Following the Pack: Reassessing often-overlooked cool-chain packaging

Getting creative

The dollar signs associated with cold-chain cargo certainly motivate innovation, but are not the only driver. In the early 2000s, governments began to impose stricter regulations on the industry, holding shippers of the perishable commodities, especially pharmaceuticals, to a significantly higher standard than the days of simply packing products on ice and, essentially, hoping for the best.

Those regulations have made logistics operations safer, but more complex. There are now greater obstacles for shippers to contend with and, in turn, higher associative costs.

“If you looked at the way drugs were being shipped 15 years ago, it’s improved so much,” said Christopher Day, director of business development, global leasing services at packaging company ThermoSafe. The company supplies both active and passive products, but specializes in the passive realm.

“The regulations have caught up and are pushing people to use higher levels of thermal protection. Yes, that drives up cost, but it protects patients, so at least you can look people in the eye and say, ‘Yes, your product is going to be kept at temperature throughout the supply chain.’”

When regulations for the shipment of pharmaceuticals began to tighten in the early 2000s, cool-chain packaging companies like ThermoSafe and Peli BioThermal began to evolve in order to shape their products to accommodate the new regulations.

That’s when “active” packaging solutions began to emerge as an alternative to traditional “passive” packaging solutions. Passive packaging refers to containers that simply use materials such as ice or dry ice and insulation to keep cargo cold – think of the cooler chests used to carry drinks at the beach – while active solutions use mechanical or electric systems, like a refrigerator, which can keep products cold for much longer.

“The biggest advantage of electric [or] active solutions is probably the unlimited runtime,” said Andreas Seitz, managing director at DoKaSch Temperature Solutions. “It only needs to be electrically recharged periodically. We see it as a little ‘flying warehouse,’ working safe in any climate without complex and error-prone preconditioning of passive cool packs.”

ThermoSafe’s PharmaPort is another strong example of what modern active containers are capable of. The product offers precise temperature control in the -40°C to 60°C range and a rechargeable battery that lasts 72 hours. Plus, it can be plugged in to function like a refrigerator. Each container is enabled with data-collecting hardware for track-and-trace software access.

Active solutions like the PharmaPort are ideal, but are, predictably, much more expensive than their passive counterparts. Dominic Hyde, vice president at Peli BioThermal explained that they are not always the best option when considering cost. So, when companies are able to meet the needs of their cargo by using old-school passive containers, they are the first option used.

If you were to look into the cargo holds of Southwest Airlines’ aircraft, you’d see mostly passive containers, because Southwest’s network is limited to the U.S., with a couple of Central American and Caribbean destinations, meaning the routes are short enough that customers don’t necessarily need to pony up for active containers.

For long-haul shipments, though, the higher-tech alternatives are often worth the investment, because of their superior ability to safeguard against improper infrastructure, unexpected weather, or unforeseen supply-chain disruptions.

Due to the regulation-heavy environment that cold-chain shippers operate within, keeping costs manageable is a high priority for shippers. And packaging companies have gotten creative in their efforts to accommodate clients’ diverse needs. ThermoSafe’s product portfolio, for instance, is centered around balancing technological capability and price, which are directly correlated.

In working to meet these regulations, it is becoming standard for packaging suppliers to offer a menu of passive and active containers that are tailored specifically to each shipper’s needs. The rationale behind having a wide range of options – from rentable, to reusable, to disposable – is the ability to accommodate different needs and different budgets, which depend on a product’s perishability and the trade lane in which it travels.

Peli BioThermal is one such example. “As a supplier, we had to do a lot of work to understand their requirements and adjust our offering to suit their needs,” Hyde said. One of its more unique offerings, Credo On Demand, is a pay-per-use model that resembles digital-era share-oriented services like Airbnb and Car2go, which allow users to save money by renting products or services that pose significant expense to purchase outright.

The program allows shippers to save by renting containers for use along their particular trade lane. Hyde gave the example of Frankfurt to Tokyo – which, he said, would cost around $1,000, depending on the volume of the shipment – allowing customers to simply leave the container at the company’s regional facility in Tokyo, where the container will be re-used for another customer’s shipment out of that origin.

In addition to rentals, ThermoSafe also offers a pay-per-use model, too – a currently small but rapidly growing segment within their product and service portfolio, Day said.

“Pharma companies like the sound of leasing and rental because their cost-per-use goes down,” he said, pointing out the one weak spot in the model. “The challenge and the reason why it’s not more widely adopted, is that, when you get down into the details of it, you have to have a footprint that is global in nature in order to move things around cost-effectively, and that takes significant time and money.”

As companies build their networks, the strength of the packaging rental model will continue to gain traction, and potentially become a more widely used option.