I am a big fan of the air cargo industry. I spent many years at Cathay Pacific, where cargo plays a hugely important role. I have retained a keen eye on the cargo industry in my time at IATA. And I am very pleased to be here in Brussels today to mark the opening of the first Center of Excellence for Independent Validators (CEIV) Pharma community in Europe. There is a very simple reason behind the development of the CEIV Pharma. Cold chain transportation, particularly of pharmaceutical products, is a growing business opportunity for air cargo. But this sector is facing increasing regulatory burdens which are adding cost and complexity. The CEIV Pharma offers a solution to this issue.
Air cargo is one of the great unsung forces of the global economy. Each year, the industry carries 50 million tonnes of cargo worth $6.8 trillion. That’s equal to around one-third of the value of all traded goods. Without the speed and efficiency of air cargo, global supply chains would seize up, perishable goods wouldn’t be able to reach distant markets, and vital medication or emergency aid would not make it to the most vulnerable.
The pharmaceutical sector transports goods which are highly temperature-sensitive and a single mistake can destroy an entire batch. Mishandling is rare, but it is an unfortunate fact that more than 50% of all temperature excursions occur while the package is in the hands of airlines and airports. It is therefore essential to establish harmonized handling procedures and strong accountability and cooperation between all the partners in the cold chain.
The expansion in both usage and production of biotechnology-derived drugs and other cold-chain products in emerging markets has drawn increased regulatory interest in recent years. Both governments and industry have put forward practical guidance for qualifying cold-chain transportation processes, sensors and packaging in much the same way as manufacturing processes are qualified as part of Good Manufacturing Practices.
IATA is very active in this area. Many of the standards that already govern the way the industry handles time- and temperature-sensitive products have been created by IATA with the help of our industry partners. The work of the Live Animals and Perishables Board, the development of the Dangerous Goods Regulations, and the Temperature Control Regulations are just some examples. In 2012 the Time and Temperature Task Force created a Time and Temperature label which is now standard across the industry, helping ensure that the temperature range for sensitive products is known and followed. This has already gone a long way towards eliminating errors in transit.
A growing number of countries are issuing their own regulations and guidance. New EU guidelines came into effect a year ago, and in the last few years Australia, Canada, China, Indonesia, Ireland, Malaysia, Saudi Arabia and United States have all updated cold chain rules.
While the industry welcomes the focus on higher standards, the increasing number of regulations around the world is becoming a problem to manage. Implementation and compliance is complex and airlines, GHAs and forwarders are subjected to multiple audits for handling and transportation. Crucially, there is no global certification for the handling and transportation of pharmaceutical products.
Our customers are demanding a better service. Shippers want to see compliance, standardization, accountability and transparency across the supply chain. They want the confidence that facilities are adequately equipped and operated by properly-trained people familiar with the latest regulations, standards and best practices. They want global certification, and a common audit format to maximize efficiency. Finally, they want to easily identify the stakeholders that meet all these requirements.
The CEIV Pharma offers all this and more.
In concept it is similar to our highly successful CEIV Cargo Security, which helped prepare the industry to meet the European ACC3 regulation on secure cargo shipments. A group of independent validators were trained by IATA on an approved course. This gave the air cargo industry as well as the regulators confidence in the quality and consistency of the validations being carried out. Now we are applying the same principles to the cool chain. By validating the quality of the chain from end-to-end, pharmaceutical companies can be confident that their goods will be handled correctly.
The CEIV Pharma is a standardized global certification program that trains and conducts consistent onsite assessments to provide the expertise needed adequately to transport cold chain pharmaceutical products across the world. In partnership with industry stakeholders, IATA has designed a program that:
- Has one internationally recognized standard that harmonizes, simplifies and, where possible, reduces the number of audits;
- Improves compliance with standards and regulations by assessing operations against a standard check list;
- Trains independent validators on these standards and regulations for them to work consistently, and
- Identifies and recognizes the best suppliers by certifying and then registering them on a public website.
Our aim is to improve the quality of the service offered to pharmaceutical companies by reducing the losses from mishandled goods. At present annual damages to the pharma industry from spoiled goods can be up to $12 billion a year. That is an unacceptably high percentage of a $300 billion-a-year market.
Moreover, in the coming years much of the growth in temperature-sensitive pharma such as vaccines and blood plasma is expected to be in markets outside North America and Europe. This in turn creates a need for investment in up-to-date cold chain facilities. By 2018 spending on cold chain logistics is likely to be over $10 billion a year. The value of this precious investment must be maximized.
Over the past decade, the shipping of pharmaceutical products has developed to become the fastest growing market segment in the air freight industry. Air carriers, handlers and freight forwarders have responded with branded products and services to grab a share of this lucrative niche market. There is tremendous momentum behind this segment of the industry, and I am sure that is why the response to the development of the CEIV Pharma has been so strong.
So that brings us to today. We are here because Brussels Airport has taken the initiative to invite a group of eleven local stakeholders to undergo the CEIV Pharma training. This will bring the entire local cargo community together for the common goal of becoming certified. Only after successfully undergoing a rigorous training and assessment against national and international standards, in particular IATA’s Temperature Control Regulations, as well as best practices, will we certify these eleven companies . But once officially recognized, these Brussels-based stakeholders will be able to offer pharmaceutical companies the competitive advantage of assuring cold chain integrity to their clients. And they will be the first in Europe to achieve this.
In exchange, I have a request to make of you all. The more stakeholders participate in the CEIV Pharma, the stronger and more effective it will be. I therefore call on you all to promote the CEIV and engage with your business partners wherever you operate in the world. Ultimately we all want to see a network of CEIV trade lanes with participants certified at origin, destination and in transit.
I know that Brussels Airport intend to take a leading role in this promotion – I hope all of you will join us.
I congratulate Brussels Airport and all the stakeholders in Europe’s first CEIV Pharma. I trust that your success will lead to a stronger, more competitive and enhanced air cargo service for this vital sector of the global economy, and our modern way of life.
1.List of companies being certified:
World Flight Services
Jan de Rijk