipments, not because of price, but because the ocean mode was more reliable – because ocean carriers could be trusted to do a better job.

The challenge was laid down in Lisbon by forwarder Kuehne + Nagel, when Senior Vice President Marcel Fujike said: ““We need you, IATA, to spearhead the air cargo GDP standard development. It can only be you, and we are waiting for a long time already – way too long, and I don’t know why it is not happening. My question to IATA and the carriers behind IATA is – are you really willing?”

IATA took up the challenge, but quickly realized that the problem didn’t lie specifically with airlines, but rather with every player in the entire supply chain. Many pharmaceutical shipments are so temperature sensitive, that even the briefest moment of inattention can render them useless, so whatever effort IATA and its member carriers put into ensuring that shipments were perfectly handled while in the air would be wasted if every trucker or ground handler or airport or forwarder involved in the shipment didn’t put forth equal effort.

Which, of course, led to a second problem: How could any player determine which other players were  reliable partners?

IATA’s answer was to work in conjunction with representatives of all links in the supply chain to come up with a set of standards for the handling of pharmaceuticals, and a path that any company could take to gain certification that it had met those standards. To implement the program, IATA created the Center of Excellence for Independent Validators, or CEIV.

Fast forward to 2015, where the first fruits of the program were on display at the CEIV Pharma Workshop on Day 1 of the IATA World Cargo Symposium in Shanghai. Present for a full day of discussion were not just IATA executives, but also executives from some of the first companies to gain CEIV certification, or whose companies were currently going through the certification process, and a room full of those whose companies were wondering whether CEIV certification would be worth the time and effort required to gain it.

The answer to that last question, at least from the truckers, handlers, airports and carriers who have been certified, was pretty much an unqualified “Yes.” In their view, the bottom line was, well, the bottom line. Achieving CEIV certification, they said, had made them more attractive to existing and potential customers

With the exception of Singapore-based handler SATS, CEIV certification has so far been achieved by less than a dozen European companies, all of them are members of the Brussels Airport cool chain community. But a supply chain has two ends, and the big question hanging over the CEIV program is: Can it go global? GDP (Good Distribution Practices) programs exist in a variety of locations around the world, but they are often vague about processes and standards, and often not compatible with one another. Participants in the Workshop all agreed that the real value of the CEIV was that it had the potential to create a single global standard. Something that regulators, shippers, and supply chain participants worldwide could use to determine how best to move time- and temperature-sensitive pharmaceutical shipments from any point on the globe to any other point.

But if it is not embraced globally, if only a small number of players from a few developed regions are willing to undergo the training and certification process, then it’s value is reduced. True, knowing that all the cool chain players at, say, Brussels Airport have been CEIV certified will make it more likely that shippers choose to move their shipments to and from Europe via Brussels, but the ultimate goals of making air freight more attractive to the pharmaceutical and life sciences industries, and ensuring the better health of patients worldwide, will only be met if CEIV is accepted worldwide.

Which brings us finally to the concept of “Pharmerging.” Haven’t heard of pharmerging? No surprise there, because it is a word invented only recently to describe the future of the pharmaceutical industry. Most of the shipments, by value, of pharmaceuticals today are between developed (or almost developed) countries. But demand in the so-called emerging markets is projected to grow so strongly that soon countries in Africa and South America will become major consumers of pharmaceuticals. That is, they are pharmerging. And in order for the supply chain to be safe, reliable, and transparent in those countries, their carriers, airports, handlers, and truckers, as well as their regulatory agencies, must buy in to the CEIV concept in the same way players in the developed world have.

It is IATA’s job to convince them that buying in is both possible and worthwhile for them – surely not an easy task. Is IATA up to the challenge? That remains to be seen, but in answer to Marcel Fujike’s question,  “are you really willing?” at the Lisbon conference in 2013, IATA has clearly answered “Yes.”

Find opportunities in the Asia-Pacific region, the world’s most dynamic air cargo market, at Cargo Facts Asia, April 21-22 in Hong Kong. Get more information here.

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