From Supply Chains to Supply Networks: Poseidon Aims to Redefine Pharma Cold-Chain Logistics

Alan Kennedy, executive director of TEAM UP, shared perspectives on Poseidon and ocean transport.

BioPharm: Why was Poseidon established and what do you hope to achieve with the program?

Kennedy: Like-minded individuals at the 2017 European Temperature Controlled Logistics Conference agreed that, in order for any degree of wholesale, across-the-board improvement in the pharma-cold chain, there would need to [be] more alignment between supply-chain stakeholders. Poseidon’s model is built around some of the principles of supply-chain collaboration and integration that are being successfully applied in other industries. Instead of a supply chain, Poseidon is a supply network that involves all of the stakeholders that are responsible for transporting pharmaceutical products. Currently, 19 companies are involved in the Poseidon project, including eight pharmaceutical manufacturers.

Driven by pharmaceutical companies, the program is designed so that each pharma firm and its shippers, logistics companies, and suppliers sit around the same table as equal partners. A network partner agreement governs the relationships between all these parties, and they work together as a single team with common goals, rules, and performance incentives.

Poseidon is putting together an end-to-end integrated network for pharma logistics. We hope that the model will serve as a template for pharmaceutical companies in their quest for more efficient, more competitive, and more concerted supply chains that are fit for purpose in today’s rapidly changing environment.

Leveraging improved technology

BioPharm: How are you connecting the many stakeholders who would be involved in ocean transport? 

Kennedy: A cloud-based Poseidon Collaboration Hub enables members to communicate in real time or whenever needed. Stakeholders around the world facilitate network communications, exchange ideas, disseminate news, share information, access up-to-date documentation, and manage projects. The Hub is also used for non-transactional network communications, for meetings, and to store documentation.

BioPharm: What types of technology (e.g., temperature and condition monitoring) are being refined for ocean transport, and how would they differ from solutions that were developed for air transport?

Kennedy: The challenges of sea freight broadly mirror those of air, although some of the protection and monitoring equipment had to be adapted to the different time parameters and operating conditions. For example, one of our participants, DuPont, is currently exploring new cargo-cover materials for ocean freight use.

One of the advantages of sea freight is that it offers better shipment visibility so that shippers can monitor the geographical position and physical condition of freight in real-time. At this point, Poseidon is only using Maersk ‘smart’ reefers and US-built Klinge ‘redundancy’ reefers.

For air freight, the US Federal Communications Commission requires transmitting devices such as data-loggers to be auto-switched off during flight for safety reasons. Although the loggers continue to capture data during the flight, this information can only be retrieved later. As a result, there is reduced opportunity to receive alerts or to intervene quickly, to fix a problem that has been reported while it is happening, such as an unexpected temperature excursion that might compromise product quality.

BioPharm: Are insurance costs more of an issue for sea than air freight?

Kennedy: Ocean transport insurance can sometimes be perceived as a black hole by shippers, who are often more comfortable with the comprehensible and comprehensive insurance provisions associated with air freight.  Shipping lines, for instance, tend to apply inconsistent liability limits, which, in any case, are invariably much lower than the typical value of a full container consignment of pharma products.  It’s a problem that currently prevents many otherwise suitable products from being shipped by water.

Poseidon is actively addressing this issue and has brought the insurance industry into negotiations from the project’s start. As a result, Poseidon can now offer a wide-ranging insurance framework specially devised to provide satisfactory cover for all pharma shipment risks and values. Poseidon insurance will provide significantly improved coverage while demystifying the marine protection process.

BioPharm: Have there been any regulatory changes regarding ocean shipment or position pronouncements by the World Health Organization (WHO) or other global authorities on ocean transport of pharmaceuticals?

Kennedy: GDP legislation is indiscriminate, non-prescriptive and applies universally to all transport modes. So, the same standards must be met by all (The IATA CEIV program is a translation of these regulations to make them more air-freight-friendly).

Although a high proportion of vaccines are currently transported by sea, the use of ocean freight has not yet been officially endorsed by WHO due to concerns surrounding the perceived implications of a ‘total’ loss situation (i.e., where a huge volume of urgent vaccines or drugs might be lost in a single event). WHO is expected to review this position, however.

BioPharm: Have there been any detailed risk benefit analyses of ocean transport performed recently?

Kennedy: Different pharmaceutical companies have launched proprietary pilot studies to ascertain savings and quantify results. 

However, Poseidon is working with several pharma manufacturers to design and implement the largest ocean freight transport validation exercise to date. This study will involve multi-container intercontinental shipments of different pharmaceutical dosage forms (oral solid dosage forms, vial parenterals, and topical creams), which will be rigorously monitored and documented. This exercise will be completed by June 2018.

BioPharm: Are there types of pharma companies that tend to rely more on ocean transportation?  What interest are you seeing in the industry?

Kennedy: For the first time, the 2017 IQPC Temperature Controlled Logistics conference in London included a Sea Freight Focus Day. This event was sold out, and 70% of those attending worked at pharmaceutical manufacturers, almost all seeking to enter sea freight or to upgrade their sea freight usage.Most of Big Pharma is already shipping some of its products by sea. However, these companies typically deal in huge volumes that lend themselves well to full container load (FCL) shipments. 

Small- and mid-sized pharma companies, which contribute half the industry’s output, do not currently have access to a GDP-compliant less than container load (LCL) service, also known as ‘groupage’ or shared container service. Therefore, they are forced to send materials by air. We expect this restriction to be lifted once Poseidon introduces its GDP-compliant LCL service later this year.

Article Details

BioPharm International
Vol. 31, No. 3
March 2018
Page: 46

Citation

When referring to this article, please cite it as A. Shanley, "From Supply Chains to Supply Networks: Poseidon Aims to Redefine Pharma Cold-Chain Logistics," BioPharm International 31 (3) 2018.