Time & Temperature Logistics for Healthcare Products

Transcription

1 Time & Temperature Logistics for Healthcare Products Reality Check - A Non-Traditional Approach 2010 CNS Partnership Conference May 4, 2010 Christofer Matney Air Service Director Indianapolis International Airport

2 Reality Check - A Non-Traditional Approach AGENDA Defining a non-traditional gateway airport for temp controlled air cargo Comparing operational environment vs. traditional air cargo gateway airports Going beyond $/kg to understand benefits for temp controlled air cargo Case example Further support of temp controlled supply chain: logistics infrastructure & outreach

3 Reality Check - A Non-Traditional Approach IND 8 th largest US cargo airport 2 parallel runways & 1 crosswind 5L/23R = 11,200 ft 5R/23L = 10,000 ft 14/32 = 7,280 ft ILS & CAT III operational capability IND handles 1 million tons annually FedEx s 2 nd largest hub Many other comparable airports: SDF, BNA, STL, HSV, etc.

4 Reality Check - A Non-Traditional Approach Got lots of these Which is good

5 Reality Check - A Non-Traditional Approach Not enough of these Too many of these Not as many flight destinations/frequencies and airline options (both passenger and all-cargo) compared to traditional hub airports

6 Reality Check - A Non-Traditional Approach Non-traditional gateway airports aren t replacements for traditional cargo airports Manufacturers/Shippers need airline network access to reach many markets More flight frequencies & more destinations give better flexibility/responsiveness BUT expected air cargo activities can be scheduled to more reliable environments Significant upstream manufacturing API product movements New product launch and product moves to large distributors Large volume or sensitive imports, bypassing potential Customs/FDA delays

7 Reality Check - A Non-Traditional Approach A non-traditional cargo airport, like IND, can: Lower airline operating costs Provide open airspace and open runways Offer an uncongested environment for ground handling Find efficiencies to strengthen the airline s supply chain link

8 Reality Check - A Non-Traditional Approach With quick turnarounds on all-cargo operations, landing fees have significant impact $6.40 $6.75 $6.77 $4.70 Landing fee per 1,000 lbs $1.07 $1.94 $1.95 ATL MIA IND DFW JFK EWR ORD

9 More Flight Options = More Congestion 900, ,000 Only 2.4% of Chicago O Hare (ORD) flights are cargo aircraft While 54.8% of flights at Indianapolis (IND) are cargo aircraft Annual Airport Operations , , , , , , ,000 0 IND ATL ORD DFW JFK EWR MIA Source: US Department of Transportation Bureau of Transportation Statistics

10 More Congestion = More Delays Majority of IND delays due to late arrival or FAA clearance to major hubs 30.05% Airport Percentage Delayed Flights % 23.11% 25.54% 25.97% 26.06% 27.79% IND ORD DFW JFK ATL MIA EWR Source: US Department of Transportation Bureau of Transportation Statistics

11 Reality Check - A Non-Traditional Approach Delays that are both frequent and lengthened Airport Average Delay Minutes IND JFK ATL DFW ORD MIA EWR

12 Reality Check - A Non-Traditional Approach Increasing aircraft operating costs with long taxi times Average Taxi-Out Time Minutes IND DFW MIA ATL EWR ORD JFK

13 What airport type suits cold chain air cargo best? TOO HOT! TOO COLD! Climate isn t the main concern. It s the exposure!

14 Non-Traditional Gateway Going Beyond $/kg 60% of air cargo travel time is spent at the airport¹ ~54% of healthcare freight temperature excursions occur while in possession of the airlines (product spends only 40% of its time inside the aircraft)¹ Countless hours & resources have been invested, and many new innovations have been developed, to overcome the inability to control operations and avoid excessive temperature exposure of product at cargo airports. Economic impact by reducing temperature related damage 50% in next 3-5 years?²: $ Billion in annual product loss $250 Billion in temperature sensitive product sales 1 Kevin O Donnell, ThermoSafe Brands, 2010 IATA World Cargo Symposium 2 David Bang, LifeConEx, 2010 IATA World Cargo Symposium

15 Non-Traditional Gateway Going Beyond $/kg Who Dropped The Ball?: Airline Ground Handler Customs Freight Forwarder Or did the airport environment, with congested operations and constrained resources, limit those supply chain links from appropriately handling the specialized needs of temperature controlled air cargo, creating frequently repeatable problems such as excessive tarmac exposure.

16 Example: Non-Traditional Cargo Airport

17 Example: Non-Traditional Cargo Airport Trucking CBP Freight Consolidators Freight Forwarders IND Cargo Customs Brokers Ground Handlers All-Cargo Carriers An airport s success depends on its ability to collaborate with all its partners to implement an environment that will allow temperature controlled air cargo operations to succeed. TSA US DOT FDA USDA End Users DB Schenker, Cargolux, and manufacturer approach IND to support international air cargo direct flight (Feb06)

18 Example: Non-Traditional Cargo Airport Temperature Controlled FTZ Warehouse

19 Example: Non-Traditional Cargo Airport Product remains inside temperature controlled facility until plane s arrival confirmed IND staged freight minimal exposure O Hare -???

20 Example: Non-Traditional Cargo Airport Normal Inbound Transportation Process to IND European Production Site European Hub Airport Chicago Airport Chicago Trucking Depot Hub IND FF Destination Facility New FTZ, Direct Flight Inbound Transportation Process European Production site European Hub Airport IND - FTZ Airport Destination Facility

21 Example: Non-Traditional Cargo Airport Were shipping costs ($/kg) higher at IND vs. traditional cargo gateway? YES What supply chain benefits were realized using non-traditional cargo gateway: Providing an excursion free environment since cargo flights began (Feb06) Reducing product touches during transport from 14 down to 7 Consistent ground handling workforce to retain SOP training/expertise Manageable Customs staff to develop ongoing/reliable relationship Airside warehouse s FTZ status allows immediate breakdown inspection upon arrival International delivery times shortened hours Non-traditional gateway airport benefits not reflected in $/kg transportation costs.

22 Example: Non-Traditional Cargo Airport Location is an important consideration, to support distribution to/from the airport

23 Example: Non-Traditional Cargo Airport Most US gateway airports are constrained by increasingly congested metropolitan highway systems. IND A non-traditional gateway airport with an interconnected highway system can circumvent supply chain inefficiency due to congestion. Source: Cambridge Systematic Inc An Initial Assessment of Freight Bottlenecks on Highways for FHWA October 2005

24 More Traffic Congestion Adds More Fuel Costs To Air Cargo 1,200,000 Average Daily Fuel Gallons Wasted By Congestion 1,000, , , , ,000 0 IND ATL ORD DFW LAX IAH BOS JFK SFO Source: Cambridge Systematic, Inc., An Initial Assessment of Freight Bottlenecks on Highways, for FHWA, October 2005

25 Supporting GDP Is Airport s Focus The airport is an active participant with IATA s Air Cargo Time & Temperature Task Force and an advocate of the recently released Chapter 17 Perishable Cargo Regulations. The airport with actively promote/support its local air cargo supply chain partners to participate in upcoming training/accreditation programs.

26 THANK YOU!