The Successful Use Of Sea Freight For Pharmaceutical Shipments
In my earlier article, I outlined the work of the IQPC Pharma Sea Freight Working Group which was set up to “bring together the key stakeholders to drive unification and best practice in temperature controlled oceanfreight for pharmaceuticals”.
One statement in that article read “some companies were excelling using this mode” and this article sets out to give insight into how you might also excel at using sea freight as a viable way of transporting pharmaceuticals.
Sea freight is normally used for inter-continental movements and primarily consists of hub and spoke systems through “feeder” and “mother” vessels. Sea freight is much cheaper than air freight but transit times are significantly slower. It is also normally used when enhanced security is required as there are fewer parties involved (in comparison to air freight), and containers can be loaded and “sealed” at your own site. This means that the container is locked and a tamper evident, uniquely numbered seal is added; you then have evidence that the container has stayed locked and sealed through to unloading destination. Additionally, you receive a negotiable document (guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document) thus making fraud more difficult.
The benefits of sea freight include much more than lower costs and better security when compared to air freight. The risk of product damage is significantly lower because your product is not physically touched by outside parties once the container is sealed. Assuming you have loaded the container in the correct way, there is minimal risk from the rigours of the voyage. There is also a lower risk of temperature excursion when reefers (temperature-controlled containers) are used. This is primarily because they are sealed throughout the journey as well as powered and monitored for the majority of it. During air freight there can be multiple “hand offs” where your product is passed between different companies (the forwarder, the handling agent, the ramp agent, the airline, etc.) and there can also be regular trans-shipment activity, i.e. where a shipment changes from one service to another.
However, all is not perfect and there are some drawbacks of using sea freight. Containers are of variable quality and availability of good equipment can be poor in some regions. Transit times are slow which can increase inventory costs and introduce supply chain problems.
These drawbacks can be mitigated in various ways. Using containers less than 5 years old (as these have been shown to be more reliable), communication of requirements well in advance of shipment to ensure availability and working with your freight forwarder to find out which line offers the best service on each route.
Prior to loading it is normal to ensure that containers are pre-conditioned to your required temperature and checked for cleanliness, lack of odours etc. Most shipping lines will perform a pre-trip inspection (PTI) but these are not all done to the same standard. Therefore, you should make sure your PTI covers the operation of the container cooling units, confirmation of cleaning which has taken place and any other requirements you may have (for example ensuring that no incompatible products have been shipped in the same container).
Containers should be loaded and sealed at your temperature-controlled premises as this minimises the risk of interference or temperature excursion en route.
Sea freight is governed by very old rules and all parties with product on a ship are deemed to have an “interest” in the voyage. This means you could be proportionately responsible for serious incidents where a “general average” is declared – typically this could be a serious collision or pollution incident. Maritime law is a very specialised area and the law of general average would be the subject of a long series of articles in order to explain fully. However, in brief it is a legal principle of maritime law according to which all parties in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.
Therefore, always have marine cargo insurance for such eventualities. Additionally, ensure your policy covers temperature excursions as most do not. Ask your broker to investigate a “risk of loss” clause as shipping lines and freight forwarders have a very small, limited liability which is unlikely to cover the value of your products.
In summary, sea freight is in many respects no different to current supply chains and is an excellent solution in the right circumstances. Therefore, you need to have a full understanding of your current supply chain before making any changes. Finding the right consultant and freight forwarder are critical success factor since they will perform due diligence in advance of any changes then ensure correct liaison with shipping lines as well as provision of Customs and other documentation services.
Author: Mark Edwards, Chair of the Pharma Sea Freight Working Group and Managing Director of Modalis logistics consultancy