December 26, 2018

Three air cargo trends to watch in 2019

Three air cargo trends to watch in 2019

Blockchain technology, artificial intelligence, and a host of market forces are shaping the transport of pharmaceuticals, industry executive says.

By DC Velocity Staff

As 2018 winds down, shippers in the pharmaceuticals market should take note of three air cargo trends shaping the industry in the year ahead, according to Dominic Hyde, vice president of Credo on Demand, a service of temperature-controlled packaging solutions provider Pelican BioThermal.

Hyde offered the following insights in a year-end summary of key issues and trends to watch in 2019:

Blockchain technology

Identifying the source of product damage after a shipper has arrived at the end user's facility is a next to impossible task, according to Hyde. Not only can the source of the damage come from nearly any leg of the journey, he says, but the culprit is unlikely to volunteer themselves to pay for damages to a payload that, in the case of biologics, can be worth well over seven figures. Paper-based manifests, chain of custody and damage records can be fabricated and liability obfuscated, he adds.

Blockchain technology may be the answer to the problem. As Hyde explains, blockchain creates a permanent and incorruptible record that tracks physical movement of a shipment and can aid the investigation into who is to blame for damages incurred along the way. Through serialization, blockchain can identify when a major 3PL contracts with a local, third-party trucking company, for instance, and damage to a carton is incurred. While there are a number of blockchain variations, the Blockchain in Transport Alliance is pushing for a standardized implementation in the logistics industry. Large industry partners such as UPS, FedEx, DHL and Union Pacific have signed on to the BTA, making the future of blockchain in air freight a near certainty, he says.

"Within the decade, I expect that blockchain will expand beyond tracking between the shipper and receiver and encompass the entire pharmaceutical supply chain," Hyde says. "Blockchain technology allows for increased data and visibility—from the ingredient suppliers to end-user patients and [every] stage in between—using a permanent, decentralized and public digital record."

Artificial intelligence

Hyde says artificial intelligence (AI) and predictive software have "huge implications for the shipping industry." Algorithms that can account for weather forecasts, flight times, gulf streams and even expected wait times and holdovers at customs and border protection facilities, are all factors affecting arrival times for packages.

"Datasets from pharmaceutical distribution are large, making the application of AI ideal for the industry. Using this data, AI has the potential to identify new and ongoing issues, empowering positive interventions to preserve shipments," he says. "This level of data has the potential to allow third-party logistics providers to provide pharmaceutical manufacturers and other stakeholders a new level of customer service; early adoption of AI will be a key differentiator for shippers in the next three to five years."

Cost-effective alternatives for less critical return trips ?

Pilot shortages and an increase in commercial shipping have led to a 6 percent undersupply in available air freight over the last two years, Hyde says. The situation has created long lines for a dwindling resource and increased air freight prices to accommodate for supply and demand.?? He says 3PLs and others will seek cost-effective alternatives, such as sea freight, as they look to rebalance shipping containers in this new climate. Pelican BioThermal is using sea freight for the return of containers after payloads have reached their destination, he says, allowing the company to "sidestep the laws of supply and demand in air cargo and pass those savings on to our customers."  

"With a large portion of pharmaceuticals shipped via air freight, even the most innocuous trends in air cargo can have a significant impact on the pharmaceutical cold chain," Hyde adds. "As a result, staying ahead of the latest trends impacting air cargo is a business imperative for those looking to safely and efficiently ship these types of payloads."

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