BACKGROUND

Poseidon has been conceived to address long-standing quality, safety and service is - sues associated with the long-haul transportation of pharmaceutical products. It sets out to challenge some of the ingrained beliefs and out-moded practices that plague the current pharma-freight paradigm. Pharmaceutical shippers form the backbone to the Poseidon program and are act - ively involved in program design and development. Through a smart consolidation of all the different freight players and elements, the program is being devised as a risk- managed, fully GDP compliant, comprehensively-insured freight platform for pharma.

WHY PHARMA COLD-CHAIN REFORM IS NEEDED

Most of the pharma that is currently going by sea is of the very low-value bulk variety that has always travelled this way. The reality is that Pharma's current spend on sea freight is less than 12% of what it is spending on air freight. This, and many other statistics, suggest that the scope for cost savings through converting more sea freight to air freight remains positively huge. One of the reasons why there has not been even more transition from air to sea is not just down to the low-value of the products but also to the relatively low-volumes involved compared to perishables and other comparable reefer traffic (pharma constitutes just 0.1% of line revenues). This means that pharma can be of m,arginal interest to many big transporters and 3PLs, and this, in turn, translates into a continuation of fragmented services, limited investments in infrastructure and a sub-optimal quality of service. However, by consolidating multiple shipper volumes on the primary sea lanes and by introducing LCL on the secondary lanes, there is ample scope to generate meaningful levels of profitable business for those manufacturers that are prepared to work in harmony. Such a 'horizontal-collaboration' approach makes huge sense because it provides manufacturers with access to: • Lower shipping rates through standardisation and aggregated buying muscle (using a neutral trustee such as Poseidon). • Much higher safety and quality through standardisation, better controls, more stable freight conditions and network knowledge sharing. (Pharma air freight has a quality-performance record that would not be tolerated for a nano-second in other industries). • A fast-fix solution to the pressing imperative for shippers to be much more carbon-efficient (air freight emits 50 times more greenhouse gases on a tonne/km basis). Although certain short-shelf-life pharma products will undoubtedly always require air-freight, the typical high-value pharma product, from frozen to CRT, can easily be transported by refrigerated reefer; a mode that is considerably safer, cheaper and more sustainable than any other. All that is needed is an integrated approach, better planning, and an open mind.
ABOUT US
INTEGRATED PHARMA OCEAN FREIGHT PROGRAM

HISTORY

Poseidon came about from a small meeting of like-minded individuals at the European Temperature Controlled Logistics Conference at London in January 2017. There was consensus that for any degree of wholesale, across-the-board improvement in the pharma-cold chain there would need to be a more intimately-alignment of the supply-chain stakeholders (one of the problems with pharma transportation is the sheer number of hand-offs involved. Later that year a number of pharmaceutical companies were invited to Deloitte ‘Breaking Barriers’ events in Basel and Antwerp. On both of these occasions the audience was petitioned to collaborate in the creation of a new genre of pharma coldchain; one that engages all key supply-chain actors up-front, is predicated around structured collaborative working and is driven by the pharma shippers themselves. The reaction was very positive and resulted in the Poseidon integrated pharma ocean freight program being officially launched in February at the 2018 European Temperature Controlled Logistics Conference.
Reducing Waste When it comes to the pharma-logistics pro - cess, accurate figures of product loss and wastage at an industry- wide level are hard to come by. However, according to a recent estimate the pharma business “loses upwards of $35bn per annum” solely as a result of temperature ex - cursions and "30% of scrapped pharmaceutical can be attributed to logistics issues alone". Other sources conclude that around 4% of pharmaceut - icals do not arrive at their destination in usable condition due to temperature deviations. Whatever the exact figure these are huge losses. For any high-tech business sector these write-offs would be unacceptable but for the quality-con - scious and safety-driven pharma sector they are nothing short of disastrous. And its a that is likely tol escalate as the trend towards ‘large molecule’, biologic medicines gains momentum .
Fit-for-purpose? There is growing doubt amongst pharma sup - ply-chain professionals that the conventional competitive tendering (RFQ) model for logist - ics procurement is fit-for-purpose in the modern age. It has long been recognised in other quality- dependent business sectors that lowest bid pro - curement rarely delivers optimum value. To rely on competitive tendering will almost al - ways incur hidden costs down the line by which time it can be difficult or impossible to remedy. Supplier corner-cutting, neglect of training and an inability to invest in R&D are just some of the downstream costs. (The recent KFC/DHL debacle in the UK is testimony to what can happen if the ramifications of cost-cutting are not properly ascertained).
Sustainability The environment is not “some-one else’s prob - lem” or a “government problem”. It’s every - one’s problem and one that is ramping up fast for future generations. This makes it a moral im - perative for all pharmaceutical manufacturers to minimise their carbon footprint wherever pos - sible. One almost immediate way for pharmaceutical manufacturers to substantially reduce their envir - onmental footprint is to switch, wherever pos - sible, from air-freight to less eco-damaging modes of transport. It is a distrurbing fact that much pharma product is unneccesarily distrib - uted by air freight despite the fact that the air mode contributes in excess of 50 times more greenhouse gases on a tonne/km basis than ocean freight.
THE PRESSURE IS ON… The pharmaceutical logistics field is facing a number of interconnected dilemmas: Quality issues associated with the transportation of pharmaceuticals and medical biologics. Regulatory oversight is already very high and this intervention will GROW if distribution quality does not improve. The pharma industry is under cost pressures unlike anything it has experienced in the past. Pharmacos need to reduce their carbon foot print. (Per tonne/km ocean freight produces a fraction of the CO2 produced by airfreight. Although there are some scattered pockets of excellence, pharma-logistics is a field that is generally defined by poor performance, infighting, cross-functional silos, inefficiency and a serious absence of value-add. The Poseidon program is a good fit for any company that is serious about breaking the mould and taking a different approach.
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