With the year nearing its close, we’re taking a moment to look back at 2015 and ahead to 2016 with Tom Grubb, American Airlines Manager Cold Chain Strategy.
      “The year 2015 has been a very busy year for all of the numerous activities related to our merger finalization as well as cold chain initiatives. 
      “A key innovation is our Philadelphia Pharma facility, which celebrated its grand opening earlier this year.  
      “It is a 25,000-square-foot, dedicated pharmaceutical and healthcare handing facility—the first of its kind for a passenger air carrier in the NE region of the United States.
      “AA Cargo Philadelphia features 9,000-square-feet of controlled storage, including 6,000-square-feet of Controlled Room Temperature (CRT) +15°C to +25°C, and 3,000-square-feet of Cold Storage (COL) +2°C to +8°C. 
      “There is an Active Container Management (ACM) area where we have capacity to simultaneously recharge up to 30 RKNs and the facility has full monitoring and emergency power backup generation capabilities.”

Key Corridor

     “Our facility is situated in the heart of a key U.S. pharmaceutical corridor, which serves customers from Pennsylvania to Maine and is an ideal hub for access to American’s network between Europe, North America, Latin America, and beyond. 
      “This NE corridor contains numerous research and development as well manufacturing facilities for many of the world’s top pharma companies. 
      “A healthcare logistics hub such as this gives customers unprecedented access to quality handling and transportation for their temperature-sensitive healthcare products.”
      American’s cargo customers include Teva Pharmaceutical Industries, Pfizer, Merck, Astra Zeneca, Novartis, Bayer, GlaxoSmithKline, and Ivax, American said.

Enhanced Network

     “As was the case with the PHL facility, we continue to evaluate network infrastructure and process enhancements in order to keep ExpediteTC° the premier solution for temperature-controlled shipping of delicate pharmaceutical and healthcare products.
      “We continue to invest in our ExpediteTC° program as traffic in the last several years has grown significantly. 
      “Coupled with positive industry feedback on our infrastructure, equipment, and process enhancements, we see continuing demand for this key vertical. 
      “This sector will continue to become more and more important, particularly with the increased demand for advances in the temperature-controlled service offerings.
      “Advances are driven largely due to both increasing product complexities and more stringent regulatory requirements for the supply chain.”

First He Built It

     Tom Grubb has served as manager of cold chain strategy, leading the strategic oversight of American’s time- and temperature-sensitive cargo services since the post was created in 2011.
      A longtime veteran of American’s Cargo division, Mr. Grubb was pivotal in the development of American’s existing cold chain service, ExpediteTC°.
      One thing we liked immediately that brought Tom to our attention was a session he was involved in last year in Boston at the IQPC GDP and Temperature Management Logistics Global Forum.
      American’s session at that event focused on the relationship between the pharmaceutical manufacturer, the freight forwarder, and the air carrier, but the star was clearly the leadership, which put heads and hands together to work through the critical elements in the shipping process.

Thought Leaders

     The presentation was a best practices case study demonstrating how stakeholders should work together for success. Perspectives reflected in the session were presented by pharmaceuticals manufacturer Jim Bacon of Grifols Inc., freight forwarder Kris Hembree of Uti, and Tom Grubb.
      “Better solutions for proper management of cold chain are developed through proactive communication and information sharing,” the group concluded.
      “This includes thorough understanding of product requirements, identification and implementation of best practices, creation of detailed SOPs, and insuring each participant’s complete understanding of the process.
      “Process Development, each stakeholder, by bringing their unique perspectives to the table, jointly developed a solution which resulted in successful implementation and execution.”
      (More: https://www.aacargo.com/about/tradeshows/iqpc.html)

What Lies Ahead?

     “According to IATA, global pharmaceutical and healthcare logistics spend was approximately $8.5B in 2014—that number is expected to increase to $10.0B by 2018,” Tom Grubb said.
      “Increasing regulatory oversight and corresponding customer expectations are clearly resulting in the demand for enhanced control necessary for transportation of advanced biologics. 
      “These treatments include such products as vaccines, somatic cells, and gene therapies; the trend in handling of these delicate pharma products will continue to expand.
      “Earlier this year American Airlines Cargo announced it is the first U.S.-based passenger carrier to receive official approval to carry the full suite of Envirotainer products for customers.
      “The RKN e1 and the larger RAP e2 are active, temperature-controlled containers designed to provide the superior protection necessary for the safe global shipment transportation of highly-sensitive healthcare products destined for patients around the world.
      “Using compressor cooling and electric heating, the e1 and e2 containers are outstanding for shipments requiring added enhanced temperature control.
      “American began accepting shipments with these containers on November 1.”

Healthcare To The World

     “Coupled with the CSafe RKN as well as the numerous Passive options available to shippers, our ExpediteTC° program processes and infrastructure are designed with quality in mind for the safe movement of delicate pharmaceutical and healthcare products.
      “Combined with our new aircraft arriving every day, our capabilities continue to expand, providing added network opportunities to customers wanting to ship pharma anywhere within our global network.”

The Big Picture

“American remains dedicated to ensuring that our time and temperature-sensitive services meet customer expectations for both the manufacturer and logistics customers, but, most importantly, for the patient at the end of the supply chain.
      “Unlike other shipment types, pharmaceutical and healthcare customers rely most heavily on us to provide a consistent, transparent, and quality experience for each product they trust us to carry on our planes. 
      “It is very important to ensure open lines of communication between the shippers, forwarders, and airlines in order to ensure complete understanding and agreement on the roles and responsibilities of each partner. 
      “Expanding use of the collaborative approach assures transparency and open communication, and minimizes challenges which can affect quality in the temperature-controlled supply chain,” Tom Grubb said.
Geoffrey

     Susana Estrada does not mince her words.
     Straightforward and direct, Susana is the Director Cargo Systemwide for TAME, an airline with daily A330 flights from JFK to Quito, Ecuador, and A330 dailies from Ft. Lauderdale to Ecuador and beyond, interconnecting 800 flights to 32 destinations in South America.
     She says, “The driver in the creation of our airline was the need to connect the most remote regions of Ecuador, where communication channels were minimal or nonexistent.
     “Furthermore TAME also is the result of the need for an official Ecuadorian Airline and to achieve high standards of quality and services in the commercial aviation arena in South America, using the training skills of Air Force pilots..”

Enter Ortega

     “Colonel Luis A. Ortega wrote the first plan, including the organizational outline, operation costs, routes, and objectives to propose the creation of an Ecuadorian Air Force airline.
     “The Colonel’s proposal had the complete support of the Commanding General of the Ecuadorian Air Force, Colonel Guillermo Freile Posso, who gave the authorization to go ahead with the creation of TAME.
     “As Colonel Ortega told reporters:
     “‘Our goals have always been ambitious, we want to work with energy and dedication in order to place TAME as the most important airline in Ecuador.’”

The Road To Cargo

      Armed with the plan, financing, and airplanes, the new airline moved quickly to get into the air cargo business and went first class hiring Susana.
      Susana Estrada left her post at Swissport and moved in June 2015 to the top cargo spot at TAME.
      Prior to her stint at Swissport, Susana was a key executive at GSA Primeair, handling Centurion, Arrow Air, Atlas, and Polar.
      An alumnus of KLM/Martinair, Susana counts her experience in all facets of the industry—airline, ground handler, and GSA.
      “Susana brings professionalism and sense of the future to an exciting and very promising enterprise,” said my dearly beloved friend, Antonio Munoz, who now serves as TAME Cargo Administrator for Florida.
      “The best is yet to come,” Tony assures.
Geoffrey

     The Air Cargo Agents Association of India (ACAAI), the only national association representing the Air Cargo Industry in India, is holding its 42nd annual Convention in Ho Chi Minh City next week (December 16-19, 2015).
 
Just In Time

      The meeting comes at an appropriate time. While on one hand, air cargo growth remains stymied, putting stakeholders under immense pressure, on the other hand opportunities are opening up or are in the process of opening up with Prime Minister Narendra Modi’s ambitious ‘Make in India’ move.
      It is this move that ACAAI wants to get next to and expand; hence, the theme for the convention is:
      ‘Make in India - Local is now global.’
      The ‘Make in India’ initiative has the potential to transform Indian business and industry into global enterprises.
      For its part, the government of India is keen to ensure that the processes required to kick start this initiative are in place.
      To begin with, the challenges—and indeed, there are many, starting with a change in regulations and development of proper infrastructure to simplifying the rules for doing business—have to be overcome.

Challenges Noted

      ACAAI understands that to ensure the success of the ‘Make in India’ initiative, what is of utmost importance is a national logistics strategy that will help in the transformation of the country into a global manufacturing hub.
      As Hemant Bhatia, President, ACAAI, put it, “There are multiple challenges which have to be tackled on a war footing to expeditiously implement this program. The elimination of regulatory impediments; simplification of rules, regulations, and procedures; abolition of obsolete practices; and development of infrastructure are only a few of the changes which will be essential in this regard.”

Bhatia went on to point out that “at our convention, we shall be deliberating and evaluating how our industry can capitalize on this unique opportunity for growth.

Not All Business

      Needless to state, business must be complemented by pleasure.
      Accordingly, there will be adequate scope for fellowship, sightseeing, shopping, and other recreational activities for the participants and their spouses in Ho Chi Minh City.
      The convention will also provide ACAAI members to discuss trade opportunities with their Vietnamese counterparts.

High On Vietnam

      Sunil Arora, ACAAI’s Convention Chairman, said, “Vietnam is a growing economy. It has come up with sound infrastructure in such a short time. The rapid growth of Vietnam’s export-oriented manufacturing sector has boosted demand for logistics services. Hence, the destination will also complement the theme.”
      However, before the Prime Minister-backed initiative takes off in earnest, the air freight sector has to counter challenges at hand. These, of course, include the obvious infrastructure.
      Added to that are skill development, regulations, procedures, and mindsets.

Matter of Issues

      S. L. Sharma, Member, Board of Advisors, ACAAI and Immediate Past President of the Association said that the main issues that ACAAI members would like to have raised during the Convention were:

1. Simplification of Custom Rules & Procedures
2. Reduction in Dwell Time
3. Skill Development
4. Provision of World Class Standard Infrastructure
5. 24/7 Clearance
6. Setting up of Air Freight Stations

      ACAAI would like to know the latest status of these issues from the Ministry of Civil Aviation.
      Sharma went on to say that ACAAI supported the government’s keenness to establish Manufacturing Hubs and to set up Air Freight Stations under the ‘Make in India’ program.
      “Our government is very keen to make our industry attain high standards which will improve the growth of various products.  “There is also the need to transform the country into a global hub since efficient logistics do not just reduce transportation costs, but help in decreasing the overall production costs.
      “The modalities, processes, and evaluation of bringing improvement and growth in our industry that demand immediate attention will be deliberated and interacted during the convention,” said Sharma.
      Overall, he said, the steps towards ‘ease in doing business’ have to come in so that “we are able to compete in the global market.
      “Much needed are tax reforms and highway corridors that will reduce transaction costs.” ACAAI, Sharma insists, is also keen that the Ministries of Finance, Commerce and Civil Aviation should promptly take up the issues raised by ACAAI and ensure the implementation of their decisions within a timeframe.

The Foreign Legion of Aircraft

      With only foreign carriers operating cargo flights, air cargo stakeholders point out that India’s shippers have no other option, but depend on them.
      “That is why there are a large number of stakeholders who believe that domestic air cargo should be nurtured first,” was one comment.
      “There is, therefore, a demand that the development and enhancement of capacity of domestic air cargo be a focus area in the Civil Aviation Policy.”
      In fact, J. Krishnan, an air cargo veteran and former President of ACAAI had stated that the country should have a prominent flag carrier for this purpose.
      “Until India creates a sustainable and robust international logistics player, there will always be a threat to economic security.
      “With a national player, the country’s exports can move to CIF (Cost, Insurance, and Freight) terms and not the present FoB (Free on Board) term, which indirectly supports foreign interests.
      “China, for example, has its own strong shipping and airline network,” Krishnan said.

Shah Looking Ahead

      Samir J. Shah, Chairman, Federation of Freight Forwarders' Associations in lndia (FFFAI is the apex body and the sole representative of 27 Member Associations from all over India, representing 5,000 Customs Brokers), is looking forward to the convention and its outcome. He believes that “ACAAI has played a major role as one of the important associations in the Indian logistics fraternity for many years and air cargo holds the key to growth of an economy.”
      He pointed out to the ACAAI President that “your members service this mode of transport with finesse and professionalism” and FFFAI cherished its association with ACAAI and looked forward “to many interactions and joint action for the overall growth of the logistics industry in India.”
Tirthankar Ghosh